BTC

ETH

S&P 500 Futures

$75,990.25

$2,906.50

$6,003.25

(+0.85%)

 (+6.45%)

(+0.86%)

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

GM 🌳

Welcome to the TRHX Pulse newsletter (formerly Treehouse Daily), where TRHX delivers your daily dose of financial news and insights for free! We believe you'll find it both informative and valuable.

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

October 2024 Market Recap

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

  • Fed trims interest rate by another 25 bps; Blackrock in talks to take a minority stake in Millennium (More in Macro & TradFi)
  • Wintermute proposes fee switch for Ethena; Ethereum Foundation launches Mekong testnet (More in DeFi & CeFi)
  • Binance’s exchange reserve hits record high, nearing Coinbase's lead; Stablecoin inflows signal potential rally (More in On-Chain)
  • BTC ATM IV dips to 33.2 IV percentile; Skew indicates strong bullish sentiment for BTC. (More in Crypto Derivatives)
  • BTC maintains its record high price of $76K; ETH set to test psychological price level of $3K (More in Crypto Technical Analysis)

Macro & TradFi

The Federal Reserve cut its benchmark interest rate by 0.25% to a range of 4.50%-4.75%, marking its second consecutive rate reduction as part of a “recalibration” of monetary policy. In light of ongoing inflation concerns and a slightly softer labor market, Fed officials are balancing their focus on inflation with employment support. Fed Chair Jerome Powell emphasized that the adjustments aim to keep the economy and job market resilient while controlling inflation. With the election of President-elect Donald Trump, known for his past criticisms of Powell, there may be additional scrutiny on Fed policy, though Powell stated that political factors would not impact policy decisions. Markets anticipate one more quarter-point cut in December as the Fed evaluates the broader economic impact of its rate cuts.

BlackRock is in preliminary talks to acquire a minority stake in Millennium Management, marking the first time Millennium’s founder, Izzy Englander, has considered outside investment in the firm since its 1989 inception. This potential partnership reflects BlackRock’s strategic push into alternative investments, with CEO Larry Fink prioritizing higher-fee assets like hedge funds. Millennium, a major player in the multi-manager hedge fund sector with strong annual returns averaging 14%, would complement BlackRock’s recent acquisitions in alternative assets, bringing its total in this area to $450 billion. The investment could also support Millennium’s plans to expand into less-liquid assets, such as private credit, as part of Englander’s succession planning and the firm’s ongoing institutionalization efforts.

Lastly, U.S. stocks surged on Thursday, continuing a post-election rally as the Federal Reserve cut its benchmark interest rate by 0.25%. This move sent the S&P 500 and Nasdaq Composite to new intraday and closing record highs, rising 0.7% and 1.5%, respectively. The Dow Jones, although slightly down at the close, reached an all-time high earlier in the day. Standout performers included Zillow (Z), up 24% after reporting robust third-quarter sales, and AppLovin (APP), which jumped 46% on stronger-than-expected earnings and a positive outlook. Lyft (LYFT) and Under Armour (UA) each gained over 20%, driven by solid earnings. Major tech names like Nvidia (NVDA), Apple (AAPL), and Tesla (TSLA) also saw gains, with Tesla up 2.9%, buoyed by optimism regarding its future under President-elect Trump. Treasury yields eased to 4.33%, and gold rose 1.4% to $2,710 an ounce.

DeFi & CeFi

  • Wintermute proposes fee switch for Ethena
  • Ethereum Foundation launches Mekong testnet
  • Mark Uyeda appears to be the favorite to be the new SEC Chair
  • Magic Labs, Polygon launches cross-chain smart wallet
  • Detroiters will be able to pay their taxes in Crypto with PayPal

Wintermute has proposed activating a fee switch within the Ethena protocol to establish fair revenue-sharing guidelines for staked ENA (sENA) holders, showing the need for transparency amid Ethena's growth. Wintermute’s proposal highlights the protocol’s substantial earnings from its synthetic dollar stablecoin, USDe, which has achieved a market cap exceeding $2.8 billion. Wintermute suggests that the Ethena Risk Committee consider setting benchmarks—such as USDe’s circulating supply, revenue levels, and adoption metrics—to guide future revenue distribution to sENA holders. Additionally, the proposal calls for clarification on Ethena’s revenue distribution model to address potential conflicts in its structure and ensure fair benefits for token holders. This proposed change will require community approval through a vote.

In other news, the Ethereum Foundation has launched the Mekong testnet, a temporary network aimed at giving developers a preview of features planned for the upcoming "Pectra" fork, also known as the Prague-Electra upgrade. The Mekong testnet, introduced on November 7, enables developers to explore UX improvements and staking process changes without impacting Ethereum’s mainnet or other testnets like Holesky and Sepolia. According to the Foundation, this testnet offers a "playground" for wallet developers and stakers to test modifications, including new Ethereum Improvement Proposals (EIPs) that are expected to roll out across the Ethereum ecosystem.

On-Chain

In an on-chain analysis by CryptoQuant, Binance's Exchange Reserve Percentage recently reached a record high of 25%, showing its continued dominance amongst the CEXs. The exchange reserve metric reflects the proportion of all exchange reserves held by Binance, which has climbed approximately 4% from 21% in November 2023. Although this growth might appear modest, Binance now ranks second in reserve percentage, trailing only Coinbase, which leads at around 33%. If this trend continues, Binance could potentially rival Coinbase for the highest percentage of exchange reserves.

In another analysis by CryptoQuant, a remarkable $9.3 billion inflow of ERC-20 stablecoins into major exchanges like Binance and Coinbase occurred immediately following the U.S. presidential election results. Binance received the lion’s share with $4.3 billion, while Coinbase saw inflows of $3.4 billion, with the remainder directed to smaller exchanges. This is the second-largest influx of ERC-20 stablecoins recorded, signaling potentially significant buying power now available on these platforms. Historically, substantial stablecoin inflows, such as those observed between September 2020 and February 2021, have aligned with major market rallies.

Derivatives

  • Funding rate for BTC and ETH remained positive.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH remained relatively flat at 53.78% and 62.50% respectively.
  • The 30-day 25-delta skew (C-P) for BTC rose to 3.77 while ETH rose higher to 5.46.
  • The futures market witnessed $335.32M in liquidations in the last 24 hours, with shorts representing 62.45%.

Net Annualized APR

Perp (USDT pair)

Long on

Short On

14.96%

BNB

Bybit

OKX

9.33%

XRP

Binance

OKX

7.48%

BNB

Binance

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 7-day at-the-money IV holds steady at 53.27, while the 30-day IV has declined to 49.82, signaling expectations of subdued price movement. This relatively low IV, sitting at the 33.2nd percentile on Deribit’s IV Percentile ranking, indicates that Bitcoin’s current IV has been lower only 33.2% of the time over the past year. This low volatility likely reflects a market response to the recent Federal Reserve rate decision, alongside a lack of specific near-term catalysts for Bitcoin, suggesting that traders anticipate stable prices in the near term.

BTC's options term structure remains in contango, with IV dropping across the curve, particularly on the short end, as hedgers either exercised their options or allowed out-of-the-money contracts to expire. Options investors may be expecting Bitcoin to remain within a range within the next 30 days.

Bitcoin’s 7-day and 30-day call-put skews have increased to 3.77 and 2.87, respectively, indicating a bullish sentiment among option takers who perceive further upside potential in BTC.

Lastly, @Paradigm top structures highlighted a mix of instruments for BTC and bearish trades for ETH. For BTC, key trades involved the purchase of 450x (Inverse) 22-Nov-24 $80K / 29-Nov-24 $88K Call Calendars and 325x 27-Jun-25 $90K/$120K Call Spreads, indicating bullish positioning with time-spreaded and high-strike exposure. In ETH, substantial positions included the sale of 42,375x 28-Mar-25 $2.8K/$3.8K Call Spreads and the purchase of 6,862x 27-Dec-24 $3.1K/$3.6K Call Spreads, reflecting both profit-taking and upside exposure within structured spreads.

Crypto Technical Analysis

The price of BTC rose to a record high of $76K, with the immediate support level around $72.6K, representing a 4.4% drawdown from current price levels. BTC’s price is trending within the upper Bollinger Band, confirming strong bullish pressure. The RSI is around 70.34, approaching overbought territory. This suggests that Bitcoin’s current upward momentum is strong but could face a short-term pullback if it moves deeper into overbought levels. However, the RSI isn’t fully in the extreme zone, so it leaves room for some additional upside before reaching an overbought peak. Traders should adopt a cautious approach as BTC’s RSI level and Bollinger bands indicate overwhelming buying pressure and a potential pullback to the $72.9K support level may occur if overbought pressures intensify.

ETH has experienced a strong breakout, moving above previous resistance at approximately $2.75K and now trading above $2.9K. The surge in price has brought ETH close to the psychological resistance of $3K, where selling pressure might occur. The immediate support lies at $2.75K, with further support around $2.5K if a deeper correction occurs. The price has sharply risen to the upper Bollinger Band, which suggests immense buying pressure, while the wide spread of the bands indicates high volatility, reinforcing the possibility of price swings in either direction. The RSI is currently at 79.31, indicating strong momentum but also signaling potential exhaustion. Traders should remain cautious for a potential reversal.

Access institutional-grade commentary on TradFi Ă— Crypto markets

By TRHX Research

Daily Readings

TradFi

Crypto

Yours sincerely,
TRHX Research (Formerly Treehouse Research) 🌳