BTC

ETH

S&P Futures 500

$29,283.26

$1,862.21

$4,618.25

(-0.65%)

 (-0.64%)

(+0.20%)

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

GM Treehouser 🌳

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June 2023 Market Recap

Our Daily View

What We Are Covering Today

  • Eurozone economy returns to growth, but inflation is strong; Saudi Arabia’s economy slows due to oil production cuts (more in Macro & TradFi)
  • Matrixport and Bitdeer founder Jihan Wu claims to have bought the CRV dip amidst market uncertainties; BALD memecoin dumped by 90% after a sudden liquidity pull (more in DeFi & CeFi)
  • DEX activity surges; Uniswap sees shifts in bot usage and human trading (more in On-Chain)
  • BTC's 30-Day IV skew turns negative amid mixed market flows (more in Crypto Derivatives)
  • BTC and ETH show little price actions and trade in prior week’s range (more in Crypto Technical Analysis)

Macro & TradFi

The eurozone economy returned to growth in the second quarter with a 0.3% expansion, despite inflation slowing to 5.3% in July. Services inflation in the eurozone reached a record high of 5.6%, tempering hopes for rate cuts by the European Central Bank (ECB). The recent economic revival was weaker than the US, reporting 2.4% annualized growth. Italy's economy contracted by 0.3% in the second quarter, marking a deterioration from the previous quarter, while France's GDP growth accelerated to 0.5%, primarily driven by the export of a cruise ship. ECB president Christine Lagarde supported the forecast of 0.9% eurozone growth this year, despite criticism over rate increases.

On the other hand, Saudi Arabia's economy slowed in Q2, with GDP expanding by 1.1% annually, down from 3.8% in the previous quarter and 11.2% in the same period of 2022. The non-oil sector grew by 5.5%, but the hydrocarbon-reliant economy logged a 4.2% loss in non-oil GDP due to lower oil prices and production cuts. The IMF downgraded GDP growth projections for Riyadh from 8.7% in 2022 to 1.9% in 2023 due to OPEC+ cuts. The Middle East and Central Asian region are affected by the Saudi slowdown, with the IMF expecting 2.5% growth in 2023, down from 5.4% in 2022.

Asian markets rose on Monday despite China's factory activity remaining in contraction territory for the fourth month. Hong Kong's Hang Seng index rose 0.83%, and the Hang Seng Tech index climbed 1.87%. Japan's Nikkei 225 gained 1.26%, and the Topix rose 1.39% to set a new 33-year record. South Korea's Kospi advanced 0.93%, and Australia's S&P/ASX 200 climbed marginally. All three major indexes in the US gained on Friday, with the Dow rising 0.5%, the S&P 500 increasing marginally, and the Nasdaq Composite advancing 1.90%.

DeFi & CeFi

  • Jihan Wu, the founder of Matrixport and Bitdeer, expressed strong support for Curve
  • Coinbase’s Base chain TVL surged 100X in one day
  • The Ethereum community has found out that the recommended version of Vyper was flawed
  • Curve founder’s $168M deposit on Aave is under distress due to the price dump
  • BALD plunges 90% as the developer pulls liquidity

The recent exploit at DeFi platform Curve Finance has led to a significant drop of over 20% in the price of its CRV token, putting founder Michael Egorov's $168 million stash at risk of being liquidated. Egorov had used his CRV tokens as collateral to secure loans from various DeFi protocols, amounting to almost 34% of the token's total market capitalization. If a force liquidation happens, it could have substantial implications for the DeFi ecosystem, as the seized assets would flood the market with CRV tokens when prices were already falling.Following this rapid price dump, Jihan Wu, founder of Matrixport and Bitdeer, publicly supported Curve on this personal Twitter account. In his tweet, he recognized Curve Finance as one of the most critical infrastructures in DeFi and has personally bought the dip, exerting confidence in the rest of the market.

In other news, the newly-launched BALD memecoin on the Base blockchain experienced a drastic 90% decline in value after reaching a peak on Monday, as the developer removed millions of dollars worth of liquidity. The token's market cap had surged to $50 million on Sunday and reached $85 million later that day, resulting in millions of profits for some traders. However, the sudden removal of liquidity caused prices to drop from 9 cents to 1 cent. Although prices partially recovered to 4 cents due to some buying activity, many panicked holders sold their tokens, leading to continued volatility in the market.

On-Chain

According to an analysis by @Glassnode, there's a marked resurgence in DEX activity when comparing the DEX vs. CEX exchange flows for the top eight DeFi tokens. The relative share of volume traded on DEXs has surged from 3.75% at the beginning of June to 29.2% today, nearing the highs observed during the latter half of 2022. This trend indicates a significant and simultaneous shift toward decentralized exchanges, reflecting a broader sentiment of confidence or strategic alignment within the DeFi community. Overall, the market may continue to monitor this activity to understand potential impacts on DeFi tokens and the broader crypto ecosystem.

Glassnode's latest data also reveals some shifts on Uniswap. Sandwich bots now account for a whopping 60% of daily volume, while Arbitrage bots have dropped from 20% to just 10% since the year's start. Meanwhile, human traders are returning, with their volume climbing to 30% since July.

Crypto Derivatives

  • BTC and ETH funding rates continue to stay positive.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH rose to 37.18% and 35.58%, respectively.
  • 30-day 25-delta skew (C-P) for BTC flipped negative to -0.42% and while ETH skew fell to -2.23%.
  • The futures market witnessed $42.75M worth of liquidations yesterday with longs representing 63.72% of the total.

Top 3 CEX USDT perp funding rate arbitrage based on the last 24-hour lookback:

Net Annualized APR

Perp (USDT pair)

Long on

Short On

18.32%

ETH

Bybit

dYdX

10.77%

BTC

Bybit

dYdX

10.72%

SOL

OKX

Bybit

Source: @CexyArbBot Telegram

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

2) CEX observed include Binance, Bybit, OKX & DYDX

@CexyArbBot allows you to customize CEX, 100+ pairs & lookback periods combo

The 7-day IV for BTC surged at the onset of the week, while longer tenors largely held their ground. Over the last 30 days, the 30-day ATM IV for BTC has trended downward, reaching a low of 30.54%.

The term structure continues to be in contango, characterized by its smooth upward gradient. Notably, while short-tenor IVs experienced a slight uptick as the week commenced, IVs across all durations appeared resilient, even amidst disruptions in the DeFi sector due to the Vyper compiler vulnerabilities and the ensuing curve pool exploit aftermath.

The market brimmed with optimism after Blackrock's disclosure about its spot BTC ETF filings last month. Yet, this positive skew has waned. For the first time in the past month, 30-day skews for BTC have ventured into negative territory, signaling a preference for puts. As for ETH, skew persistently leans negative along the curve, perhaps in anticipation of the looming deadlines for U.S. Spot Bitcoin ETF approvals expected in early September.

@tradeparadigm reported mixed flows. In the BTC realm, principal structures include a 575x 27-Oct-23 $38K Call purchase, a 400x 29-Dec-23 $20K/$40K Bull Risk Reversal acquisition, and a 100x 25-Aug-23 $30K/$29K Put Spread offload. In contrast, for ETH, dominant trades featured a 5000x 28-Jun-24 $2.3K Call sale, a 1050x 29-Sep-23 $2.1K Call sale, and a custom bullish strategy involving the purchase of a 1000x set: -1 Put 18-Aug-23 at $1.8K, +1 Call 18-Aug-23 at $1.9K, and -1 Call 18-Aug-23 at $2.05K.

Crypto Technical Analysis

After losing less than 0.2% yesterday, BTC is trading in a narrow channel established last week. The $29K and $29.5K price levels act as support and resistance levels for this channel, respectively. The 4H chart shows muted price action with little volatility: the MACD is near the zero line, and the ADX is below 20, indicating a weak trend and no directional bias.

Like BTC, ETH trades relatively muted price action in a trading range established last week. The overhead resistance for this channel is at $1.9K, while the support level is at $1.83K, and ETH is currently trading at the bottom of that range. It is difficult to forecast a trend since the MACD is near the zero line, and the ADX is at 15, indicating low momentum and a weak trend.

Access institutional-grade commentary on TradFi × Crypto markets

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Treehouse Research 🌳