BTC

ETH

S&P 500 Futures

$91,979.75

$3,312.50

$6,040.00

(-2.06%)

 (-3.37%)

(+0.91%)

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

GM 🌳

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October 2024 Market Recap

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Our Daily View

What We Are Covering Today

  • Federal Reserve slows pace to lower interest rates; Israel and Hezbollah reached cease-fire agreement for Lebanon (More in Macro & TradFi)
  • Trump administration pushes CFTC to be the governing body for Crypto; NYSE advances BTC-ETH ETP (More in DeFi & CeFi)
  • Korea Premium Index highlights limited retail participation; Santiment reports surging trading volumes and altcoin activity (More in On-Chain)
  • BTC skews dipped deeper in the negative territory, reaching the lowest point in 30 days (More in Crypto Derivatives)
  • BTC at $92K Support; ETH PA on 1-hour chart signals potential breakout (More in Crypto Technical Analysis)

Macro & TradFi

The Federal Reserve is poised to proceed cautiously with interest rate cuts, emphasizing a gradual approach as the U.S. economy demonstrates unexpected resilience. Minutes from the November meeting reveal that Fed officials no longer feel pressured to rapidly achieve a neutral rate level following a substantial half-point cut in September. At the meeting, the Federal Open Market Committee reduced rates by a quarter-point to 4.5-4.75%, marking the second consecutive cut. While inflation has significantly cooled from its 2022 peak, it remains above the Fed’s 2% target, with the latest consumer price index rising to 2.6%. The Fed is expected to implement another quarter-point cut in December before Donald Trump assumes the presidency. However, officials hinted that rate reductions could pause depending on inflation levels. Treasury yields reflected the market's reaction, with the two-year yield dipping to 4.25% as traders absorbed the meeting’s minutes. Investors remain watchful of incoming data to gauge the Fed’s next steps.

In other news, Israel and Hezbollah have agreed to a 60-day cease-fire following weeks of U.S.-mediated negotiations. The agreement involved Israel withdrawing from southern Lebanon and Hezbollah relocating its weapons north of the Litani River. President Joe Biden and French President Emmanuel Macron pledged to ensure the agreement's enforcement, with Biden expressing hopes that the cease-fire could pave the way for broader regional peace, including initiatives to normalize ties between Israel and Saudi Arabia and advance a two-state solution with Palestine. However, Israel demands the ability to strike Hezbollah in case of violations which raises doubts about the agreement's longevity. The cease-fire has already had economic repercussions, including a drop in oil and gold prices and a strengthening of the Israeli shekel. While the agreement addresses immediate violence, broader regional tensions and the conflict with Hamas in Gaza remain unresolved. 

On Tuesday, the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite recorded gains of 0.57%, 0.28%, and 0.63%, respectively. Large-cap tech stocks fueled the rally, with Microsoft and Amazon rising 2.2% and 3.2%, respectively, while Nvidia, Apple, Alphabet, and Meta Platforms also advanced. Health-related stocks were in focus as Eli Lilly and Novo Nordisk gained 4.6% and 1.5% on news that the Biden administration is proposing expanded Medicare and Medicaid coverage for weight loss drugs. General Motors plunged 9% amid concerns over President-Elect Trump’s plans to impose tariffs on imports from Mexico and Canada. Treasury yields climbed to 4.30%, reversing Monday’s drop, as markets adjusted expectations regarding the Federal Reserve's approach to rate cuts. Investors' focus is now on news regarding the Core PCE Price Index, Personal data, and GDP Growth Rate estimate which is being released this evening at 21:30 SGT. Additionally, the Tokyo CPI data is due this Friday 07:30 SGT. 

DeFi & CeFi

  • Trump team looking to shift crypto regulation to CFTC, dilute SEC's role
  • Ripple pours more money into Fairshake PAC
  • NYSE files to list Bitwise’s Bitcoin and Ethereum mixed ETP
  • Uniswap Labs offers bug bounty worth up to $15.5 million
  • Kraken to close NFT marketplace, shift focus to other projects

The Trump administration reportedly plans to shift significant regulatory authority over cryptocurrencies from the SEC to the CFTC, particularly for assets like bitcoin and ether deemed commodities, according to Fox Business. This move would empower the CFTC to oversee crypto exchanges and spot markets, reducing the SEC's influence over the industry. Outgoing SEC Chair Gary Gensler, who previously supported this approach for bitcoin, has announced his resignation effective January 20, 2025, aligning with President-elect Trump’s inauguration. Trump's pro-crypto agenda includes establishing a federal bitcoin reserve, appointing a dedicated crypto advisor to the White House, and promoting a more industry-friendly regulatory framework, signaling a pivot in U.S. crypto policy.

Elsewhere, NYSE Arca has filed a 19b-4 Form to list Bitwise’s new exchange-traded product (ETP), which provides spot exposure to Bitcoin (BTC) and Ethereum (ETH), weighted by market capitalization. The ETP simplifies portfolio management by adjusting to the evolving dominance of BTC and ETH. Bitwise CIO Matt Hougan emphasized that the product aims to balance exposure to these complementary assets, likening their coexistence to gold and tech stocks. If approved, this will be the first dual-asset crypto ETP in the U.S., adding to Bitwise's $4.2 billion in assets under management. However, competition remains as other firms, such as Franklin Templeton and Hashdex, have similar products awaiting regulatory approval. With BTC and ETH collectively dominating over $2.1 trillion in market cap, the ETP caters to distinct use cases: Bitcoin as a secure digital store of value and Ethereum as the backbone of decentralized applications.

On-Chain

In an on-chain analysis by CryptoQuant, Bitcoin's recent rally to $94.3K has occurred without significant retail participation, as indicated by the Korea Premium Index remaining below -0.5. Historically, spikes in this index, driven by retail speculation, have preceded Bitcoin's price peaks. The current divergence suggests the rally may lack speculative retail momentum.

Meanwhile, Santiment reports that in November, on-chain crypto trading surged significantly, with Bitcoin reaching trading volume levels unseen since May 2021, peaking at 154.92 billion BTC on November 12th. Total trading volume continued to climb, growing by 32% in the last week alone. Onchain trading reflects heightened activity, as traders rapidly shift profits from Bitcoin’s recent highs into speculative altcoins, driving further market volatility and liquidity.

Derivatives

  • The funding rate for BTC and ETH remained positive.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH dipped to 61.21 and 73.38, respectively.
  • The 30-day 25-delta skew (C-P) for BTC and ETH declined rapidly to 0.59 and 4.87, respectively.
  • The futures market witnessed $473.95M in liquidations, with longs representing 76.38%.

Net Annualized APR

Perp (USDT pair)

Long on

Short On

22.80%

BTC

Bybit

OKX

11.92%

BTC

Bybit

Binance

10.87%

BTC

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 ATM IV has remained relatively flat amidst ongoing selling pressure. Despite an initial drop in IV, it quickly rebounded as traders adjusted their positions and hedged against the price movements of the underlying asset.

BTC's backwardation remains prominent, with contracts up to the 7-day tenor showing higher IV than the rest of the curve. The peak IV continues to be at the 2-day expiry, coinciding with the end of the month. However, the entire curve has experienced a significant parallel shift downward, with longer-dated contracts reverting to a contango shape.

Bitcoin's skew continued to decline, with the 30-day skew dropping to near zero and the 7-day skew reaching -3.94. Throughout the day, the skew fell to a low of -6.49, significantly lower than the previous 30-day low of -1.14. The negative skew indicates an increasingly cautious stance on BTC's short-term performance, with market participants hedging against potential downside risks.

Crypto Technical Analysis

Zooming into the 1-hour chart, BTC's price has fallen to test the key support level around the $92K mark. A sustained break below this level could see BTC revisiting the next support at $88.6K. Resistance is visible at $94.7K, aligning with the upper Bollinger Band. The Bollinger Bands show narrowing, signalling reduced volatility and the potential for a breakout. Currently, the RSI sits at 39.17, indicating that selling pressure continues to dominate, but BTC is approaching oversold conditions, hinting at a potential short-term reversal.

On the 1-hour chart, ETH's price has dropped to test the support level of $3.3K. If the bearish momentum persists and ETH breaches this level, the next support lies at $3.26K, representing a further potential downside. On the upside, the immediate resistance is at $3.38K, aligning with the upper Bollinger Band and marking a key level for any recovery attempts. The Bollinger Bands are tightening, indicating reduced volatility and a possible breakout in either direction. The RSI is at 40.38, showing ETH is nearing oversold territory, which could lead to a short-term bounce if buying pressure emerges.

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TRHX Research (Formerly Treehouse Research) 🌳