BTC

ETH

S&P 500 Futures

$61,012.00

$2,462.00

$5,755.75

(-3.96%)

 (-6.03%)

(-0.99%)

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

  • U.S. economy hits a hurdle as dockworkers strike; Iran launches missiles at Israel, escalating tensions (More in Macro & TradFi)
  • Bitwise Files for XRP ETF; Hashdex and Franklin Templeton Pursue Crypto Index ETFs (More in DeFi & CeFi)
  • Decline in Bitcoin and Ethereum active addresses; AAVE V3 surpasses $10B TVL (More in On-Chain)
  • Bitcoin's implied volatility has spiked amid Middle East tensions; short-term bearish sentiment drives increased demand for puts (More in Crypto Derivatives)
  • Both BTC and ETH experienced sharp declines following the macroeconomic impact of Iran’s attack (More in Crypto Technical Analysis)

Macro & TradFi

The U.S. faces a potential economic crisis as dockworkers from the International Longshoremen’s Association (ILA) launched their first strike in five decades, halting operations at ports along the East and Gulf coasts. The dispute affects 25,000 workers and 36 ports handling 25% of the nation’s international trade, focusing on wage increases and protections against automation. It is estimated that the strike could cost the U.S. economy up to $5B a day, causing disruptions to essential imports like food, pharmaceuticals, and consumer goods. If the strike extends beyond a week, it could lead to significant supply chain issues, especially in food and automobile sectors. The strike adds to existing global supply chain pressures, including the Panama Canal's drought-induced slowdown and instability in the Red Sea.

In other news, Iran launched more than 180 missiles toward Israel in a significant escalation of tensions, further heightening fears of an all-out regional conflict. While most missiles were intercepted with U.S. assistance, some reached targets, injuring two people. The large-scale missile attack by Iran on Israel, along with escalating regional tensions, poses significant risks to the broader macroeconomic landscape, particularly in terms of global stability and trade. With Israel and the U.S. vowing retaliation, concerns are growing over the potential for a broader Middle Eastern conflict, which could disrupt global supply chains, especially in sectors such as energy and commodities. Heightened instability in the region could lead to fluctuations in oil prices, impacting inflation rates and economic growth globally. Furthermore, uncertainty surrounding the conflict may weigh on investor sentiment, leading to volatility in global financial markets. As the conflict broadens, the potential for economic slowdowns or trade disruptions in the region could exacerbate existing economic pressures, particularly in emerging markets tied to the Middle East.

Lastly, on Tuesday, major U.S. stock indexes retreated from record highs as technology stocks tumbled and crude oil prices surged due to escalating tensions in the Middle East. The Dow Jones Industrial Average fell 0.4%, while the S&P 500 dropped 0.9%, and the Nasdaq Composite slid 1.5%. Nvidia fell 3.7%, while Apple dropped 2.9% amid concerns about weaker-than-expected iPhone 16 demand. Other tech companies like Microsoft and Amazon also slipped, while Meta Platforms and Alphabet posted modest gains. Chipmakers were hit particularly hard, with the VanEck Semiconductor ETF dropping 2.7%, and Intel, Broadcom, and Micron all declining. Crude oil futures surged as much as 5% due to reports of Iran firing missiles into Israel, before settling at a 3.5% gain. This lifted energy stocks, with Marathon Oil, ConocoPhillips, Occidental Petroleum, and Halliburton all rising. Moving forward, the key events that investors will be looking out for would be the US September ADP employment data on 2 October, the September unemployment rate, and seasonally adjusted non-farm payrolls on 4 October.

DeFi & CeFi

  • Bitwise files for XRP ETF
  • Hashdex pursues crypto ETF
  • EigenLayer’s token unlock approaches with the market predicting a $6.8B FDV
  • Coinbase to add proof of reserves to Bitcoin wrapper cbBTC
  • Kasikornbank launches the first licensed Thai digital asset custodian 
  • Australian bank joins Project Guardian to explore RWA tokenization
  • Crypto exchange Gemini to close all customer accounts in Canada

Bitwise has filed an application for an XRP exchange-traded fund (ETF) in Delaware, which could potentially bring institutional investment into XRP through a regulated product. The application was confirmed by Bitwise and listed CSC Delaware Trust Company as its registered agent. However, this filing does not immediately imply an SEC submission, as formal filings may take time. The move follows Ripple CEO Brad Garlinghouse’s prediction of an inevitable XRP ETF, and comes amid ongoing legal battles between Ripple and the SEC over XRP's classification as a security. A ruling in 2023 provided a partial victory for Ripple, but the case is still in progress, with both parties requesting a stay pending an SEC appeal.

Elsewhere, asset manager Hashdex has submitted an amended registration filing for its proposed cryptocurrency exchange-traded fund (ETF), the Hashdex Nasdaq Crypto Index US ETF, as part of its ongoing efforts with the U.S. Securities and Exchange Commission (SEC). This ETF aims to serve as a one-stop-shop cryptocurrency portfolio, initially including Bitcoin and Ether—the only assets currently permitted in the Nasdaq Crypto US Index—while potentially expanding to encompass additional digital currencies in the future. Franklin Templeton is also pursuing a similar crypto index ETF, which will track the CF Institutional Digital Asset Index, currently limited to BTC and ETH due to SEC authorization constraints. The interest in crypto ETFs is evident, as total assets in U.S. ETFs surpassed $10T on September 27, aided by over $20B in inflows into cryptocurrency ETFs in 2024, and this filing signals progress toward a possible spot cryptocurrency index ETF listing in the US.

On-Chain

According to an on-chain analysis by CryptoQuant, the number of active Bitcoin and Ethereum addresses has steadily declined since the beginning of 2024. Bitcoin addresses dropped from 1.17M to 855K, while Ethereum fell from 382K to 312K, indicating reduced retail investor activity. Despite expectations of increased participation following the Fed's first rate cut, the market has not seen the anticipated rally, largely due to the Federal Reserve's continued quantitative tightening. Although there are slight increases in the M2 money supply, suggesting potential future liquidity injections, new investors have not yet entered the crypto space. The analysis suggests that once the Fed shifts back to quantitative easing, the market may experience the long-awaited influx of new participants and a rise in active addresses.

According to a report by The Block, AAVE V3 has surpassed $10 billion in total value locked (TVL) on Ethereum as of September 28, 2024, representing a 197% increase from $3.36 billion at the start of the year. This growth reflects a broader resurgence in decentralized finance (DeFi), with the GMDEFI Index showing a 31.67% rise in DeFi coin performance over just three weeks.

Derivatives

  • Funding rates for both BTC and ETH remained positive. 
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH has climbed to 57.09% and 65.45% respectively.
  • The 30-day 25-delta skew (C-P) for BTC dropped to 0.21 while ETH dropped to -0.01.
  • The futures market witnessed $522.42M in liquidations in the last 24 hours, with longs representing 86.06%.

Net Annualized APR

Perp (USDT pair)

Long on

Short On

19.18%

AVAX

Binance

dYdX

18.92%

AVAX

OKX

dYdX

15.78%

BNB

OKX

Bybit

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 ATM implied volatility (IV) have risen, but there's a notable convergence between the 7-day and 30-day IV. The short-term IV has spiked, likely driven by geopolitical concerns, particularly fears of escalating conflict in the Middle East, as Iran's missile attacks on Israel raise uncertainty.

BTC's term structure has shown backwardation, particularly in the front end of the curve, where tenors lasting up to 7 days have been notable increases. This indicates that traders anticipate increased short-term volatility but maintain confidence in long-term price stability.

The call-put skew has moved back into negative territory, with the 30-day skew at -0.01 and the 7-day skew at -2.94. This shift indicates that the market perceives the escalating Middle East tensions as bearish, despite Bitcoin's role as a store of value and a tool for money transfers in conflict zones. The steep negative skew in the short term suggests heightened demand for puts, reflecting traders' concerns about downside risks in the near future.

Lastly, @Paradigm highlighted a trading session where the overall sentiment appears slightly mixed but leans bearish due to the presence of downside-focused strategies. Key BTC trades encompassed the procurement of 1000x 11-Oct-24 $62K/$62K Put Calendar and a sale of 646x 11-Oct-24 $66K Calls. Additionally, notable BTC trades included a bought 600x 27-Dec-24 $65K/$70K Call Calendar. Key ETH trades included 35,750x 11-Oct-24 $2.8K Calls and 20,000x 18-Oct-24 $2.8K Calls, both bought.

Crypto Technical Analysis

In technical analysis, BTC has experienced another sharp decline due to the macroeconomic impact of Iran’s attack. The price effectively broke through the 100-period SMA on the 4-hour chart and found support at the 200-period SMA. If the price declines further, the next support could be near $58K, while a definitive reversal could push the price back to the $64K level. Additionally, the RSI has declined into oversold territory, reflecting growing fears in the market.

On the other hand, while ETH has experienced similar price movements, it has broken below the previously identified lower trendline. Currently, the price appears to have found support near the $2.47K level, where the horizontal support zone intersects with the 200-period SMA on the 4-hour chart. Despite some recovery, the RSI remains in oversold territory after the recent drop, indicating potential for a short-term reversal. If a rebound occurs, the price may re-test the resistance at $2.68K. However, if the price continues to decline, ETH may drop to the next support level at $2.27K, marking the local low.

Access institutional-grade commentary on TradFi × Crypto markets

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TRHX Research (Formerly Treehouse Research) 🌳