BTC

ETH

S&P 500 Futures

$62,170.00

$2,439.25

$5,795.25

(-0.60%)

 (+0.08%)

(+0.75%)

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

  • Reserve Bank of New Zealand cuts interest rate by 50 bps; Chase CEO calls for simplifying public listing process in US and UK (More in Macro & TradFi)
  • Crypto.com sues SEC over regulatory overreach; Canary Capital files for spot XRP ETF with SEC (More in DeFi & CeFi)
  • Short-term holders driving positive sentiment; UTXO supply shows confidence among long-term holders (More in On-Chain)
  • BTC IVs and Skews points towards neutral market sentiment (More in Crypto Derivatives)
  • BTC price consolidates near support level of $60K; ETH chart suggests bullish divergence trend (More in Crypto Technical Analysis)

Macro & TradFi

The Reserve Bank of New Zealand (RBNZ) has reduced its benchmark interest rate by 50 basis points, bringing it down from 5.25% to 4.75%. This marks the second consecutive rate cut, following an unexpected 25 basis point reduction in August. The RBNZ stated that annual consumer price inflation is currently within its target range of 1% to 3%, converging toward the 2% midpoint. Despite a significant decrease in inflation from a high of 7.3% in mid-2022 to 3.3% in June 2024, it remains above the central bank's medium-term target. The RBNZ noted subdued economic activity, weak business investment, and declining consumer spending as factors necessitating the rate cut to promote stable inflation and support economic growth.

Elsewhere, JPMorgan Chase CEO Jamie Dimon has called for U.S. and U.K. regulators to simplify the process for companies to go public, citing increasing challenges such as rising litigation costs and a decline in research for smaller firms. In a Bloomberg Television interview, he noted the lack of growth in IPOs despite rising public market valuations and emphasized the need to make going public easier and more cost-effective. Dimon also advocated for allowing more midsize U.S. banks to merge, criticizing government involvement in minor bank deals as unfair. He reiterated concerns about persistent inflation, warning that it may be more enduring than anticipated, and expressed apprehension about geopolitical issues and the U.S. deficit, which he believes contribute to inflationary pressures.

Lastly, U.S. stocks rallied as large-cap tech shares drove major indexes higher and oil prices fell sharply. The S&P 500 and Nasdaq gained 1% and 1.5%, respectively, while the Dow Jones Industrial Average rose 0.3%. Nvidia led tech gains, up 4.1% amid AI demand optimism, alongside gains for Apple, Amazon, and Microsoft. Energy stocks slid as crude oil fell over 4% following reports of easing tensions in the Middle East, with Marathon Petroleum and Valero Energy down 7.7% and 5.3%, respectively. Chinese stocks declined as Beijing refrained from new stimulus, with the iShares MSCI China ETF dropping 11%. Notable gainers included Palantir, up 6.6%, on AI momentum, while Edwards Lifesciences rose 6.2% on potential Medicare reimbursement updates. US September CPI data due tomorrow, 10 October, at 20:30 SGT.

DeFi & CeFi

  • Crypto.com sues SEC for ‘illegal actions’ in crypto regulation following Wells Notice
  • Canary Capital files for a spot XRP exchange-traded fund with the SEC
  • Ethereum layer-2 Scroll tips native token launch, Binance set to list token, SCR for premarket trading
  • Linea proposes decentralization roadmap including proof-of-stake model for block validation
  • Polychain, Franklin Templeton back Bitlayer’s $9M Series A extension
  • Tether reveals 10-year roadmap to expand beyond stablecoins

Crypto.com has initiated a lawsuit against the U.S. Securities and Exchange Commission (SEC) and its Chair, Gary Gensler, after receiving a Wells Notice indicating potential enforcement action against the exchange. The lawsuit seeks to prevent the SEC from expanding its jurisdiction to cover secondary-market sales of certain network tokens, which Crypto.com argues constitutes regulatory overreach. CEO Kris Marszalek stated that the action is necessary to protect the future of cryptocurrency in the U.S. and challenge the SEC's "regulation by enforcement" approach, which he claims has harmed over 50 million American crypto holders. The Wells Notice, issued on August 22, warned the exchange about operating as an unregistered broker-dealer based on the SEC's classification of various network tokens as securities. The exchange is requesting a court ruling to confirm that none of the tokens on its platform are securities and that it does not operate as an unregistered entity. 

Meanwhile, Canary Capital has filed a registration statement with the U.S. SEC for a spot XRP ETF, making it the second firm this month to pursue such a product. Bitwise has made a similar filing earlier, and Canary’s filing signals growing interest in providing institutional investors with access to XRP through traditional financial platforms. According to Canary Capital founder Steven McClurg, the firm is optimistic due to "encouraging signs of a more progressive regulatory environment" and increasing demand for access to blockchain solutions beyond Bitcoin and Ethereum. If approved, the ETF would offer investors exposure to XRP without directly holding the asset, but it may face challenges given the SEC’s ongoing legal dispute with Ripple, which centers around XRP’s classification as an unregistered security.

On-Chain

According to Glassnode's analysis, Short-Term Holders (STHs) significantly influence local price movements, and their supply held in profit or loss serves as a key indicator of market sentiment. Currently, STHs exhibit a clear profit dominance, with a profit-to-loss ratio of 1.2. This metric has also surpassed one standard deviation above its 90-day mean, indicating a potential positive shift in investor sentiment. The deviation suggests growing confidence among short-term investors, which could signal upward momentum in the market.

In a separate analysis, AxelAdlerJr from CryptoQuant shared that the UTXO supply in loss has approached 20%, indicating that a notable portion of the supply is held by confident long-term holders, while the rest represents those currently at a loss. UTXO supply refers to the total amount of unspent BTC from past transactions, with the supply in loss representing the portion bought at a higher price than the current market value. Historically, similar conditions in past cycles have sometimes preceded a price rally, suggesting that this scenario could potentially lead to a market rebound.

Derivatives

  • Funding rate for BTC turned negative on some major exchanges while ETH remained positive. 
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH rose to 55.69% and 62.06% respectively.
  • The 30-day 25-delta skew (C-P) for BTC decreased slightly to 0.46 while ETH increased to -0.64.
  • The futures market witnessed $140.17M in liquidations in the last 24 hours, with longs representing 60.94%.

Net Annualized APR

Perp (USDT pair)

Long on

Short On

34.93%

DOGE

OKX

dYdX

31.14%

DOGE

Binance

dYdX

29.39%

DOGE

Bybit

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.

Both the 7-day and 30-day ATM implied volatility for Bitcoin have shown a slight decrease. The 7-day ATM volatility has dropped slightly to 41.91, while the 30-day ATM volatility has maintained at 52.65. This continued decline in 7-day implied volatility suggests that short-term market uncertainties have eased, reflecting a calmer outlook for the near term. However, the 30-day volatility remains elevated suggesting that traders are still pricing in a higher degree of caution for longer-term price movements. This implies that while immediate concerns have subsided, market participants remain uncertain about potential volatility over the next month. The divergence between the short and medium-term volatilities could indicate that traders foresee possible risks or events affecting Bitcoin in the coming weeks that could lead to larger price swings, keeping the 30-day volatility higher.

BTC’s term structure’s contango shape has remained intact, with the implied volatility for shorter maturities sitting lower than that for longer maturities. The steep increase early in the curve indicates that traders foresee relatively stable conditions in the near term but anticipate growing uncertainty or risk as we move further into the future.

In the past day, both the 7-day and 30-day skew have shown relatively minor changes. The 7-day skew moved closer toward neutral territory, suggesting that traders have reduced their short-term bias toward downside protection, leading to a more balanced outlook between calls and puts. Meanwhile, the 30-day skew has remained fairly stable with only minor fluctuations, indicating little change in the medium-term sentiment. Traders still maintain their overall positioning, but the lack of significant movement suggests that there hasn't been a major shift in market expectations over the next month.

Lastly, @Paradigm highlighted key BTC trades included the purchase of a 500x 29-Nov-24 $100K Call, a 313x 29-Nov-24 $50K/$74K Strangle, a 300x 27-Dec-24 $85K/$95K Call Spread, a 200x 25-Oct-24 $69K Call, and a 200x 27-Dec-24 $57K Put. For ETH, notable trades were the purchase of a 5250x 18-Oct-24 $2.5K Call, the sale of a 2000x 18-Oct-24 $2.4K Call, the sale of a 1500x 25-Oct-24 $2.6K/$3K Call Spread, and the purchase of a 1500x 28-Mar-25 $3.2K Call alongside a 1500x 28-Mar-25 $3K Call.

Crypto Technical Analysis

Moving on to Technical Analysis, BTC is currently hovering around the key support level at 60K, marked by the red horizontal line. The price action appears to be consolidating just above this support, with the 200 Simple Moving Average for this period providing additional reference points for potential future movement. Should the 60K support be breached, the next notable support is around 59.6K. On the upside, immediate resistance is visible around 64.2K, which, if surpassed, could open the path towards 66K. This consolidation phase around support suggests a cautious market waiting for the next significant move.

On the other hand, the ETH chart shows a bullish divergence with higher lows in price action and lower highs in RSI. With ETH trading at $2.4K, this pattern suggests a potential for a breakout if the price holds above the ascending trendline with the resistance level at $2.7K.  Conversely, immediate support can be found at the $2.2K level. Traders should watch for confirmation through a break above the resistance level at 2.7K, which indicates the possibility of a continued bullish move despite the weakening momentum on the RSI.

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TRHX Research (Formerly Treehouse Research) 🌳