BTC

ETH

S&P 500 Futures

$95,826.50

$3,636.75

$6,061.00

(-1.68%)

 (-1.79%)

(+0.27%)

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

GM 🌳

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November 2024 Market Recap

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Our Daily View

What We Are Covering Today

  • US Governor Expressed Concerns Over US Inflation Controls Losing Momentum; US imposes export controls on China’s chip industry  (More in Macro & TradFi)
  • WisdomTree officially files S-1 for spot XRP ETF; Potential staking for ETH ETFs under crypto-friendly leadership (More in DeFi & CeFi)
  • Stablecoin reserves on Binance reach ATH of $28B; XRP achieves ATH as non-empty wallet count surges and current holders continue accumulating (More in On-Chain)
  • BTC sees a large divergence in 7-day and 30-day skew, potentially implying a reversal in the upcoming days (More in Crypto Derivatives)
  • Both BTC and ETH meet their respective support levels, potentially looking at a reversal in momentum  (More in Crypto Technical Analysis)

Macro & TradFi

Federal Reserve Governor Christopher Waller expressed cautious support for a December interest rate cut, signaling continued easing amid concerns that progress on inflation might be stalling. While still-elevated borrowing costs are dampening demand and helping ease price pressures, Waller warned that signs of persistent inflation in the services sector could complicate the Fed's path to its 2% target. The broader Federal Open Market Committee appears aligned on a gradual approach to rate reductions, with New York Fed President John Williams noting uneven progress toward the inflation target. Markets responded to Waller's remarks, with the implied odds of a December rate cut rising to 75%, and the US dollar paring earlier gains. Policymakers await critical labor market and inflation reports ahead of the December 17-18 meeting, which will determine whether the Fed proceeds with a quarter-point cut, marking the third consecutive reduction this year. A December rate cut would lower the federal funds rate to a target range of 4.25% to 4.5%, bringing the Fed closer to a "neutral" monetary policy stance.

In other news, the US has introduced sweeping export controls to hinder China's development of advanced semiconductor manufacturing and AI technologies, citing national security concerns. The new restrictions target the export of 24 critical chipmaking tools and high-bandwidth memory (HBM) used in AI chips while expanding the "entity list" to include 140 Chinese companies, such as Huawei and Semiconductor Manufacturing International Corporation (SMIC). These controls extend to non-US firms using American technology under the Foreign Direct Product Rule (FDPR), tightening global compliance requirements. While allies like Japan and the Netherlands were granted exemptions following agreements to impose similar restrictions, South Korea has not yet secured a waiver. The move has elicited sharp criticism from China, with Beijing promising "resolute measures" in response. Meanwhile, shares of major US chipmaking tool manufacturers, including Lam Research and Applied Materials, surged on the news, suggesting that industry lobbying may have influenced the less aggressive approach in certain areas. While the controls aim to stifle China's semiconductor ambitions, the potential loopholes and logistical challenges in implementing such complex rules raise questions about their long-term efficacy.

On Monday, U.S. stocks continued their upward momentum, with the S&P 500 and Nasdaq Composite rising 0.24% and 0.97%, respectively, while the Dow Jones Industrial Average slipped 0.29%. Large-cap technology stocks led the market, with Tesla up 3.5% on price target upgrades, and Meta Platforms and Broadcom gaining 3.2% and 2.7%, respectively. Other tech giants, including Nvidia, Apple, Microsoft, Amazon, and Alphabet, also advanced, lifting the VanEck Semiconductor ETF (SMH) by 2.4%. Super Micro Computer (SMCI) was the standout performer, surging 29% after announcing that an independent review found no evidence of financial misconduct. Elsewhere, Stellantis dropped 6.5% following the resignation of CEO Carlos Tavares. Treasury yields were stable, with the 10-year yield at 4.19%, as investors awaited labor market data, including JOLTs job opening news tonight at 23:00 SGT, and Non-Farm Payrolls and Unemployment Rate data on December 6 at 21:30 SGT. 

DeFi & CeFi

  • WisdomTree officially files S-1 for spot XRP ETF
  • Potential staking for ETH ETFs under crypto-friendly leadership
  • Coinbase integrates Apple Pay to Coinbase Onramp
  • Nike-owned NFT wearables RTFKT to sunset in January
  • PowerDime to launch a tokenized renewable energy platform with Chintai
  • MicroStrategy purchased $1.5B in Bitcoin last week

WisdomTree, a pioneer in the U.S. exchange-traded fund (ETF) market, has filed to launch a spot XRP ETF, becoming the fourth company to submit such a filing with the U.S. Securities and Exchange Commission (SEC). The WisdomTree XRP Fund aims to offer investors direct exposure to XRP through shares listed on the Cboe BZX Exchange. If approved, the ETF will use a cash-create method for share creation and redemption, with the possibility of an in-kind model pending further approvals. WisdomTree has partnered with Coinbase affiliates for the XRP custodian and prime execution agent roles. The filing for the spot XRP ETF positions WisdomTree alongside other firms, including Bitwise, Canary Capital, and 21Shares, all of which have filed for similar products. This move highlights growing institutional interest in XRP products and further strengthens the position of spot cryptocurrency ETFs in the U.S. market.

Elsewhere, U.S. Ethereum exchange-traded funds (ETFs) may soon include staking yield, according to a December 2 report by Bernstein Research, which suggests that under a crypto-friendly U.S. Securities and Exchange Commission (SEC), staking yield for ETH could be approved. Staking ETH involves locking the cryptocurrency as collateral with a validator on the Ethereum blockchain, earning rewards, but also facing the risk of "slashing" if the validator misbehaves. The report highlights that while the SEC authorized spot Ethereum ETFs in July 2024, they prohibited staking for additional yield. However, with the potential of a more crypto-friendly SEC under President-elect Donald Trump, who has promised to foster a pro-crypto environment, staking yield approval could happen sooner than expected.

On-Chain

An on-chain analysis by @JA_Maartun on CryptoQuant highlighted the ERC-20 stablecoin reserves on Binance reaching an all-time high of $28B in 2024, marking a 300% recovery from a low of $7B in 2023. This surge underscores Binance’s role as the largest liquidity hub for crypto, attracting traders and institutions for transactions and storage. The rising reserves reflect renewed market confidence and heightened trading activity, signaling robust liquidity in the ecosystem. This is a bullish indicator for the broader crypto market with a large inflow of liquidity in the digital asset ecosystem.

According to an analysis by Santiment, XRP has surged to $2.49, its highest market value since January 2018, marking a nearly seven-year high. Over the past three weeks, wallets holding 1M-10M XRP have accumulated a staggering 679.1M tokens, worth approximately $1.66B. This significant accumulation aligns with a milestone for XRP, as the total number of non-empty wallets has surpassed 5.5B for the first time in its 8+ year history. The combination of whale accumulation and expanding wallet activity underscores strong market demand and growing interest in XRP.

Derivatives

  • The funding rate for BTC and ETH remained positive.
  • Deribit Implied Volatility Index (DVOL) for BTC remained flat at 56.16 while that of ETH dropped to 70.56.
  • The 30-day 25-delta skew (C-P) for BTC rose to 4.66 while that of ETH declined to 4.64.
  • The futures market witnessed $615.24M in liquidations over the weekend, with longs representing 69.53%.

Net Annualized APR

Perp (USDT pair)

Long on

Short On

40.07%

ADA

Bybit

OKX

28.26%

SOL

Binance

OKX

24.52%

SOL

Bybit

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.

BTC's at-the-money IV for 30-day contracts has remained relatively stable at 54.07, with the 7-day IV converging to a similar level. This indicates that volatility expectations for the upcoming week and month are stable, suggesting anticipation of smaller price movements toward the end of the year, likely due to the holiday season.

BTC's term structure remains in a contango shape but has experienced a parallel shift downward across various tenors. This shift is likely due to the reduced trading volume in the options market, particularly as the year draws to a close.

BTC has seen further divergence in the 7-day and 30-day C-P skew, currently at 0.94 and 4.66, respectively. This suggests that traders are turning bearish on BTC in the immediate week ahead, while expecting the price to normalize by the end of the month, implying a potential reversal in momentum in the coming days.

Lastly, @Paradigm highlighted a session consisting of a mix of strategies implemented. For BTC, notable flows included the purchase of 575x 13-Dec-24 $95K/$855K Put Spreads and 400x 27-Dec-24 $180K Calls, and the sale of 375x 27-Dec-24 $120K Call. On the ETH side, significant flows featured the sale of 6000x 20-Dec-24 $3700/$3900 Call Spread and 4400x 20-Dec-24 $3700/$4000 Call Spread.

Crypto Technical Analysis

BTC moved slightly lower, approaching the previously identified support level at $95K. This level serves as a key support zone, as it intersects with the horizontal support, the lower trendline since early November, and both the 50-period and 100-period SMAs. If this level fails to hold, BTC will likely retrace to the $91K to $91.5K range, marking the local low. Meanwhile, the $99K resistance level continues to act as the main barrier if the price reverses, and a breakout above this level would signal a new all-time high for BTC.

ETH has seen similar price movements with a slight decline in the last 24 hours. Consequently, ETH has moved towards the lower boundary of the previously identified ascending channel which serves as the immediate support. However, if the price reverses in trend, it will likely test the upper boundary of the channel near $3.9K, indicating a 7.5% potential upside.

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By TRHX Research

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TRHX Research (Formerly Treehouse Research) 🌳