BTC

ETH

S&P 500 Futures

$59,230.10

$2,533.74

$5,656.75

(+3.06%)

 (+3.79%)

(-0.01%)

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

  • Oil prices see modest recovery; China and South Africa agree on balanced trade and investments(More in Macro & TradFi)
  • Trump regains winning position over Harris on Polymarket; SEC states the possibilities to intervene in the FTX bankruptcy payout (More in DeFi & CeFi)
  • Bitcoin's price may rise next month; however, low stablecoin inflows suggest investor skepticism about recovery (More in On-Chain)
  • BTC implied volatility diverges with decreasing levels; BTC’s skew levels exhibit rising trend (More in Crypto Derivatives)
  • BTC is approaching key resistance at 62K, testing momentum; ETH has just overcome 2.5K resistance (More in Crypto Technical Analysis)

Macro & TradFi

Oil prices saw a modest recovery following last week's losses, driven by ongoing disruptions in Libyan oil exports and easing concerns over increased OPEC+ production starting in October. U.S. West Texas Intermediate (WTI) crude increased by 0.7% to $74.04 per barrel, while Brent crude rose by 0.8% to $77.52 per barrel, with trading volumes subdued due to a U.S. public holiday. Libyan oil production remains affected by a standoff between political factions, with the National Oil Corp. declaring force majeure on the El Feel oil field. Plans for OPEC+ members to increase output by 180,000 barrels per day in October caused last week's sell-off of oil prices, as concerns about U.S. and Chinese demand continue to weigh on the market.

Meanwhile, during a meeting between President Xi Jinping and President Cyril Ramaphosa in Beijing, they both agreed to enhance balanced trade and boost mutual investments between China and South Africa, emphasizing sustainable manufacturing and job creation in South Africa. Ramaphosa aimed to address South Africa's trade deficit with China, seeking more equitable trade relations and sustainable investments. China, South Africa's largest trading partner, is committed to supporting local employment, establishing manufacturing bases, and sharing expertise in poverty reduction and rural revitalization. The nations signed multiple cooperation agreements, including those on satellite navigation, housing, and dairy exports, and pledged to expand collaboration in renewable energy. They also called for international backing of the African Continental Free Trade Agreement to foster African economic integration. This could possibly result in greater adoption of goods and services in Africa by investors and institutions around the world.

The U.S. market is closed due to a public holiday, while Asian markets showed mixed performance. Japan's Nikkei 225 and Topix indices recorded modest gains, rising by 0.18% and 0.38%, respectively, and South Korea's Kospi and Kosdaq increased slightly by 0.17% and 0.02%. In contrast, Australia's S&P/ASX 200 fell by 0.39%, reflecting concerns over China's economic slowdown as its Manufacturing PMI contracted for the fourth consecutive month in August, dropping to 49.1 from 49.4 in July. The manufacturing contraction has heightened worries that China may struggle to achieve its 5% growth target. JOLTS Job Openings data will be due on Wednesday at 22:00 SGT. Nonfarm Payrolls, Unemployment Rate, and Average Hourly Earnings data will be released on Friday at 20:30 SGT.

DeFi & CeFi

  • Trump leads Harris again in Polymarket trading
  • SEC may intervene with stablecoin payouts in the FTX bankruptcy plan
  • Vitalik published an article discussing a modern computing trend
  • Black Myth Wukong’s first investor expressed doubts about Web3 gaming
  • Metaplanet teams up with SBI VC Trade for Bitcoin custody

In the latest updates from the Polymarket, traders are showing increased confidence in Donald Trump's chances in the upcoming U.S. presidential election, with his odds now at 51%. This shift comes after a period of fluctuating odds, where Kamala Harris previously led in early August. Trump's rise in the betting market follows his promotion of a new decentralized finance project World Liberty Financial, which contrasts with a dip in Harris' odds amid controversy over her proposed tax on unrealized gains. Currently, substantial amounts have been wagered on both candidates, totaling nearly $200 million, reflecting significant trader engagement and speculation on the election's outcome.

Elsewhere, the SEC is potentially complicating the FTX bankruptcy plan by indicating it may challenge the distribution of crypto assets, specifically stablecoins, to creditors. The regulatory body expressed concerns in a recent court filing, noting that while the FTX bankruptcy estate's proposal included distributing stablecoins as part of the creditor payouts, the SEC has reserved the right to object to these transactions. The agency also seeks to remove a provision from the plan that would discharge the debtors, aligning with concerns from the U.S. Trustee. This stance has drawn criticism from industry voices like Galaxy Digital's Alex Thorn, who accuses the SEC of jurisdictional overreach without presenting a solid legal argument against the use of stablecoins in the bankruptcy payouts.

On-Chain

According to CryptoQuant, the WaveNet deep learning model, which analyzes extensive on-chain data from 2012 to the present, predicts a potential rise in Bitcoin's price over the next month. The model suggests a 50% probability that Bitcoin's price will remain within a defined range, with a 90% probability covering a slightly broader range. Given the model's historical accuracy, as demonstrated in previous forecasts, there is a strong likelihood of Bitcoin's price experiencing a relative increase in the coming month.

In another analysis by theKriptolik on CryptoQuant, the decline in stablecoin inflows to exchanges suggests that investors remain cautious about Bitcoin's current price recovery. Despite Bitcoin's valuation at $59,000 following a sharp decline, the typical surge in stablecoin deposits—used to purchase Bitcoin at perceived undervalued prices—is notably absent. This near-all-time low level of stablecoin inflows indicates that many investors are not yet convinced that Bitcoin's downturn has concluded, signaling continued uncertainty in the market.

Derivatives

  • Funding rates for BTC and ETH turned positive.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH decreased to 52.76% and 64.28%, respectively.
  • The 30-day 25-delta skew (C-P) for BTC and ETH increased to -0.71 and -2.66, respectively.
  • The futures market witnessed $68.44M in liquidations over the last 24 hours, with shorts representing 69.23%.

Net Annualized APR

Perp (USDT pair)

Long on

Short On

21.97%

AVAX

Bybit

dYdX

14.69%

AVAX

Binance

dYdX

14.25%

SOL

Bybit

Binance

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 30-day and 7-day IV are displaying signs of divergence after converging momentarily yesterday. They both decreased to 50.42% and 46.14%, respectively, with a more significant movement in the 7-day IV, potentially due to a lack of BTC-specific catalysts over the next 30 days. 

The BTC term structure continues to display a contango pattern, with heightened volatility observed in durations up to seven days, suggesting persistent short-term speculation. Implied volatility in longer durations remains uniform, indicating stable market expectations among traders. 

BTC's 25-delta skews are showing a rising trend, with 7-day and 30-day skews escalating to -0.71 and -1.62, respectively. This indicates that while traders continue to hold a bearish outlook on the market, there is a shift towards a more positive sentiment.

Lastly, @Paradigm emphasized a mix of call strategies in the market. Key BTC trades encompassed the sale of 590x 27-Dec-24 $80K / $100K Call Spread and 300x 8-Nov-24 $60K Call, and the purchase of 263x 27-Sep-24 $60K/$70K Call Spread. In ETH, notable activities included the sale of 6000x 27-Dec-24 $5K / 28-Mar-25 $6K Call Calendar and the purchase of 1125x 27-Dec-24 $5K / 28-Mar-25 $6K Call Calendar.

Crypto Technical Analysis

Moving on to technical analysis, BTC has moved higher and is now approaching the resistance level of around 62K. This level has acted as a significant barrier in recent sessions, and BTC is once again on the verge of testing it. The price action shows a gradual upward movement as BTC gains momentum, supported by the recent bullish crossover of moving averages. Should BTC manage to break above this resistance, the next potential target could be around 66K. Conversely, failure to breach 62K might lead to a pullback, with immediate support found near 56K. The RSI is currently at 53, indicating a neutral trend with a slight upward bias. 

ETH, on the other hand, has overcome the resistance level at 2.5K during yesterday’s session, which had previously acted as a significant barrier. This breakout suggests a potential shift in momentum as ETH attempts to establish a higher support zone above this level. If the price can hold above 2.5K, the next resistance to watch is around 2.8K, representing a potential rise of approximately 12% from the current price. However, if ETH fails to maintain this breakout, the 2.4K level could serve as immediate support.

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By TRHX Research

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TRHX Research (Formerly Treehouse Research)🌳