BTC

ETH

S&P 500 Futures

$62,554.00

$2,437.25

$5,752.00

(-1.91%)

 (-2.07%)

(-0.78%)

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

GM 🌳

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September 2024 Market Recap

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Our Daily View

What We Are Covering Today

  • Goldman Sachs upgrades its Chinese stocks outlook; Oil price surges again in fear of Israel’s potential strike on Iran again (More in Macro & TradFi)
  • FTX’s bankruptcy plan was approved by the court to repay in cash with interests; EIP-7781 was proposed to reduce block time with larger blob size (More in DeFi & CeFi)
  • Short-term Bitcoin holders may panic-sell; Scam uncovered in April 2024 leads to theft recovery (More in On-Chain)
  • BTC's implied volatility indicates reduced short-term uncertainty; BTC 25-delta skews increases (More in Crypto Derivatives)
  • BTC shows signs of recovery after testing support at 62K; ETH builds momentum with ascending trendline (More in Crypto Technical Analysis)

Macro & TradFi

Goldman Sachs has upgraded its outlook on Chinese stocks to "overweight", predicting that equities could rise another 15%-20% if the Chinese government successfully implements its recent stimulus measures. Analysts, including Tim Moe, noted that current valuations are still below historical averages and earnings are expected to improve, with global investors remaining underexposed to Chinese equities. The positive sentiment follows a significant 27% rally in the CSI 300 Index since its September low, attributed to Beijing's aggressive stimulus efforts. Goldman has adjusted its targets for the MSCI China Index and the CSI 300 Index to 84 and 4,600, respectively, indicating a potential total return of 15%-18%. However, the firm also cautioned about risks, including the possibility of weaker fiscal stimulus, profit-taking, and external factors like the U.S. elections and tariffs.

Elsewhere, U.S. crude oil prices surged over 3% on Monday, closing above $77 per barrel amid rising concerns that Israel may strike Iran in response to recent tensions. Analysts worry that such an attack could disrupt oil supplies, particularly through the critical Strait of Hormuz, which is a key choke point for global oil exports. West Texas Intermediate crude increased by $2.76, while Brent crude rose by $2.88, marking significant weekly gains for both benchmarks. President Biden has cautioned against strikes on Iranian oil facilities, and the market remains in a cautious "watch-and-wait" mode, with the potential for further escalation in the region posing a risk to oil supply stability.

Lastly, the S&P 500 fell by 1% as rising crude oil prices and strong jobs data dampened expectations for interest rate cuts. The Dow decreased by 0.9%, and the Nasdaq dropped 1.2%. Concerns over Hurricane Milton, which is expected to impact Florida's Gulf Coast, led to significant losses in insurance stocks, with Everest Group plunging 8.5% and Arch Capital Group down 6.2%. In contrast, Super Micro Computer saw a substantial gain of 15.8% due to strong demand for its AI-related graphics processing units. Other notable movers included Air Products and Chemicals, which rose 9.5% following an activist investment, and Generac Holdings, up 8.5% as the hurricane approached. Meanwhile, shares of Vistra fell 5.2%, marking a reversal after a period of record highs.

DeFi & CeFi

  • FTX bankruptcy plan approved by the court
  • New EIP-7781 was proposed to further scale Ethereum
  • Trump sees the highest Polymarket odds since Harris was nominated
  • Copper’s CEO Dmitry Tokarev plans to step down
  • National Bank of Bahrain rolls out its first Bitcoin investment fund

Defunct crypto exchange FTX has received court approval for its bankruptcy plan, allowing it to repay customers in cash, with interest, from up to $16.5 billion in recovered assets. U.S. Bankruptcy Judge John Dorsey approved the plan, which prioritizes FTX customers and includes settlements with over 200 jurisdictions. Approximately 98% of customers will receive nearly 119% of their account value as of November 2022, with repayments starting within 60 days of the plan’s implementation. Notably, the repayments will be in cash rather than crypto. FTX CEO John J. Ray III emphasized that the approval marks a significant milestone in recovering lost assets and ensuring customers are compensated.

Meanwhile, a new Ethereum Improvement Proposal (EIP-7781) was proposed, aiming to enhance the network's throughput by 50% by reducing block times from twelve seconds to eight seconds. This change, submitted by Ben Adams of Illyriad Games, seeks to increase Ethereum's competitiveness against faster blockchains like Solana. Additionally, EIP-7781 would increase the capacity for data-storage "blobs" per block from six to nine, benefiting layer-2 networks such as Arbitrum and Optimism by providing them more space to post transaction data. The proposal has gained support from key figures in the Ethereum community, including Ethereum co-founder Vitalik Buterin, and is seen as a crucial step toward addressing criticisms regarding Ethereum's scalability. However, the upgrade could place additional demands on validators, who may require more resources to accommodate the increased throughput.

On-Chain

According to IT Tech on CryptoQuant, short-term Bitcoin holders ("weak hands") tend to panic-sell during price declines, often realizing losses in the process. This behavior is illustrated by rising purple bars on charts that track short-term holder (STH) sell-offs. As these holders exit, their BTC typically transfers to long-term investors ("strong hands"), which can help stabilize the market. The overall supply held by STHs has decreased following major sell-offs, reducing selling pressure. The weak hands to strong hands dynamic may signal a potential price floor, providing opportunities for accumulation and helping to identify market bottoms.

In other news, on-chain investigator ZachXBT revealed that in April 2024, an elderly U.S. victim was scammed by individuals posing as Coinbase support, leading to a significant theft of their life savings. ZachXBT assisted in recovering $275K of the stolen funds, which will be returned to the victim. In his investigation, he uncovered that this scam group had stolen over $5 million from other victims. The stolen assets were laundered through centralized exchanges by converting Ethereum and Bitcoin to Tron, before transferring stablecoins to over-the-counter (OTC) platforms.

Derivatives

  • Funding rate for BTC turned negative on some major exchanges while ETH remained positive. 
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH declined to 53.71% and 60.37% respectively.
  • The 30-day 25-delta skew (C-P) for BTC increased slightly to 0.56 while ETH decreased to -1.17.
  • The futures market witnessed $214.56M in liquidations in the last 24 hours, with longs representing 65.67%.

Net Annualized APR

Perp (USDT pair)

Long on

Short On

45.69%

BTC

Binance

dYdX

43.26%

BTC

Bybit

dYdX

38.70%

BTC

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.

BTC’s 7-day and 30-day ATM implied volatility declined slightly to 43.78 and 53.71, respectively. The leveling off of 7-day implied volatility indicates reduced short-term uncertainty, suggesting that the market has absorbed immediate concerns. 30-day volatility remains elevated, indicating that option traders are more cautious about longer term price fluctuations than immediate ones.

BTC’s term structure maintained a contango structure with volatilities decreasing across the curve, indicating that there is more certainty in the market. This suggests traders are positioning toward a flat spot market for BTC, possibly due to the range bound movement of BTC over the past 2 weeks, which traders are possibly expecting to continue.

BTC’s 7-day and 30-day 25-delta skew constant maturity increased sharply over the past day but remained below 0 for 7-day skews at -0.14, while the 30-day call-put skew remains positive at 0.56. The recent upward trend indicates a shift toward a more balanced sentiment in the short term with a reduction in short-term bearish sentiment. While traders still exhibit a preference for puts over calls, the increased demand for calls signals that traders anticipate a potential near-term stabilization. The 30-day skews indicate that traders are still bullish over the medium term for BTC.

Lastly, @Paradigm highlighted a trading session consisting of mixed strategies. Key BTC trades encompassed the purchase of a 300x 25-Oct-24 $70K Call, and the sale of 230x 18-Oct-24 $58K/$67K Strangle and 200x 25-Oct-24 $77K / 29-Nov-24 $80K Call Calendar. For ETH, the notable trades included the purchase of a 5,500x 25-Oct-24 $2.5K Call, the sale of 6000x 29-Nov-24 $2.9K Straddle and 2500x 25-Oct-24 $2.2K Put.

Crypto Technical Analysis

Moving on to Technical Analysis, BTC briefly touched the support at 62K before showing a slight recovery, now trading around 62.6K. The price action suggests a potential rebound, though it remains below the resistance level at 64.2K. Should BTC break through this resistance, the next key level to watch is 66K, which would represent a further rise of approximately 5.4% from the current price. Conversely, if it fails to hold the 62K level, the next support lies at 59.6K. 

On the other hand, ETH is forming an ascending trendline, with higher lows, signaling a gradual buildup of bullish momentum. The price is currently trading at 2.44K, just below the resistance level at 2.52K. If this upward trend continues and ETH breaks through this resistance, the next target would be the 2.71K level, representing a potential rise of approximately 11% from current levels. Conversely, immediate support can be found at the 2.32K level, where the ascending trendline aligns with horizontal support. The RSI is sitting at 51.55, indicating neutral momentum with no clear overbought or oversold signals, though the slight uptrend in RSI hints at potential strength in the short term.

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TRHX Research (Formerly Treehouse Research) 🌳