BTC

ETH

S&P 500 Futures

$21,109.00

$1,565.75

$4,011.00

(+0.61%)

 (+0.52%)

(-0.18%)

Note: All percentages shown above are referenced to the previous business work day's 09:00 (GMT+8)

GM Treehouser 🌳

Welcome to our Treehouse Daily newsletter (previously known as The Canopy Collective), where Treehouse brings you financial news and insights free daily! We believe you’ll find this helpful.

In case you have missed it, check out our latest insights piece 👇

Treehouse’s 2022 Wrap-Up and 2023 Outlook

Our Daily View

What We Are Covering Today

  • US out for MLK Day; Alibaba eyed by activist investor known for being part of Gamestop squeeze (more in Macro & TradFi)
  • Co-founders of 3AC and CoinFLEX hope to raise $25 million to launch a new exchange (more in DeFi & CeFi)
  • Bitcoin’s realized P&L ratio jumped convincingly above the psychological bear market level (more in On-Chain)
  • Term structures flattens across the curve, RV at 50s for BTC and the 60s for ETH. (more in Crypto Derivatives)
  • BTC and ETH bearish divergence form after big weekend wins for bulls (more in Crypto Technical Analysis)

Macro & TradFi

US markets were closed for MLK Day. Asian markets were mixed yesterday with HK broad-based / tech indices opening higher to trade lower for ~1%. European stocks wrapped up between flat to small up. Index futures are indicating a mixed open today in Asia. DXY was little changed while both oil indices sold off more than 1%. Activist investor Ryan Cohen, known for his contribution to the GameStop short squeeze, had taken stakes in Chinese e-commerce giant Alibaba in a push for increased share buybacks. The World Economic Forum kicks off today in Davos, with the majority of participants expecting a global recession in 2023.

DeFi & CeFi

  • 3AC and CoinFlex co-founders look to raise $25M for a new claims exchange
  • North Korea hacking group moved $63.5M (~41K ETH) over the weekend
  • Binance to allow institutional investors to post collateral off its exchange, assets to be stored in cold storage
  • Metaverse project Createra closes $10M Series A funding led by a16z
  • Monex Group conveys interest in buying FTX Japan
  • Shiba Inu announces Layer 2 network Shibarium Beta

Co-founders of 3AC and CoinFLEX hope to raise $25 million to launch a new exchange where users can trade their crypto, stocks and debt claims of bankrupt companies like FTX. The founders see this as an opportunity to unlock the $20B worth of crypto claims. This initiative received heavy backlash from the crypto community with the involvement of 3AC co-founders.

The North Korea hacking group, Lazarus Group, moved $63.5M (~41K ETH) which was part of the $100M exploited from the Harmony bridge hack last year. The funds were withdrawn through Tornado Cash then Railgun before being deposited into 3 crypto exchanges. Of the 3 crypto exchanges, Huobi managed to freeze the funds and account.

On-Chain

Moving to on-chain, Bitcoin’s realized profit/loss ratio (7d exponential MA) has jumped to levels last seen in April, indicating that there is a greater volume of profits realized on-chain than losses. A compelling break above 1 for Realized P/L Ratio is often observed near cycle turning points.

Despite the strong rally observed in the past week, Bitcoin price continue to trade underneath the long-term holder realized price of $22.4K. The last time Bitcoin broke through short-term holder realized price, the average realized price and long-term holder realized price was back in April 2019.

Crypto Derivatives

  • BTC and ETH funding rate remains positive
  • 30-day ATM IV fell for both BTC & ETH to 62.1% and 71.9% respectively
  • 30-day 25d callskew picked upfor both BTC & ETHto 2.7% and 3.03% respectively

For futures, total liquidations for the last 24hrs came in at $220.04M, with the majority coming from shorts at $117.82M.

On the options front, IV dipped on the front-end of the curve and jumped on the back-end of the curve as term structure flattens for both BTC and ETH. Term structures are no longer in steep backwardation and could potentially flip if traders continue to bid up long-term IV. RV continues to rise with BTC reaching 60 and ETH hitting 70. Variance risk premium has reached a low of 0.55% for BTC and 1.56% for ETH.

On the flow front, most of the volume comes from long-dated options. On the ETH side, the most popular strategy is the long risk reversal as traders look to hedge their short position against any unfavorable price movements.

Lastly, the VIX slightly rose to 19.49.

Crypto Technical Analysis

Looking at TA, BTC continued to grind higher after large successive moves up, however momentum has slowed as price action seems to be struggling to break higher. The RSI on the H4 has started to form lower highs revealing a bearish divergence. Given the large moves last week and waning momentum its possible to see a retracement to the $20K psychological level.

ETH has shown similar signs of waning momentum, as the RSI on the H4 dips back below 70 (the oversold signalled). Key price levels to watch in case of a retracement include $1,489, $1,421 and $1,346.

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Daily Readings

TradFi

Crypto

Yours sincerely,
Treehouse Research 🌳