BTC

ETH

S&P Futures 500

$67,797.28

$3,773.79

$5,309.00

(-0.92%)

 (+0.62%)

(+1.31%)

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


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Our Daily View

What We Are Covering Today

  • PCE price index increases 0.2%; Oil alliance OPEC+ extends crude production output cuts into 2025 (More in Macro & TradFi)
  • ARK Invest ends partnership with 21Shares on Ether ETF; Matter Labs drops ZK trademark applications after industry backlash (More in DeFi & CeFi)
  • ETH outflow of approximately $3B since ETF approval; BTC reserves on exchanges on a decline (More in On-Chain)
  • Bitcoin options show moderate bullishness; Ethereum options display extreme bullishness due to ETF news (More in Crypto Derivatives)
  • BTC exhibits descending triangle pattern; ETH price consolidating (More in Crypto Technical Analysis)

Macro & TradFi

In April, the Federal Reserve's preferred inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy, rose by 0.2%, matching expectations. Annually, core PCE increased by 2.8%, slightly above estimates, while the overall PCE, including food and energy, rose by 2.7% year-over-year. Personal income also grew by 0.3%, while spending increased by 0.2%, below the anticipated 0.4%. Despite this modest rise in inflation, the data suggests no immediate change in the Fed's cautious stance on interest rate adjustments. Market reactions included a rise in stock futures and a drop in Treasury yields. Fed officials, like New York Fed President John Williams, emphasize the need for sustained progress toward the 2% inflation goal before considering rate cuts, likely delaying any reductions until at least November.

Elsewhere, OPEC+, a coalition of oil-producing nations including key players Saudi Arabia and Russia, has decided to extend its crude output cuts into 2025, continuing with two sets of supply curbs through different timeframes. Initially set to expire at the end of this year, nearly 1.7 million barrels per day of voluntary cuts will now extend through 2025, with an additional 2.2 million barrels per day of cuts continuing until the end of the third quarter. This strategic move aims to manage supply effectively amidst fluctuating global demand, influenced by factors such as China's refinery operations and seasonal driving patterns.

Last Friday, Wall Street closed higher after the Fed’s preferred inflation measure met expectations. The S&P 500 rose by 0.81%, the Dow Jones Industrial Average increased by 1.51%, while the Nasdaq 100 slightly declined by 0.01%. At the Shangri-La Dialogue security forum in Singapore, discussions were dominated by conflicting US and Chinese perspectives on the Indo-Pacific, with the US emphasizing alliances and China condemning external influences. Additionally, France's credit rating was downgraded to AA- from AA by S&P Global due to missed deficit-reduction targets. Upcoming key economic data include JOLTS Job Openings on Tuesday at 22:00 SGT, ADP Employment Change on Wednesday at 20:15 SGT, and Nonfarm Payrolls, Unemployment rate, and Average hourly earnings on Friday at 20:30 SGT, all expected to significantly impact market sentiment.

DeFi & CeFi

  • ARK Invest ends partnership with 21Shares on Ether ETF
  • Matter Labs drops ZK trademark applications after industry backlash
  • US Navy launches ‘PARANOID’ blockchain security tech to private sector
  • Uniswap Foundation postpones vote on incentives
  • Spot Ethereum ETF 'fee war' begins as Franklin Templeton discloses fees

21Shares has rebranded its Ethereum spot ETF from Ark 21Shares Ethereum ETF to 21Shares Core Ethereum ETF and updated its S-1 application, with no changes to fees. Despite the acknowledgment of ETH’s long-term value, ARK Invest has terminated its partnership with 21Shares for the ETF, stating a need to reassess its investment strategy. However, this doesn't affect their collaboration on other projects, such as the ARK 21Shares Bitcoin ETF. The partnership between 21Shares and ARK Invest involved 21Shares sponsoring the ETF, with Delaware Trust Company as trustee, Coinbase Custody Trust Company holding Ether assets, and ARK Investment Management supporting marketing efforts. Additionally, they've launched the ARK 21Shares Blockchain and Digital Economy Innovation ETF, providing investors with exposure to blockchain technology growth.

In other news, Matter Labs, the team behind Ethereum layer-2 scaling solution zkSync, has abandoned its efforts to trademark the term "ZK" after facing criticism from leading ZK researchers. The decision follows a public letter condemning the move, asserting that ZK technologies should remain a public good accessible to all. Matter Labs initially pursued the trademarks to protect its products' names but now acknowledges the importance of maintaining ZK as a public resource. The move highlights the tension between intellectual property rights and the open-source ethos of the cryptocurrency industry.

On-Chain

Today's on-chain analysis from CryptoQuant reveals that following the approval of the Ethereum Spot ETF on May 24, 2024, there was a notable withdrawal of over 800,000 Ethereum from exchanges within just 8 days, amounting to roughly $3 billion. This substantial outflow, reminiscent of similar movements observed after the Bitcoin Spot ETF approval, likely involves major players like whales or institutional investors.

Another analysis from CryptoQuant indicated a noticeable decline in Bitcoin reserves on exchanges, pointing towards a trend where investors are not immediately selling the Bitcoins they acquire. Historically, such a reduction in exchange reserves has often been a precursor to bull markets, as it suggests a decrease in selling pressure. Currently, the market is consolidating within a specific range, which could be seen as a phase of accumulation and strengthening. This pattern, if it continues, is likely to lead to a sharp price increase. Observations suggest that we are approximately halfway through the current bull rally, with the next phase potentially triggering a significant upswing in prices, driven by increased market optimism and speculative trading.

Derivatives

  • Funding rates remained positive for BTC and ETH.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH remained relatively unchanged at 51.13% and 65.27%.
  • The 30-day 25-delta skew (C-P) for BTC increased to 0.97% while ETH shot up to 4.38%.
  • The futures market witnessed $137.06M  in liquidation, with longs representing 65.48%.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On

19.79%

SOL

Binance

OKX

18.94%

SOL

Bybit

OKX

17.61%

BNB

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.


Bitcoin’s 7-day ATM IVs marginally declined to 41.42% while 30-day ATM IVs remained relatively unchanged at 49.51%. This decline could be due to a lack of perceived BTC-related catalysts over the next 30 days.

BTC’s term structure exhibits traits contango, with no significant changes over the past day. 

Furthermore, BTC's 25-delta skews have remained positive, consistently staying above the 0% mark. The 7-day skews increased to 0.69%, and the 30-day delta skews rose to 0.97%. This indicates that market participants in the Bitcoin options market are bullish.On the other hand, ETH 25-delta skews exhibit extreme bullishness, with 7-day skews at 5.46% and 30-day skews at 4.38%. This surge in bullish sentiment likely stems from the ETH ETF 19b-4 approvals last week, prompting increased bullish speculation that the ETF may be fully approved soon.

Lastly, @Paradigm’s option flows from yesterday emphasized strategies consisting mainly of call calendars bought for ETH structures. Key BTC trades encompassed the procurement of 500x 28-Jun-24 $64k/$80k Bear Risk Reversals, 500x 26-Jul-24 $64k/$60k Put Spreads, and a singular transaction that involved the sale of 425x 28-Jun-24 $64k/$60k Put Spreads. Significant ETH trades included 14125x 28-Jun-24 $4K/$5K Call Spreads, 10875x 28-Jun-24 $3.4K/$4.5K Bear Risk Reversals, and a noteworthy purchase of 9750x (Inverse) 7-Jun-24 4100/14-Jun-24 4600 Call Calendars.

Crypto Technical Analysis

Moving on to technical analysis, BTC has formed a descending triangle pattern characterized by a series of lower highs and a consistent support level at $67.2K. This price movement formed by the series of lower highs forms a trendline that converges as the price action progresses, indicating a decrease in buying pressure. This formation could signal a potential continuation downtrend in price within the descending triangle if bearish sentiment were to persist. If price were to breakout below the support level, the subsequent support level is present at $60.7K.  Traders should monitor the $67.2K and $68.2K levels for immediate support and resistance, respectively.

ETH, on the other hand, remained relatively unchanged during yesterday's trading session as its price is currently at $3.8K, and continues to consolidate within a price range of $3.9K as resistance, and $3.6K as support. If support level fails to hold, ETH may experience a significant decline toward the $3.3K level, representing a 13.1% drop.

Access institutional-grade commentary on TradFi × Crypto markets

By Treehouse Research

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