BTC

ETH

S&P 500 Futures

$63,762.50

$2,488.75

$5,797.00

(+2.24%)

 (+2.89%)

(-0.12%)

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

  • US job growth sees highest increase in 6 months while unemployment fell; Fund managers expressed skepticism on further stock rallies in China (More in Macro & TradFi)
  • EigenLayer mistakenly transferred $5.5M to an attacker; US Justice Department moves seized funds through Tornado Cash (More in DeFi & CeFi)
  • Mid-sized Bitcoin holders have increased significantly since July; TRON leads blockchain TPS, driven by stablecoin transactions (More in On-Chain)
  • BTC's implied volatility rising gradually; BTC maintains a contango term structure (More in Crypto Derivatives)
  • BTC hovers near $63.7K facing key resistance at $66K; ETH tests resistance at $2.52K (More in Crypto Technical Analysis)

Macro & TradFi

In September, U.S. job growth exceeded expectations with nonfarm payrolls rising by 254,000—the highest increase in six months—while the unemployment rate fell to 4.1% and hourly earnings grew by 4% year-over-year. This strong labor market data, driven mainly by the leisure, hospitality, healthcare, and government sectors, reduces the likelihood of significant interest rate cuts by the Federal Reserve in November. The underemployment rate also declined to 7.7%, with over 200,000 fewer part-time workers for economic reasons. Looking forward, the upcoming October jobs report will account for recent labor strikes and the impact of Hurricane Helene, but the overall data suggests a positive economic outlook, with analysts predicting a likely 25-basis-point rate cut by the Fed.

Elsewhere, skepticism is growing among global fund managers regarding the recent rally in Chinese stocks, despite the Hang Seng China Enterprises Index rising over 30% since late September. Firms like Invesco, JPMorgan Asset Management, and HSBC Global Private Banking express concerns that many stocks have become overvalued and are waiting for the Chinese government to substantiate its stimulus measures with tangible financial support. While the rally has temporarily bolstered investor confidence, it has also raised alarms about potential false dawns, as seen in previous market recoveries. Analysts stress the need for further policy actions to boost economic activity and confidence, especially with geopolitical tensions and U.S. election uncertainties looming. Some remain optimistic, citing attractive valuations post-selloff, but others warn that the current momentum could quickly reverse, likening it to past market crashes.

Lastly, U.S. stocks surged on Friday as a strong September jobs report buoyed investor confidence in the economy's resilience. The Dow Jones Industrial Average gained 0.8% to reach a record high, while the S&P 500 and Nasdaq Composite rose 0.9% and 1.2%, respectively. The Labor Department reported 254,000 new jobs in September, well above forecasts, with unemployment at 4.1%. This upbeat data reduced pressure on the Federal Reserve to implement large rate cuts, with market expectations shifting to a quarter-point cut rather than half-point at the Fed's November meeting. Technology stocks rallied, with Meta Platforms up 2.3% and Nvidia climbing 1.7%. Lithium producer Albemarle rose 8.2% on acquisition rumors involving Rio Tinto, while United Airlines gained 6.5% amid reports of Spirit Airlines' financial troubles. Investors will be looking out for the US September CPI data due Thursday, 10 October, at 20:30 SGT. Minutes from Fed's September policy meeting will also be released on the same day at 02:00 SGT.

DeFi & CeFi

  • EigenLayer mistakenly transferred $5.5M to an attacker
  • US Justice Department moves seized funds through Tornado Cash
  • UAE eliminates tax on crypto transactions
  • Vitalik Buterin donates 100 ETH to Roman Storm defense fund
  • HKVAX becomes third crypto exchange licensed in Hong Kong

EigenLayer has reported a security incident involving the sale of $5.5 million worth of its tokens, where a "malicious attacker" hijacked a token transfer intended for a legitimate recipient. This resulted in 1,673,645 EIGEN tokens being mistakenly transferred to the attacker, who subsequently exchanged them for stablecoins and withdrew the funds to centralized exchanges. EigenLayer is cooperating with law enforcement, and some of the proceeds have already been frozen. The protocol confirmed that there is no inherent vulnerability in its system and has implemented measures to restrict current and former employees from staking or selling their EIGEN tokens until at least September 30, 2025. 

Elsewhere, the U.S. Justice Department is moving to seize approximately $2.67 million in cryptocurrency, primarily Tether stablecoins and Avalanche-bridged Bitcoin, linked to the North Korean hackers known as the Lazarus Group. These funds were allegedly frozen during attempts to launder proceeds from two major hacks: a $28 million attack on the Deribit crypto options exchange in November 2022 and a $41 million breach of the Stake.com online casino in September 2023. The forfeiture actions reveal how the hackers used crypto mixers like Tornado Cash, Sinbad, and Yonmix to obscure the flow of stolen funds. Law enforcement was able to trace the laundered assets through a series of transfers and conversions, resulting in the recovery of about $1.7 million in Tether and nearly $971,000 in Bitcoin. Despite these efforts, the Lazarus Group continues to operate and remains a significant threat in the crypto space.

On-Chain

According to Santiment, the number of mid-sized Bitcoin holders, often referred to as the "dolphin tier" (wallets holding between 0.1 to 10 BTC), has increased notably since July 4th, 2024. Wallets holding 0.1 to 1 BTC have grown by 25,671, while those with 1 to 10 BTC have added 4,013 more. This rise follows a period of decline earlier in the year and suggests renewed interest and accumulation among mid-sized traders as crypto markets improve, and the trend may signal increased confidence in Bitcoin among retail investors.

In an analysis by CryptoQuant, TRON has emerged as the fastest blockchain in terms of transactions per second (TPS), driven largely by stablecoin usage. On-chain data shows TRON processing 85 TPS, outperforming other major blockchains such as Bitcoin (7 TPS), Ethereum (14 TPS), and Polygon (30 TPS). TRON's consistency in TPS, with 96% of its transactions involving stablecoins, highlights its growing role in stablecoin transactions. While Bitcoin is often viewed as the leading innovation in the crypto space, this data suggests that stablecoins, particularly on networks like TRON, are proving to be equally transformative.

Derivatives

  • Funding rates for both BTC and ETH remained positive. 
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH remained relatively flat at 57.23% and 64.85% respectively.
  • The 30-day 25-delta skew (C-P) for BTC dropped to 0.38 while ETH increased to -0.61.
  • The futures market witnessed $190.62M in liquidations in the last 24 hours, with shorts representing 63.77%.

Net Annualized APR

Perp (USDT pair)

Long on

Short On

12.45%

AVAX

OKX

dYdX

11.37%

AVAX

Binance

dYdX

11.18%

BTC

Binance

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.

BTC’s ATM implied volatility continues to rise gradually for 7-day IV and 30-day IV at 48.65 and 55.24, respectively. This indicates that while the market expects some near-term volatility, there is a stronger expectation of sustained volatility over a longer timeframe. Traders should adopt a cautious approach to potential upcoming events or sentiment shifts that could influence BTC’s price trajectory in the future.

BTC’s term structure maintained a contango structure with a heightened demand for short-term options of up to 30 days, before declining gradually and easing the curve over medium to long-term maturities. This reflects the market’s expectations for higher near-term volatility, while the stability in medium to long-term volatility highlights investor’s confidence in BTC’s broader outlook.

BTC’s 25-delta skew constant maturity indicates a bearish sentiment over 7-day tenors with skews at -1.76, while the 30-day call-put skew remains positive at 0.38, signaling a longer-term bullish sentiment. This suggests that traders are currently favoring puts over calls for short-term trades, and adjusting to a preference for calls over puts in long-term trades. This could be due to the strong labor market data which suggests a positive economic outlook, with analysts predicting a likely 25-basis-point rate cut by the Fed.

Lastly, @Paradigm highlighted a trading session consisting mainly of call strategies. Key BTC trades encompassed the purchase of a 1000x 11-Oct-24 $62K/ 25-Oct-24 $62K Put Calendar and 612x 25-Oct-24 $70K Call, and the sale of a 671x 11-Oct-24 $66K Call. For ETH, the notable trades included the purchase of a 35,750x 11-Oct-24 $2.8K Call and 20,000x 18-Oct-24 $2.8K Call, and the sale of a 17,500x 8-Nov-24 $2.4K Call.

Crypto Technical Analysis

Moving on to Technical Analysis, BTC is currently hovering around the $63.7K level after an upward move, gaining 1.5% in the recent session. There is a notable resistance zone just above at $66K, a level that has previously rejected price movements. A breach of this resistance could open the path towards the next significant resistance around $68K, marking a potential rise of approximately 6% from current levels. On the downside, immediate support is found at $62K, with a more robust support around $59.6K, which aligns with previous lows. The RSI stands at 66, indicating bullish momentum but nearing overbought conditions, suggesting a potential pullback if the price fails to breach resistance. 

ETH price is currently trading around $2.49K, with a recent gain of 2.03%. The price is testing resistance near $2.52K, a level that coincides with the 100 and 200-period moving averages, suggesting strong selling pressure in this zone. A successful break above this level could see ETH move towards the next significant resistance at $2.71K, an approximate 8% rise from the current price. On the downside, immediate support sits around $2.32K, with a more robust floor at $2.16K, should bearish pressure increase. The RSI is currently at 62, indicating bullish momentum with further room to rise before approaching overbought territory. 

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TRHX Research (Formerly Treehouse Research) 🌳