BTC

ETH

S&P 500 Futures

$60,470.00

$2,376.25

$5,839.25

(-2.73%)

 (-2.58%)

(+0.76%)

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 👇

September 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 officials were divided to cut rates based on Sep Meeting Minutes; Biden and Netanyahu spoke on Isreal’s tension with Iran (More in Macro & TradFi)
  • FBI charges 4 crypto companies and 14 people on fraud; Vitalik marked as the “Dark Horse” for upcoming Nobel Prize in Economics (More in DeFi & CeFi)
  • ZachXBT exposes MustStopMurad's token dumping; BTC sees bullish dormant activity spike (More in On-Chain)
  • BTC’s 7D and 30D IVs continue significant divergence; Over 80% of liquidations were longs (More in Crypto Derivatives)
  • BTC and ETH testing key support levels as selling pressure increases (More in Crypto Technical Analysis)

Macro & TradFi

The minutes from the Federal Reserve's September meeting reveal a division among officials regarding the extent of interest rate cuts, ultimately deciding on a 50 basis point reduction to balance inflation concerns with the strength of the labor market. While a substantial majority favored the larger cut, some members expressed a preference for a smaller, quarter-point reduction, highlighting ongoing uncertainties about inflation and employment conditions. The meeting marked the first dissenting vote from a Fed governor since 2005, as only one member, Governor Michelle Bowman, opposed the half-point cut. Economic indicators since the meeting, such as a stronger-than-expected increase in nonfarm payrolls and a drop in the unemployment rate to 4.1%, suggest a more resilient labor market, leading to expectations that future cuts may be less aggressive. Despite the Fed's easing cycle beginning, market pricing indicates that the federal funds rate could stabilize around 3.25%-3.5% by the end of 2025, while Treasury yields have risen sharply since the meeting, reflecting mixed reactions in the bond market.

Elsewhere, U.S. President Joe Biden and Israeli Prime Minister Benjamin Netanyahu spoke on October 9 amid rising tensions with Iran, particularly following a missile attack by Tehran. The 30-minute conversation was described as "direct and very productive" by the White House, although it highlighted ongoing disagreements between the leaders. Israeli Defense Minister Yoav Gallant promised a "lethal, precise, and surprising" retaliation against Iran for its actions, emphasizing that those who attack Israel will pay the price. While the U.S. supports Israel's actions against Iran-backed targets like Hezbollah, Biden has also expressed caution, indicating he would not endorse strikes on Iranian nuclear facilities. As tensions escalate, Biden faces criticism from within his party and concerns over the impact on upcoming elections, particularly with Arab American voters. The situation remains precarious, with fears of broader regional conflict.

Lastly,  U.S. stocks rallied, with the S&P 500 and Dow Jones Industrial Average hitting record closing highs, rising 0.7% and 1%, respectively, while the Nasdaq gained 0.6%. Large-cap tech stocks were mixed; Microsoft, Apple, and Amazon rose, while Nvidia, Meta, and Alphabet fell. Cruise stocks led gains, with Norwegian Cruise Line up 10.9% after positive analyst comments, and Corning added 4.8% on AI-driven fiber optics growth projections. Boeing fell 3.4% amid ongoing labor strikes, while utility stocks like Constellation Energy dropped as analysts flagged high valuations. The 10-year Treasury yield rose to 4.07%, crude oil dipped, gold slipped to $2,630 per ounce, and Bitcoin fell to around $60,800.

DeFi & CeFi

  • SEC, FBI, DOJ coordinate takedown of 4 fraudulent crypto firms
  • Vitalik Buterin seen as dark horse for 2024 Nobel Prize in Economics
  • Gary Gensler: “Crypto is unlikely to be a currency”
  • Wisdomtree debuts debit card
  • VanEck enters crypto VC space with its first fund trying to raise $30M 
  • World Liberty Financial proposes launching on  Ethereum mainnet’s Aave

U.S. federal prosecutors have charged four cryptocurrency firms—Gotbit, ZM Quant, CLS Global, and MyTrade—along with 14 individuals for fraud and market manipulation, marking a significant crackdown on the crypto industry. This action is described as the "first criminal prosecution of financial services firms" related to market manipulation in the crypto sector. The charges allege that the defendants created bogus cryptocurrencies, misrepresented them, and conducted wash trades to artificially inflate trading activity, misleading investors into believing these tokens were valuable investments. Once prices were inflated, the firms sold their tokens at these artificially high rates. The FBI notably created a fraudulent cryptocurrency, NexFundAI, as part of the investigation to identify these schemes. The U.S. Securities and Exchange Commission (SEC) has also filed civil charges against the involved firms and individuals, seeking permanent injunctions and financial penalties. The total amount of seized cryptocurrency exceeds $25 million.

Meanwhile, Vitalik Buterin, the co-founder of Ethereum, has been highlighted as a potential "dark horse" for the 2024 Nobel Prize in Economics by economists Tyler Cowen and Alex Tabarrok on their Marginal Revolution podcast. Cowen praised Buterin as an "unusual pick," arguing that his significant contributions to monetary economics, including the creation of Ethereum and the development of its proof-of-stake mechanism, warrant recognition. Both Cowen and Tabarrok emphasized that Buterin has actively advanced the field of economics through his work, with Tabarrok likening Ethereum's transition to proof-of-stake to changing tires on a moving car. They noted that while Satoshi Nakamoto, the anonymous creator of Bitcoin, remains a pivotal figure in cryptocurrency, Buterin’s contributions have established him as a leading intellectual in the space. The Nobel Prize winner will be announced on October 14.

On-Chain

ZachXBT has called out @MustStopMurad for using multiple wallets to accumulate a large supply of tokens, only to dump them on his followers for personal profit. By spreading his holdings across various wallets, Murad masked his control over the token supply, misleading his community before offloading the tokens. This tactic manipulated the market and also exploited the trust of his followers, who were left holding depreciated assets. ZachXBT’s investigation into these wallets reveals the importance of transparency in crypto dealings and serves as a warning about the risks of following influential figures without verifying their actions.

According to metrics from @Santiment and @lookonchain, Bitcoin's network saw a significant spike in dormant activity, coinciding with $37.4 billion in on-chain volume on Tuesday, the highest in seven months. Historically, this kind of movement—where stagnant BTC is reintroduced into circulation—has been a bullish signal, suggesting potential upward momentum in Bitcoin's future price. This renewed activity could reflect growing market confidence and liquidity, signaling positive trends for the cryptocurrency.

Derivatives

  • Funding rate for BTC and ETH remained positive. 
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH remained at 56.26% and 62.21% respectively.
  • The 30-day 25-delta skew (C-P) for BTC increased to 1.0 while ETH dropped to -1.40.
  • The futures market witnessed $168.79M in liquidations in the last 24 hours, with longs representing 85.49%.

Net Annualized APR

Perp (USDT pair)

Long on

Short On

116.09%

DOGE

Binance

dYdX

113.33%

DOGE

Bybit

dYdX

111.69%

DOGE

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.

Both the 7-day and 30-day ATM implied volatility for Bitcoin have slightly increased today. The 7-day ATM volatility has risen to 43.38, while the 30-day ATM volatility has ticked up to 53.92. This uptick in 7-day implied volatility reflects a marginal rise in short-term uncertainty, while the 30-day volatility remains elevated and has seen a slight increase as well, reinforcing that traders continue to be cautious about potential risks in the medium term. The divergence suggests that while the market has stabilized for now, there's still a cautious outlook for longer-term volatility, with traders continuing to hedge against potential risks further down the line.

Today's term structure continues to show a contango shape, where the implied volatility rises with longer maturities. The curve is consistent with previous days, with a slight upward shift across most maturities compared to yesterday. The near-term maturities (up to 30 days) display a slight increase in implied volatility, reflecting a modest rise in short-term uncertainty.

In the past day, the 7-day skew has dropped sharply towards the end of the day, indicating that traders are showing a higher preference for puts over calls in the short term, which could reflect increased demand for downside protection. Meanwhile, the 30-day skew remains relatively stable, with only minor fluctuations throughout the day. In the medium term, traders are not significantly shifting their positioning, keeping the outlook relatively balanced between calls and puts. 

Lastly, @Paradigm highlighted key BTC trades that included the purchase of a 275x 18-Oct-24 $57K Put, a 250x 25-Oct-24 $65K Call, a 100x 28-Mar-25 $80K/$100K Call Spread, a 100x 11-Oct-24 $61K / 29-Nov-24 $51K Put Calendar, and the sale of a 100x 27-Dec-24 $43K/$56K/$95K Call Fly.

For ETH, notable trades were the sale of a 6000x 29-Nov-24 $2.9K Call, the purchase of a 5000x 18-Oct-24 $2.2K Put, the purchase of a 2250x 25-Oct-24 $2.6K Call, the sale of a 1000x 11-Oct-24 $2.65K / 18-Oct-24 $2.7K Call Calendar, and the purchase of a 1000x 29-Nov-24 $2.6K Call.

Crypto Technical Analysis

Moving on to Technical Analysis, BTC declined significantly, as seen by the red candles the day before, indicating that bearish momentum is in play. BTC is currently trading around $60.6K, and approaching the immediate support level of $59.8K. If this support fails, the next critical support is around $57.5K, marked by the shaded red zone. Conversely, if BTC manages to hold at this support, a bounce could potentially occur and push the price toward the resistance level of $64.5K. RSI reflects this bearish sentiment as it approaches oversold territory at 32.8. Traders should watch out for signs of stabilization or a potential bounce if the support holds.

On the other hand, the ETH is trading around $2.3K, testing an ascending trendline that has been acting as dynamic support, forming higher lows since early September. The immediate static support level is present at $2.2K should ETH decline past this trendline. However, a bounce from this support level could see ETH testing the resistance level of $2.7K. The RSI level is at 41.53, trending downwards but not in oversold territory, suggesting weakening buying pressure. Traders should monitor this support closely for signs of either a breakdown or a reversal, as this will likely dictate the short-term direction of the price.

Access institutional-grade commentary on TradFi × Crypto markets

By TRHX Research

Daily Readings

TradFi

Crypto

Yours sincerely,
TRHX Research (Formerly Treehouse Research) 🌳