BTC

ETH

S&P 500 Futures

$58,010.56

$2,455.07

$5,534.50

(+2.26%)

 (+3.17%)

(+0.42%)

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

GM 🌳

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August 2024 Market Recap

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Our Daily View

What We Are Covering Today

  • Nvidia addresses DOJ antitrust probe, denies being subpoenaed; Biden expected to block Nippon Steel's $14.1 billion U.S. Steel acquisition (More in Macro & TradFi)
  • The Future Forward PAC to accept crypto to support Harris; a16z and Union Square Ventures subpoenaed about Uniswap (More in DeFi & CeFi)
  • Despite downward price pressure, Bitcoin investors remain strong; Long-term holders signal a potential transition in the market (More in On-Chain)
  • 30-day 25-delta skew (C-P) for BTC and ETH recover slightly; Negative funding rates for BTC on dYdX (More in Crypto Derivatives)
  • BTC consolidates in a horizontal triangle near support at $56.1K; ETH faces mild bearish pressure (More in Crypto Technical Analysis)

Macro & TradFi

Nvidia has clarified that while it has been in contact with the U.S. Department of Justice (DOJ) regarding an antitrust probe, it has not been formally subpoenaed. The investigation, focused on Nvidia's dominance in the AI chip market and its acquisition of RunAI, is being led by the DOJ’s San Francisco office. Regulators are reportedly concerned about potential anti-competitive practices, such as Nvidia making it harder for customers to switch to other suppliers or favoring buyers who use its technology exclusively. Nvidia maintains that its market leadership is based on the superiority of its products.

Meanwhile, President Joe Biden is expected to block Nippon Steel's $14.1 billion acquisition of U.S. Steel Corp., citing national security concerns under review by the Committee on Foreign Investment in the U.S. (CFIUS). Despite this, U.S. Steel has vowed to pursue legal options to push the deal through, insisting that Japan, a key U.S. ally, poses no security threat. This decision has significant political implications in Pennsylvania, a critical swing state, and has already caused U.S. Steel shares to drop by 17%.

On Wednesday, U.S. markets experienced a slight decline as weak labor market data and dovish comments from the Federal Reserve signaled a possible rate cut. The S&P 500 closed down by 8.86 points to 5,520.07, and the Nasdaq Composite lost 52.00 points to 17,084.30. The Dow Jones Industrial Average, however, posted a modest gain of 38.04 points, closing at 40,974.97. Nvidia shares fell 1.7% amid reports of a DOJ investigation, while other major tech companies also saw declines: Apple was down 0.9%, Microsoft slipped 0.1%, Alphabet fell 0.5%, and Amazon dropped 1.7%. Tesla was a bright spot, gaining 4.2%. AMD rose nearly 3% after hiring former Nvidia executive Keith Strier to lead global AI markets. Labor market data from the Job Openings and Labor Turnover Survey (JOLTS) showed job openings falling to a 3.5-year low in July, which further supported the case for a rate cut. Six out of 11 S&P 500 sectors ended the day lower, with utilities and consumer staples showing strength, while energy and tech sectors lagged.

DeFi & CeFi

  • The Future Forward PAC to accept crypto via Coinbase to support the Harris Campaign
  • a16z and Union Square Ventures subpoenaed in New York about the Uniswap case
  • ApeCoin teases plan to incentivize BAYC-themed community developments ahead of ApeChain launch
  • Binance hires Grant Thornton to advise on audits
  • SOL gets first IV index on Volmex

The Future Forward PAC, one of the top Democratic and liberal-leaning political action committees, is now set to accept cryptocurrency donations via Coinbase Commerce to support Vice President Kamala Harris' presidential campaign.

Previously backing President Joe Biden's reelection bid, the PAC has shifted its support to Harris after Biden withdrew from the race. The decision to use Coinbase Commerce, which converts donations into the stablecoin USDC to minimize volatility, marks a significant move in political fundraising. This development follows the adoption of crypto donations by the Trump campaign and discussions within the Biden campaign to do the same. The Future Forward PAC's transition to crypto donations highlights the growing intersection of digital assets and political funding.

Elsewhere, New York State Attorney General Letitia James has issued subpoenas to major venture capital firms Andreessen Horowitz (a16z) and Union Square Ventures as part of an investigation into their investments in the cryptocurrency trading platform Uniswap. This regulatory scrutiny is part of a broader offensive by U.S. regulators targeting the cryptocurrency sector, intensified by the high-profile collapses of various crypto firms in 2022. Uniswap itself has recently faced actions from other regulatory bodies, including a $175,000 civil penalty from the Commodity Futures Trading Commission (CFTC) for violations of the Commodity Exchange Act. The platform has also received a Wells notice from the SEC, indicating potential securities law violations. This series of regulatory actions reflects ongoing concerns about the oversight and stability of the cryptocurrency and DeFi industries.

On-Chain

According to Glassnode's analysis, despite increasing downward price pressure, unrealized losses in the Bitcoin market remain historically low, at just 2.9% of the market cap. This indicates that most investors are still in a relatively strong position, even with declining prices. The ratio of unrealized profits to losses currently stands at 6:1, with only 20% of trading days seeing a higher ratio, further showing the overall profitability of the average investor in this market environment.

In another analysis by Glassnode, it is noted that during downtrends, market dynamics shift towards patience and HODLing, with Long-Term Holders (LTHs) playing a significant role. A large portion of LTH coins were sold for profit during the March all-time high, contributing to a net supply overhang. Recently, LTHs have slowed their profit-taking, and the supply accumulated during the all-time high period is now maturing into long-term holdings. Historically, such an increase in LTH supply often signals a transition toward a bear market, suggesting potential further downward trends. However, the percentage of wealth held by new investors during the 2024 peak did not reach the elevated levels seen in previous all-time high distribution events.

Derivatives

  • Funding rates for BTC and ETH remained positive except for BTC on dYdX.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH remained similar at 55.61% and 67.09% respectively.
  • The 30-day 25-delta skew (C-P) for BTC and ETH rose slightly to -1.0 and -2.74, respectively.
  • The futures market witnessed $84.86M in liquidations over the last 24 hours, with longs representing 67.1%.

Net Annualized APR

Perp (USDT pair)

Long on

Short On

18.26%

BTC

dYdX

Binance

17.87%

BTC

dYdX

Bybit

13.69%

BTC

dYdX

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 7-day and 30-day IV both experienced a continued decline over the past day, with the 7-day IV showing a sharper drop. This pullback follows a recent spike in volatility observed on September 3, suggesting that the immediate uncertainty or speculation that drove the short-term volatility is easing. The 7-day IV, after its peak, has now dropped significantly, while the 30-day IV has also decreased but at a slower pace, indicating that the market is stabilizing in the short term. 

The BTC shadow term structure shown in the graph reflects a transition from a slight backwardation to a contango, exhibiting higher implied volatility than longer-term maturities.

Over the past day, the BTC skew constant maturity has shown a slight recovery, particularly in the 7-day skew, which had previously experienced sharp declines. The 7-day skew saw an uptick, indicating reduced short-term demand for puts as immediate downside concerns eased. However, the 30-day skew remained relatively stable, showing less sensitivity to the recent price movements. 

Lastly, @Paradigm highlighted that key BTC trades included the purchase of 500x 29-Nov-24 $40K Put and 328x (Inverse) 20-Sep-24 $54K / 27-Sep-24 $50K Put Calendar, alongside the purchase of 200x +1.00-Call-29 Nov-24 $69K / -1.25-Call-29 Nov-24 $76K Custom Strategy and 200x 27-Sep-24 $72K/$75K Call Spread. In ETH, notable activities involved the purchase of 6000x 27-Dec-24 $2.4K/$3K Call Spread and 1500x 25-Oct-24 $2.7K/$2.6K Put Spread, as well as the purchase of 1375x 13-Sep-24 $2.6K / 27-Sep-24 $2.5K Put Calendar.

Crypto Technical Analysis

Moving on to technical analysis, BTC is currently forming a horizontal triangle pattern, indicating a period of consolidation as the market awaits a decisive move. The price is hovering around $58.1K, slightly above the support level at $56.1K. Immediate resistance is seen at $59.6K, with a break above potentially leading to a move toward the stronger resistance at $62.05K, approximately a 6.7% rise from current levels. On the downside, should the $56.1K support fail, the next major support sits at $54K, representing a 7.1% drop.

Elsewhere, ETH is currently trading around $2.46K, maintaining a position near the $2.52K support level. There is immediate resistance at $2.70K, and a breach above this level could push the price towards the next key resistance at $2.86K, representing a potential upside of approximately 8.2%. On the downside, if the $2.52K support fails, the next significant support is located at $2.32K, which would be a 5.5% drop from current levels. The RSI is at 47.8 and is trending slightly downward, indicating a mildly bearish momentum.

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TRHX Research (Formerly Treehouse Research)🌳