🌳 Disney And Reliance Merge Media Operations In India; Uniswap Token Surges After Governance Proposal

GM Treehouser 🌳

Welcome to our Treehouse Daily newsletter, where Treehouse brings you financial news and insights free daily! We believe you’ll find this helpful.

Also, in case you have missed it, check out our latest research piece 👇

You can also access our research articles on the Bloomberg Terminal with the command “NH TRH < GO >"!

Our Daily View

What We Are Covering Today

• Disney, Reliance merge in India for media dominance; Malaysia seeks balance in US-China rivalry (More in Macro & TradFi)
• UNI reaches a new high following a governance proposal on fee switch; FTX sells its European division at a 90% discount (More in DeFi & CeFi)
• Fund recovery by ZachXBT; Glassnode analyzes Ethereum liquidity (More in On-Chain)
• BTC and ETH funding rate turns negative, BTC's ATM IVs increased across both the 7-day and 30-day timeframes (More in Crypto Derivatives)
• BTC continues to trade within a tight range while ETH breaks above the $3K key resistance (More in Crypto Technical Analysis)

Macro & TradFi

Disney and Reliance Industries Ltd. have finalized a binding agreement to merge their media operations in India, marking a significant move as Disney adjusts its strategy in the face of stiff competition in the densely populated nation. The merger will see Reliance's media unit, led by billionaire Mukesh Ambani, along with its affiliates, owning a majority stake of at least 61% in the new entity, while Disney will retain the remainder. The partnership with Reliance aims to create a dominant force in one of the world's rapidly expanding entertainment markets, leveraging both companies' strengths amid Disney's struggles to retain subscribers and Reliance's aggressive expansion in India's media landscape. The deal is expected to be publicly detailed soon, with both conglomerates aiming to enhance their footprint and influence in the Indian entertainment industry.

In other news, Malaysia's Prime Minister Anwar Ibrahim has criticized the West's growing fear of China, emphasizing the strategic and economic dilemma faced by Southeast Asian nations amid the US-China rivalry. In an interview, Anwar highlighted Malaysia's refusal to engage in conflicts with China, its largest trading partner, despite US criticisms. He stressed the importance of maintaining balanced relations and leveraging opportunities to bolster Malaysia's economy through strategic partnerships with both superpowers. Anwar's leadership focuses on revitalizing Malaysia's economy, with significant efforts to enhance the manufacturing, energy, and industrial sectors, including attracting record foreign investments from China and facilitating advancements in Malaysia's semiconductor industry. This approach aims to navigate geopolitical tensions pragmatically, prioritizing Malaysia's economic stability and growth.

Last Friday, the S&P 500 and Dow Jones Industrial Average reached all-time highs, with marginal increases of 0.03% and 0.16% respectively, while the Nasdaq experienced a slight decline of 0.28%. Market optimism was fueled by Nvidia's significant contribution to pushing Tokyo's benchmark index beyond its 1989 peak. This sentiment extended to Wall Street, culminating in the Dow surpassing the 39,000-point threshold for the first time. Additionally, indications from three Federal Reserve officials suggested potential rate cuts later in the year, contingent upon further inflation data, with one official emphasizing the need for "at least another couple more months of inflation data" before any decision on rate adjustments. Meanwhile, investors will look for the Core PCE data release on Thursday, 21:30 SGT. Singapore is set to announce its industrial production figures for January at 13:00 SGT today.

CeFi & DeFi

• UNI surges following the governance proposal on fee switch
• FTX sells its European division
• Craig Wright admits to editing Bitcoin White Paper
• Avalanche back up after failing to produce blocks for four hours
• Grayscale report shows that Ethereum price increase may be driven by anticipation of Dencun upgrade

Uniswap's governance token (UNI) experienced a remarkable surge, rising by up to 60%, reaching its highest level since April 2022, following a proposal aimed at overhauling the protocol's governance system by Uniswap Foundation's governance lead, Erin Koen. The proposal seeks to strengthen Uniswap's governance framework while rewarding UNI token holders who stake and delegate their tokens. This significant development marks a departure from previous initiatives and if approved in a community vote, would enable the collection of protocol fees and their distribution among UNI token holders who have actively participated in governance activities.

Meanwhile, bankrupt crypto exchange FTX has settled a dispute over its European division by selling FTX Europe back to its founders for $32.7 million, returning the company to its original owners. The sale comes after FTX attempted to recover funds spent on the acquisition, alleging that the purchase was financed with customer funds and was a "massive overpayment." The dispute, which involved counter-claims from the startup founders and a lawsuit from FTX, was finally resolved on Feb. 21. FTX Europe, acquired in 2021 for $323 million, became part of FTX's Chapter 11 filing in the United States in November 2022. Despite interest from other crypto exchanges like Coinbase, FTX Europe's operations in the region lasted only eight months before declaring bankruptcy.

On-Chain

In May 2023, a leading DeGods NFT was stolen from an individual who fell victim to a phishing site, resulting in a loss of $177K (99 ETH). Onchain detective ZachXBT played a pivotal role in recovering a significant portion of these stolen funds, which have since been returned to the victim. Despite the complexity of the case, involving the illicit funds being transferred across multiple accounts and ultimately dispersed to four different exchanges, ZachXBT's successful intervention suggests the possibility of reclaiming assets in the digital space.

Elsewhere, Glassnode performed an analysis focusing on liquidity pools for the leading tokens within each sector, examining the distribution of liquidity across different price ranges and the evolution of market depth. The findings indicate a balanced distribution of Altcoin reserves against WETH, leaning slightly towards higher upside volatility. This suggests a bullish sentiment among Liquidity Providers towards these tokens. However, the GameFi token IMX stands as an exception. Furthermore, an increase was observed in market depth within the -5% and +5% price ranges, indicating that LPs are bracing for a period of heightened price volatility.

Crypto Derivatives

• Funding rates remain positive for both BTC and ETH.
• Deribit Implied Volatility Index (DVOL) for BTC and ETH remained relatively stable at 55.06% and 63.04%, respectively.
• The 30-day 25-delta skew (C-P) for BTC remained unchanged at 2.52% while ETH dropped to 1.87%.
• The futures market witnessed $94.77M worth of liquidations, with shorts representing 64.7%.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

BTC's ATM IVs experienced an increase across both the 7-day and 30-day timeframes, reflecting the market's reaction to the anticipated release of the core personal consumption expenditures (PCE) price index this Thursday. The increase in IVs suggests that market participants anticipate potential volatility in this period, that could drive significant price changes.

BTC market's term structure has preserved its contango configuration, characterized by a slight increase in the short-term IV for contracts expiring within the next four days. This aligns with the release of the core PCE data scheduled for Thursday. 

The BTC 25-delta skew for both the 7-day and 30-day periods are on a positively increasing trend, reflecting growing confidence among investors in Bitcoin’s potential price action. This indicates that option investors are increasingly bullish on BTC. 

Lastly, during the US Trading Session, @Paradigm highlighted option flows this week with skew flips in favor of puts out to 1 March for BTC. Key BTC trades encompassed the purchase of 878x 29-Mar-24 54k/50k/46k PFly and a 500x +1.00 Call 29-Mar-24 58k -2.00 Call 29-Mar-24 65k custom strategy sold. Noteworthy ETH transactions include 24000x 26-Apr-24 3k/2.7k Call spread bought and 1500x -2.00 put 29-Mar-24 2.3k Calls +1.00 put 29-Mar-24 2.7k custom strategy bought.

Crypto Technical Analysis

On the 4-hour chart, BTC remains confined within a narrow range of $50.7K to $52.5K, despite experiencing a slight upward movement over the weekend. This consolidation suggests uncertainty in the market regarding BTC's near-term direction, with the upper and lower boundaries of the range serving as immediate resistance and support levels, respectively. If these levels are breached, the next resistance is anticipated at approximately $54K, marked by a trendline formed by local higher highs since late last year, offering a potential upside of around 5%. Conversely, the next support level is identified at roughly $49K, representing a potential downside of more than 5% if there is a reversal in price action. The RSI is at 49.62 in this timeframe, indicating a neutral market sentiment.

Moving on, ETH has made a decisive move above the $3K resistance level on the 4-hour chart, establishing a new ascending channel over the weekend. The surge in price has propelled the RSI above the overbought threshold, currently at 73.12, suggesting a potential pullback in the near term. The upper boundary of the channel now acts as an immediate resistance, situated around $3.15K. A clear break above this level may encounter further resistance in the range between $3.22K to $3.32K, last tested in February 2022. Conversely, the $3K level now serves as a strong support zone as the intersection of the previous resistance level and the lower boundary of the channel. 

Access institutional-grade commentary on TradFi × Crypto markets

By Treehouse Research

Daily Readings

TradFi

• China’s Weak Local Borrowing Raises Hope for More Central Aid

• Xiaomi bets big on its new EV — targets 20 million premium users.

• Chinese tech firm Lenovo shows off a laptop with a see-through screen.

• After doubts about Alibaba's future, co-founder Joe Tsai says: 'We're back'.

• China de-linking talk is overdone, Asian Development Bank says

• Koch network halts Nikki Haley campaign funding after South Carolina loss

• BP exec's husband guilty of insider trading $1.8 million, snooped on her calls

• Huawei spin-off Honor shows off tech to control a car with your eyes

• Battle for Red Sea expands with U.S. strikes, EU efforts against Houthis

• Smartphone giants like Samsung are going to talk up 'AI phones' this year — here's what that means

• Rep. Gallagher demands Elon Musk open SpaceX internet to U.S. troops in Taiwan

• Global house prices rebound as economists predict turning point

• Profit at rare earths miner Lynas drops on weak China demand

• Fed-Favored Inflation Gauge Seen Rising Most in a Year

• BYD Unveils $233,450 EV Supercar to Rival Ferrari, Lamborghini

Crypto

• Uniswap's UNI Jumps 60% on Proposal to Reward Token Holders in Major Governance Overhaul

• Craig Wright Admits to Editing Bitcoin White Paper Presented in COPA Trial

• Avalanche Is Back Up After Failing to Produce Block for Four Hours

• OANDA Opens FCA-Registered Crypto Trading Platform in the UK

• Grayscale’s Bitcoin ETF records lowest outflows since conversion

• Privacy-focused Aleo users concerned after KYC documents leak

• Blockchain cybercrimes trigger action from China’s national prosecutor

• Texas Blockchain Council and Riot secure win against US energy officials

• Carlson Group adds 4 Bitcoin ETFs to financial advisers

• FTX settles dispute, sells European arm for $33M

• SEC seeks comments on Bitwise, Grayscale Bitcoin ETF options

• ERC-20 wallet drainer gets a business license, Aave deploys on BNB: Finance Redefined

• Ethereum price increase driven by anticipation of Dencun upgrade: Grayscale

Deal Flow

• Binance Labs-backed web3 app store Magic Square acquires token launchpad TruePNL

Yours sincerely,
Treehouse Research 🌳