BTC

ETH

S&P 500 Futures

$67,074.50

$2,628.75

$5,889.00

(-3.00%)

 (-4.25%)

(-0.40%)

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


GM 🌳

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Our Daily View

What We Are Covering Today

  • Fed considers rate cuts while ECB remains hawkish; China's buybacks surge (More in Macro & TradFi)
  • Ripple co-founder added $10M in XRP to Kamala Harris’s backings; Sushi aired a new roadmap with cross-chain swaps and other new features (More in DeFi & CeFi)
  • Total BTC in accumulation addresses surpasses 2.9M; XRP ledger wallet sees spikes in new wallets created (More in On-Chain)
  • BTC 7-day IV easing off in volatility; BTC’s 25-delta skews diverges, with 7-day skews decreasingly bullish (More in Crypto Derivatives)
  • BTC pulls back after going above 69K; ETH struggles at 2.6K after breaking down on support (More in Crypto Technical Analysis)

Macro & TradFi

San Francisco Federal Reserve Bank President Mary Daly emphasized the need for continued interest rate cuts as inflation decreases, warning that overly tight policy could harm the labor market. Daly advocates for reducing the Fed’s policy rate, currently at 4.75%-5%, to a more neutral level of around 3%, aiming for a "soft landing" with 2% inflation and a stable labor market. In contrast, European Central Bank (ECB) officials, like Slovenia's central bank governor Boštjan Vasle, caution that recent back-to-back rate cuts by the ECB do not signal a trend. Vasle stresses that future actions will depend on inflation developments, indicating a more cautious approach than the Fed’s.

Elsewhere, Chinese share buybacks have surged to record levels in 2024, reaching RMB235bn ($33bn) as Beijing encourages companies to return cash to shareholders to boost the faltering stock market. This figure, more than double last year’s total, reflects efforts by the government to stimulate the economy and lift investor confidence, with the CSI 300 index rising over 20% in the past month. The People's Bank of China has introduced a RMB300bn loan scheme to support stock repurchases, prompting major companies like Sinopec to announce significant buyback plans. While these moves provide short-term market relief, there are questions about their effectiveness in addressing China's broader economic challenges, highlighted by slowing growth and diminished IPO activity.

During yesterday's trading session, U.S. stock markets closed mixed. The Dow Jones Industrial Average dipped by 0.80%, marking its third decline of the week. The S&P 500 also fell by 0.18%, while the Nasdaq Composite rose by 0.27%. Gold hit a record high, driven by expectations of rate cuts and geopolitical tensions in the Middle East. Consumer and homebuilder stocks were among the worst performers, with Target dropping 3.8%, Builders FirstSource falling 5.2%, and Lennar losing 4.4%. The 10-year Treasury yield surged by nearly 12 basis points to 4.19%. Investors are now closely watching the U.S. JOLTS Job Opening data, due next Tuesday, 22:00 SGT. 

DeFi & CeFi

  • Ripple co-founder backs VP Kamala Harris with another $10M in XRP
  • Sushi unveils roadmap to introduce cross-chain swaps
  • Transak hit with a data breach
  • Northern data ditches the Bitcoin mining business to focus on AI
  • Ledger enables THORChain’s cross chain swaps

Ripple co-founder Chris Larsen is significantly backing Vice President Kamala Harris's 2024 election campaign, having donated over $11 million in XRP with him announcing another $10 million contribution to the Democratic super PAC Future Forward. Larsen, who has emerged as the crypto industry's most prominent supporter of Harris, emphasizes her potential to foster a new approach to technology and innovation, particularly in the realm of cryptocurrency. 

Meanwhile, Sushi has unveiled its Super Swap Roadmap, introducing a significant advancement in its decentralized exchange (DEX) capabilities with the launch of the Route Processor. This new feature enhances Sushi's multi-chain functionality by aggregating liquidity across over 35 chains, enabling users to access deep liquidity pools and optimal swap rates. The Route Processor aims to streamline the swapping experience, allowing users to "SWAP ANYTHING" efficiently. Alongside this, Sushi is launching "Blade," a no-impermanent-loss automated market maker (AMM) designed to attract liquidity providers without the usual risks associated with impermanent loss. The roadmap also includes initiatives like the Swap API for partners, native DEX development for various networks, and plans for marketing campaigns to engage the community. With recent growth in trading volume, Sushi is positioning itself as a leader in the DeFi space, striving to create a seamless and rewarding experience for traders and liquidity providers alike.

On-Chain

According to CryptoQuant analyst Burak Kesmeci, Bitcoin accumulation addresses have surpassed 2.9 million BTC, nearly doubling their holdings from 1.5 million in January 2024. These addresses, known for never having Bitcoin outflows, reflect a strong long-term strategy by both individual and institutional investors, signaling confidence in Bitcoin’s future. The rapid growth in 2024, following a rise from just 100,000 BTC in 2018, indicates a consistent accumulation trend. If Bitcoin reaches $70,000 by year-end, the value of these holdings could exceed $210 billion, placing these investors in a financial position comparable to some of the largest global corporations.

Another analysis by Santiment provided insights into the recent surge in activity on the XRP Ledger, with 35,799 unique wallets making transfers in a single day, marking a notable uptick in network engagement. This was the highest daily activity seen in over three months, indicating renewed interest or use cases for XRP. Additionally, 3,858 new wallets were created in the same period, the highest number in over seven months, which suggests the onboarding of new users or entities into the ecosystem. This spike in activity may be tied to speculation that Ripple’s donation to Kamala Harris's campaign could yield favorable returns if she performs well in the upcoming election, signaling a potential increase in strategic interest around XRP.

Derivatives

  • Funding rate for BTC and ETH remained positive.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH decreased to 55.71% and 62.86% respectively.
  • The 30-day 25-delta skew (C-P) for BTC and ETH dipped to 4.02 and 2.87 respectively.
  • The futures market witnessed $204.38M in liquidations over the weekend, with shorts representing 85.40%.

Net Annualized APR

Perp (USDT pair)

Long on

Short On

43.24%

ETH

dYdX

OKX

42.04%

AVAX

Bybit

dYdX

39.58%

AVAX

OKX

dYdX

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.


BTC 7-day and 30-day at-the-money IV decreased to 44.04 and 54.68, respectively. This highlights that market volatility is easing off slowly after a rapid increase in the past day. The general trend across the time is slightly downward suggesting that market participants may be pricing in reduced uncertainty as time progresses.

The Bitcoin term structure exhibits a contango pattern, with a pronounced increase in implied volatility (IV) for short-dated tenors up to 21 days. This suggests heightened uncertainty in the near term. However, longer-dated options maintain relatively stable IV levels, indicating that the market anticipates volatility to taper off and normalize over the medium to long term.

BTC’s 25-delta skew maintains a bullish sentiment, but both the 7-day skew and the 30-day skew have diverged away from each other to levels of 1.98 and 4.02, respectively. This divergence shows that traders are decreasingly bullish over the short-term. The BTC major market shows that traders have a preference for OTM calls over puts, possibly indicating greater demand for upside exposure. 

Lastly, @Paradigm highlighted mainly vanilla options being procured. For BTC, the top trades included the purchase of a 325x 8-Nov-24 $80K Call, 225x 8-Nov-24 $72K Call, and 200x 25-Oct-24 $68K Call. For ETH, the largest flows featured the sale of a 6250x 29-Nov-24 $2.4K Put, 4250x 25-Oct-24 $2.6K Put, and the purchase of a 1625x (Inverse) 24-Oct-24 $2.775K/ 25-Oct-24 $2.9K Call Calendar.

Crypto Technical Analysis

Moving on to technical analysis, BTC recently surged to a monthly high of approximately 69.4K before facing resistance and falling back down to its current level around 67.5K. The price action shows that BTC was unable to maintain its push beyond the significant resistance level at 69.8K, which coincides with a previous peak. Should this resistance be breached in a future attempt, the next key level to watch would be 72.9K. On the downside, the 63.9K area offers a firm support level, a fall of about 5% from current price levels.

ETH has also pulled back after briefly going above the 2.7K level yesterday, which has now turned into resistance following the breakdown. ETH was unable to sustain its upward momentum beyond this level and is currently trading around 2.65K. The price action suggests that ETH has found short-term support near 2.6K, a critical level to monitor, while 2.8K remains the next resistance. If the price fails to hold at 2.6K, further downside could lead to a retest of the 2.4K support zone, a drop of roughly 9% from current levels. The RSI stands at 57.53, indicating moderate bullish strength, though it is starting to flatten, suggesting potential consolidation or weakening momentum.

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TRHX Research (Formerly Treehouse Research) 🌳