BTC

ETH

S&P Futures 500

$68,314.67

$3,556.75

$5,503.50

(+1.68%)

 (+1.67%)

(+1.02%)

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


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Our Daily View

What We Are Covering Today

  • Federal Reserve revises rate forecast to just one cut; EU will be imposing an increase in tariffs on China EVs (More in Macro & TradFi)
  • Donald Trump expresses desire to mine more Bitcoin in the U.S.; SEC reaches settlement with Terraform Labs (More in DeFi & CeFi)
  • Whales took advantage of the recent price correction to accumulate more BTC; OKX burns another $552M of OKB (More in On-Chain)
  • Implied volatility declined after the FOMC decision; BTC term structure reverted to contango (More in Crypto Derivatives)
  • Both BTC and ETH experienced significant volatility following a hawkish Fed statement after a bullish CPI announcement. (More in Crypto Technical Analysis)

Macro & TradFi

Federal Reserve officials have revised their interest rate forecast, now planning only one rate cut for 2024, down from three previously anticipated, while signaling additional cuts in 2025. This adjustment aligns with their cautious approach to ensuring inflation consistently moves toward their 2% target. In recent statements, Fed Chair Jerome Powell highlighted modest improvements in inflation but stressed the need for more conclusive data to consider further rate reductions. This stance comes amidst global shifts in monetary policy, with other major central banks like the ECB and the Bank of Canada already implementing rate cuts. Additionally, US inflation decreased to 3.3% in May, boosting stock markets and President Joe Biden's outlook. This figure, slightly below economists' expectations, led to increased speculation about early interest rate cuts by the Federal Reserve.

Elsewhere, the European Union has announced an increase in tariffs on Chinese electric vehicles (EVs), setting a 38.1% duty on manufacturers who did not cooperate with their investigation and a 21% tariff on compliant companies. This decision, effective from July 4 if no agreement is reached with China, follows an EU probe into "unfair subsidization" within China's EV sector, which the EU claims poses economic threats to its local industry. The EU aims to protect its EV market against subsidized Chinese imports, which it says are sold at artificially low prices, potentially harming European producers. This move has sparked a strong response from China, labeling the tariffs a "protectionist act" that disrupts global trade and competition standards, further intensifying trade tensions between the EU and China.

On Wednesday, the S&P 500 and Nasdaq recorded their third consecutive day of record highs, buoyed by unexpected flat inflation data from the May CPI report, which initially spurred market optimism. However, sentiment was tempered by the Federal Reserve's revised rate forecast. The Dow Jones Industrial Average slightly dipped by 0.09%, while the S&P 500 increased by 0.85%, and the Nasdaq rose by 1.53%. Notably, Oracle's shares surged 13.3% after forecasting double-digit revenue growth for fiscal 2025, contributing significantly to the market's upward movement. Apple's shares also climbed by 2.9%, briefly making it the world's most valuable company again. 

DeFi & CeFi

  • Donald Trump wants more Bitcoin to be mined in the U.S after meeting with CleanSpark and Riot Platforms
  • SEC reaches $4.47B settlement with Terraform Labs
  • Aethir launches decentralized cloud network on Ethereum mainnet
  • MoonPay announces PayPal fiat on-ramp for UK and EU
  • Circle announces Solana programmable wallets, gas station

Donald Trump has expressed a strong desire for the United States to dominate the remaining Bitcoin mining, arguing that it could be a strategic move to prevent the emergence of a central bank digital currency (CBDC) and bolster the country's energy dominance. In a statement on Truth Social, Trump criticized the current administration's stance on Bitcoin and suggested that the U.S. should capitalize on its remaining unmined Bitcoin to enhance its energy sector. His comments came during a meeting with executives from major U.S. bitcoin mining firms CleanSpark Inc. and Riot Platforms at Mar-a-Lago, highlighting his push for increased domestic mining activities using local resources. 

In other news, Terraform Labs reached a $4.47B civil settlement with the U.S. Securities and Exchange Commission after a jury found the company liable for defrauding investors, who lost approximately $40B when its cryptocurrencies, TerraUSD and Luna, collapsed in 2022. The judgment against Terraform includes over $4B in disgorgement plus interest and a $420M fine. Despite the large sum, most of it may remain unpaid due to Terraform's bankruptcy filing in January. Additionally, Terraform's founder, Do Kwon, faces an $80M civil fine and is banned from engaging in crypto transactions, with significant funds to be transferred to Terraform's bankruptcy estate.

On-Chain

According to an analysis by CryptoQuant, whales took advantage of the recent price correction to accumulate a significant amount of spot BTC. Specifically, more than 20,000 BTC flowed into whale wallets during this period. This indicates that whales perceive the recent correction as a temporary market anomaly that undervalues the cryptocurrency major based on its fundamentals and near-term trajectories.

In another analysis by LookOnChain, OKX has transferred another $552M worth of OKB to its Buy-Back and Burn wallet as part of its routine quarterly operation. To date, OKX has burned a total of 104.32M OKB, equivalent to 35% of the token supply, creating constant buying pressure while increasing the scarcity of the token.

Derivatives

  • Funding rates remained positive for BTC and ETH.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH decreased to 50.32% and 62.66% respectively.
  • The 30-day 25-delta skew (C-P) for BTC decreased to 2.21% while that of ETH remained relatively unchanged at 4.16%.
  • The futures market witnessed $265.63M in liquidations, with longs representing 54.70%.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On

11.57%

BNB

OKX

Bybit

10.74%

BNB

OKX

Binance

10.49%

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.


Before the CPI data release, IV for both 7-day and 30-day options was elevated. However, after the FOMC unanimously decided to leave the benchmark rate unchanged for the seventh consecutive meeting, IV saw a significant decline. This suggests that market uncertainty decreased following the FOMC's decision, which provided clarity and stability regarding interest rate expectations.

The BTC term structure has reverted to contango, with longer-term IVs now higher than short-term IVs. This shift is mainly due to a decrease in IV for short-term tenors of up to 30 days. This pattern indicates market participants anticipate lower near-term volatility and uncertainty while expecting more significant price movements or risks in the longer term.

The BTC skew chart shows declines in both 7-day and 30-day skews, with 7-day maturities at 0.63% and 30-day maturities at 2.21%. This drop in skew occurred notably after the FOMC meeting, likely driven by market disappointment over the absence of a rate cut. This suggests a reduction in demand for downside protection and a potential shift in market sentiment following the FOMC's decision.

Lastly, @Paradigm’s option flows this week emphasizing downside coverage with strategic put purchases. Key BTC trades encompassed the sale of 487x 28-Jun-24 70000 Straddles, the procurement of 213x 27-Sep-24 75000/100000 Call Spreads, and a singular transaction that involved the purchase of 200x 21-Jun-24 75000 Calls. Top ETH trades included the purchase of 1885x 26-Jul-24 3200/4500 Bear Risk Reversals and the sale of 1000x 14-Jun-24 3700 Calls.

Crypto Technical Analysis

Moving on to technical analysis, BTC has experienced heightened volatility in the last 24 hours due to macroeconomic data updates from the US. The initial announcement of below-expected CPI figures drove a swift bullish pump in BTC, which was soon followed by a correction back to nearly the same level after the Fed announced an unchanged interest rate and the potential for only one rate cut this year. Consequently, BTC bounced up again at the $67K support and is currently hovering around the $68K level. These recent movements can be seen as the formation of a horizontal parallel channel, with $67K as the lower boundary acting as support and $71K as the upper boundary acting as the immediate next resistance for any upward movements.

Moving on to ETH, it has experienced similar movements in the last 24 hours. As a result, ETH saw a swift reversal from the $3.47K support and continues to oscillate between the previously identified ranges after the Fed’s announcements. Thus, $3.7K remains the immediate resistance if the price moves further upward, while $3.47K continues to act as the support level.

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