BTC

ETH

S&P Futures 500

$25,719.75

$1,609.75

$4,463.25

(-2.58%)

 (-2.82%)

(+0.20%)

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


GM Treehouser 🌳

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Our Daily View

What We Are Covering Today

  • G-20 softens stance on Ukraine; US-Vietnam partnership counters Beijing's dominance (more in Macro & TradFi)
  • Vitalik Buterin’s X account hacked, leading to $691K drained from victims’ wallets; G20 moves forward with international crypto framework (more in DeFi & CeFi)
  • ETH MVRV oscillator remains in bearish territory; BUSD circulating market cap falls below $2.6B (more in On-Chain)
  • BTC's implied volatility surges ahead of Core Inflation release; term structure in contango (more in Crypto Derivatives)
  • BTC maintains descending channel; ETH tests key resistance (Crypto Technical Analysis)

Macro & TradFi

At the recent G-20 summit in New Delhi, member nations unanimously supported a declaration that highlighted the economic repercussions of the Ukraine war, with notably softer language compared to last year's stance on Russia's actions. Amid deepening global rifts, India brokered consensus, emphasizing its neutral stance in the Russia-Ukraine conflict due to historical ties with Moscow. In a strategic move, the summit also witnessed the unveiling of a U.S.-backed transit corridor plan linking Europe, the Middle East, and Asia to counterbalance China's increasing international infrastructure dominance. The softened G-20 language on Ukraine showcases the shifting geopolitical dynamics and the challenges in achieving unanimous condemnation.

Elsewhere, during President Joe Biden's recent visit to Hanoi, the US and Vietnam bolstered their ties by establishing a "comprehensive strategic partnership," symbolizing a significant geopolitical shift aimed at counterbalancing Beijing's growing assertiveness. Historically, this elevated status in Vietnam's bilateral ties hierarchy was reserved for major powers, including China and Russia. The move is not only reflective of Vietnam's intent to diversify its alliances in light of China's increasing dominance in the South China Sea but also aligns with the US's strategy to fortify its influence in the Indo-Pacific region. Additionally, the agreement paves the way for strengthening economic cooperation, particularly in crucial industries like semiconductors. The US-Vietnam strengthened alliance signals a calculated geopolitical maneuver in the Indo-Pacific and emphasized the strategic economic significance of Vietnam in the global supply chain.

On Friday, the US stock market witnessed modest gains, with the DJIA, S&P 500, and NASDAQ climbing 0.22%, 0.14%, and 0.09%, respectively. Brent crude surged by 0.8% to close at $90.65 per barrel - its peak since November - while West Texas Intermediate increased 0.7% to settle at $87.51. Europe's Stoxx 600 Energy index closed 0.4% higher, marking its zenith since March. Traders are poised for the closely watched US inflation report due next week, where higher commodity prices could push up the headline figure and trickle into other categories. Economists project a decrease in the US August Consumer Price Index (CPI) inflation to 7% from July's 15-month pinnacle of 7.44%.

DeFi & CeFi

  • Vitalik Buterin’s X account hacked, leading to $691K drained from victims’ wallets
  • G-20 moves forward with international crypto framework
  • FTX estate sues LayerZero Labs to recover $86M transferred on eve of bankruptcy
  • Key crypto industry figures see promise in Privacy Pools proposal
  • Starknet transaction volume surpassed Arbitrum, ranking 2nd among all Layer 2

Ethereum co-founder Vitalik Buterin had his X account compromised, leading to $691K being drained from victims’ wallets in a phishing incident, according to blockchain investigator ZachXBT. Ethereum developer Bok Khoo, also known as Bokky Poobah, claimed he suffered losses in his CryptoPunk NFT collection, the most valuable of which was CryptoPunk #3983 worth 153.62 ETH, approximately $240,543. The hacker used Vitalik’s account to promote a commemorative NFT and shared a malicious link, which victims connected to and subsequently lost their funds. This seems to have been perpetrated using PinkDrainer software, which has been responsible for other major hacking incidents this year, including Steve Aoki’s X account and Orbiter Finance’s Discord servers. Most of the stolen NFTs have been sold, while much of the funds remain in the hacker’s wallet. Users suggested that Vitalik is responsible for failing to ensure the security of his account, while others have defended him, arguing that high-profile individuals are often targets of frequent and sophisticated hacking attempts, including insider threats.

G-20 leaders are urging the speedy implementation of a cross-border framework for crypto assets, at a summit in New Delhi. Known as the Crypto-Asset Reporting Framework (CARF), it is expected to facilitate information exchange between countries starting in 2027. It involves automatic annual information exchange on crypto transactions between jurisdictions, covering transactions on unregulated crypto exchanges and wallet providers. Countries affected by this framework include Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the United States, and the European Union. Currently, many countries have already implemented disclosure standards for crypto transactions, with the European Union approving updated rules in May. These entail requirements like the disclosure of beneficiary names, their distributed ledger addresses, and account names for digital asset transfers. G-20 leaders are also in support of recommendations by the Financial Stability Board, which suggests aligning standards for stablecoins with commercial banks and the prohibition of activities that involve the identification of participants.

On-Chain

Transitioning to on-chain analysis, we observe the MVRV oscillator on ETH, commonly referred to as the Market Value to Realized Value Oscillator, currently residing within a bearish phase, evident by the red region it occupies. Notably, this oscillator has sustained its bearish posture for a duration surpassing one month, a precedent that has historically foreshadowed downward price movements. The MVRV oscillator's computation involves the ratio between MVRV and its 180-day moving average, which has proven instrumental in signaling pivotal shifts during prior market cycles.

In other news, the aggregate market cap of stablecoins has been gradually diminishing since the start of April this year. Notably, the decline in the aggregate stablecoin supply is primarily driven by the mass exodus of USDC and BUSD. A closer look at BUSD’s circulating market capitalization shows that it has dipped below the $2.6B mark as the stablecoin is slated for phasing out by next year. As a result, Binance has actively advocated for several alternatives such as First Digital USD (FDUSD) and Justin Sun's True USD (TUSD) which saw its circulating market capitalizations swell to $3.18B, eclipsing Binance's BUSD in the process.

Crypto Derivatives

  • Funding rate flipped to negative on BTC while it remains positive on ETH.
  • Deribit Implied Volatility Index (DVOL) for BTC steadied at 41.16%, while it fell to 34.60% for ETH.
  • 30-day 25-delta skew (C-P) rose sharply on both BTC and ETH to -3.90% and -3.87%, respectively.
  • The futures market witnessed $77.83M worth of liquidations in the last 24 hours, with shorts representing 82.44% of the total.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On

21.16%

BNB

Bybit

Binance

10.21%

ETH

dYdX

OKX

9.66%

SOL

OKX

Bybit

Source: @CexyArbBot Telegram Bot

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 experienced a surge in its 7-day implied volatility over the weekend, peaking at 35.17%. This may potentially be due to Senior Federal Reserve officials signaling in recent days that the central bank would hold rates steady at its September meeting.

Looking at the term structure of BTC, implied volatility increased in the near term while showing a significant increase across all tenors, which may be caused by anticipation for the US core inflation rate release in midweek, which would significantly influence the Fed’s interest rate decision in the long run. In general, the structure continues to exhibit a contango shape.

Elsewhere, the 30-day (call-put) skew on BTC fell to -3.90%, This change can be partly attributed to the bearish outlook of BTC investors.

Lastly, @Paradigm reported a significant mix of hedging and speculative strategies this week. Notable BTC trades featured a 900x 29-Dec-23 $20K put purchase, and a strategic 350x 15-Sep-23 $25.5K/$27.5K strangle sale. On the ETH front, the activity leaned more towards hedging with the acquisition of a significant 10,000x 29-Dec-23 $1.4K put and a complex 5,500x 29-Sep-23 $1.5K / 24-Nov-23 $1.4K put calendar sale.

Crypto Technical Analysis

Moving on to Technical Analysis, in BTC's daily chart, BTC experienced a discreet 0.5% depreciation yesterday, reaching lower lows after failing to break the upper channel boundary late last week. Currently, BTC is testing crucial support at around the $25.8K mark, with a notable upper resistance still standing firm at $28K. Should this lower resistance level be breached, BTC could possibly tumble down to its next significant support level at $21.1K, marking an 18.14% decline from its current price. The RSI has also descended to 41.9, positioning itself towards the undersold selling range, and the daily chart has remained consistent with the descending channel identified late last week, characterized by successive lower highs and lows.

Meanwhile, ETH saw a 1.3% depreciation over the last 24 hours, lowering its value to $1.6K. This is a crucial level for ETH, where if this support falters, ETH could move lower to the next support of $1.47K, representing an 8.52% fall from current trading prices. The RSI now also sits at 30.2, verging on undersold conditions. In conjunction, trading prices also continue to test the lower boundary of the descending triangle pattern observed last week.

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Treehouse Research 🌳