BTC

ETH

S&P 500 Futures

$96,450.75

$3,640.00

$6,021.75

(+4.86%)

 (+9.89%)

(-0.30%)

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

GM 🌳

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October 2024 Market Recap

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Our Daily View

What We Are Covering Today

  • Donald Trump finalizes economic team; French markets faces increased volatility (More in Macro & TradFi)
  • U.S. court limits Tornado Cash sanctions; MetaMask integrates Venmo to simplify crypto adoption (More in DeFi & CeFi)
  • ERC-20 stablecoins hit $102.1B total market cap; Ethereum exchange flows show positive outlook (More in On-Chain)
  • Bitcoins’s term structure returns to contango state; Short-term 7-day skew back to neutral territory following last night’s price surge (More in Crypto Derivatives)
  • BTC rebounds back to $96K levels; ETH breakouts and currently testing upper Bollinger band (More in Crypto Technical Analysis)

Macro & TradFi

Donald Trump has completed his economic team appointments for his upcoming term, signaling a continuation of protectionist trade and economic policies. Jamieson Greer, a former chief of staff to Robert Lighthizer, has been named US Trade Representative (USTR). Trump has also engaged Kevin Hassett, a former chair of the Council of Economic Advisors, as director of the National Economic Council (NEC). Hassett’s role will involve coordinating economic policy, including extending tax cuts and pursuing deregulation, particularly in the energy sector. Scott Bessent, a hedge fund manager, was recently chosen as Treasury Secretary, rounding out Trump’s economic team. The appointments, coupled with Trump’s tariff threats, suggest an intensification of protectionist measures. The strategy reflects Trump’s focus on bolstering domestic manufacturing and renegotiating trade deals while navigating tensions with top trade partners like China and the USMCA signatories.

In other news, French bonds and stocks tumbled on Wednesday amid investor concerns that Prime Minister Michel Barnier’s government could collapse over its contentious belt-tightening draft budget. The 10-year French bond yield spread with Germany widened to 0.9 percentage points, its highest level since the Eurozone crisis in 2012, before easing slightly. The benchmark CAC 40 index fell 0.7%, with financial institutions like Axa and SociĂ©tĂ© GĂ©nĂ©rale leading the losses, down 4.3% and 3.5%, respectively. Barnier aims to implement €60B in spending cuts and tax increases despite lacking a parliamentary majority. To bypass legislative opposition, he plans to invoke a constitutional mechanism, exposing his government to potential no-confidence votes. Far-right leader Marine Le Pen has warned that Barnier is ignoring her demands to shield the public from tax hikes, threatening to bring down his administration. Investors fear that if the budget fails, France’s already high debt burden, with a deficit exceeding 6% of GDP—double the EU’s target—would worsen. French bond yields rose above 3%, nearing levels seen in heavily indebted Greece, reflecting mounting doubts about Paris’s fiscal sustainability. Barnier has pledged to reduce the deficit to 5% of GDP by 2025 and within EU limits by 2029, but his efforts remain doubtful. As a critical vote on social spending approaches, increased volatility could ensue within France's financial and political landscape.

 On Wednesday, U.S. stocks pulled back ahead of the Thanksgiving break, with the S&P 500 falling 0.38% and the Nasdaq Composite declining 0.6%, while the Dow Jones Industrial Average slipped 0.31%. Technology stocks led the declines, with Nvidia, Microsoft, Amazon, Tesla, Apple, and Meta Platforms all losing ground, though Alphabet posted a slight gain. Earnings-related disappointments weighed heavily, with Dell down 12%, HP losing 11%, and Autodesk, Workday, and CrowdStrike falling 8.6%, 6.2%, and 4.6%, respectively. Economic data released Wednesday, including the Fed's preferred inflation measure, largely met expectations, and market participants are closely monitoring these indicators for signs of economic stability and potential impacts on Federal Reserve rate decisions. The yield on 10-year Treasurys fell to 4.26% from 4.30%, pausing a general upward trend as markets reassess the Fed's easing outlook. Both stock and bond markets will close Thursday for Thanksgiving, with shortened trading hours on Black Friday. Investors' focus is now on JOLTs job opening news on December 3 at 23:00 SGT and Non-Farm Payrolls and Unemployment Rate data on December 6 at 21:30 SGT. Additionally, the Tokyo CPI data is due this Friday, 07:30 SGT.

DeFi & CeFi

  • US appeals court says Treasury 'overstepped' authority in Tornado Cash sanctions
  • MetaMask integrates Venmo to enhance fiat-to-crypto onramp options
  • Ex-CFTC Chair Chris Giancarlo Eyes Role as Trump's 'Crypto Czar’
  • Avant, Ethena-like DeFi protocol, raises $6.5 million in seed funding
  • DeFi derivatives protocol Cega to sunset platform by end of year following acquisition
  • Flashbots unveils BuilderNet to combat centralization in Ethereum’s block-building

A U.S. appeals court ruled that the Treasury Department’s Office of Foreign Assets Control (OFAC) exceeded its authority by sanctioning Tornado Cash, reversing a lower court's decision. The court determined that Tornado Cash’s smart contracts, as immutable lines of code, do not qualify as “property” and, therefore, cannot be sanctioned under the International Emergency Economic Powers Act (IEEPA). This decision challenges OFAC's broader regulatory approach, which had linked Tornado Cash to North Korea’s nuclear program and imposed sanctions in 2022. Following the ruling, the governance token TORN saw a dramatic price surge. Coinbase, which supported the lawsuit, called the decision a pivotal victory for the cryptocurrency sector and digital rights. The ruling sets a precedent that applies traditional sanctions frameworks to decentralized software.

Elsewhere, MetaMask has integrated Venmo into its platform, enabling U.S. users to purchase cryptocurrency directly through the popular payment app, as announced on November 27. The integration, facilitated by fintech company Moonpay, enhances MetaMask's fiat-to-crypto onramp options, which already include Apple Pay, PayPal, and traditional payment methods like wire transfers and ACH bank transactions. This feature builds on Venmo’s existing crypto capabilities, including transfers launched in April 2023. While MetaMask's fiat-to-crypto services span roughly 200 countries, the Venmo integration is exclusive to the U.S. MetaMask’s focus on simplifying crypto adoption and payments marks a significant step toward empowering retail consumers to easily trade cryptocurrency.

On-Chain

In an on-chain analysis by CryptoQuant, the total market cap of ERC-20 stablecoins has reached a new all-time high of 102.1B. This milestone reflects growing investor confidence, as the increasing stablecoin supply indicates that market participants are maintaining funds in a liquid, stable form, ready for potential deployment. Furthermore, this surge enhances market liquidity, which could translate into higher buying pressure and smoother capital flows. Additionally, the rising stablecoin market cap correlates with increased on-chain activity, signaling heightened user participation and engagement in the crypto ecosystem.

Meanwhile, another CryptoQuant report shows that the Ethereum Exchange Netflow for derivative exchanges has recently recorded two significant inflows of 42,000 ETH, marked by red arrows. These substantial transfers indicate a large amount of ETH moving into derivative exchanges, which often signals the opening of short positions. ETH Exchange activity aligns with Ethereum’s price action, suggesting traders may be anticipating a price reversal or increased volatility at this key price point. 

Derivatives

  • The funding rate for BTC and ETH remained positive.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH dipped slightly to 59.44 and 74.68, respectively.
  • The 30-day 25-delta skew (C-P) for BTC rose to 2.88 while that of ETH declined again to 3.47.
  • The futures market witnessed $266.1M in liquidations, with shorts representing 70.10%.

Net Annualized APR

Perp (USDT pair)

Long on

Short On

17.01%

XRP

Binance

Bybit

13.01%

XRP

OKX

Bybit

9.67%

BNB

Bybit

OKX

Notes:

1) Pairs observed include BTC, ETH, SOL, BNB, XRP, LTC, and DOGE vs. USDT perps. 

2) CEXs observed include Binance, Bybit, OKX & dYdX.

3) Lookback period is 24 hours.

Bitcoin's at-the-money IV for 30-day contracts has remained relatively stable, suggesting that yesterday’s price movements have had little effect on traders’ expectations for the crypto major over the next month. In contrast, the 7-day IV has experienced another decline, likely driven by last night’s price surge, which appears to have alleviated some of the market’s short-term concerns.

BTC's term structure has returned back to the contango state with significant drops in IV for contracts with short-term expiries. 

Bitcoin's skew has shown a significant recovery. While still slightly negative, it has largely returned to neutral territory for the 7-day contracts. The skew recovery follows BTC's sharp price rebound, which has eased some of the market's concerns about BTC as the year-end approaches.

Crypto Technical Analysis

On the 4-hour chart, BTC's price has rebounded from the $91.9K support level and is currently trading around $96.2K, breaking above the key $94.7K resistance mentioned yesterday. This marks a 4.7% recovery and indicates strong buying momentum. The Bollinger Bands have expanded slightly, showing increased volatility, with BTC moving towards the upper band, suggesting continued bullish pressure. The RSI has improved to 55.12 from 39.17 yesterday, reflecting a shift from bearish to neutral-to-bullish momentum. 

On the 4-hour chart, ETH has successfully broken above the resistance at $3.38K and is now trading around $3.64K. The breakout above 3.38K marks a significant 7.6% rally, driven by strong bullish momentum. The price is currently testing the upper Bollinger Band, which suggests ETH is in overbought territory and could face some short-term consolidation or profit-taking. The Bollinger Bands have widened, indicating increased volatility, while the RSI has surged to 68.77 from 40.38 yesterday, nearing overbought levels. If the bullish momentum persists, the next target could be the psychological resistance at $3.7K. On the downside, $3.38K, the previous resistance, now serves as strong support. This breakout confirms the bullish scenario mentioned in yesterday’s analysis, as ETH capitalized on tightening Bollinger Bands to initiate an upward move, supported by improved market sentiment and increased buying pressure.

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TRHX Research (Formerly Treehouse Research) 🌳