BTC

ETH

S&P Futures 500

$28,402.25

$1,566.50

$4,345.50

(+0.06%)

 (+0.09%)

(-0.92%)

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


GM Treehouser 🌳

Welcome to our Treehouse Daily newsletter, where Treehouse brings you financial news and insights free daily! We believe you’ll find this helpful.

Also, in case you have missed it, check out our latest research piece 👇


Our Daily View

What We Are Covering Today

  • President Biden pledges $100M in aid package for Gaza and the West Bank; Morgan Stanley saw largest stock decline since Jun 2020 (More in Macro & TradFi)
  • dYdX to transform into a public benefit corporation; Digital euro project in “preparation” phase (More in DeFi & CeFi)
  • RLB whale drove another 9% pump in the token price; The number of BTC whales reached the highest point in 6 months (More in On-Chain)
  • BTC's IV drops, reflecting Tesla's bullish stance; Contango in both BTC, ETH suggests stability (More in Crypto Derivatives)
  • BTC shows potential volatility; ETH trades within a bullish-descending wedge nearing key levels. (More in Crypto Technical Analysis)

Macro & TradFi

During President Joe Biden's visit to Tel Aviv, he pledged support for Israel amid the ongoing conflict and announced a $100 million aid package for both Gaza and the West Bank. Biden also confirmed that Israel would allow humanitarian aid to flow into Gaza, with trucks delivering supplies from Egypt. This visit was seen as an opportunity to express solidarity with Israel and gain support from other nations to limit the conflict's scope. However, it turned into a significant challenge as the deadly explosion in Gaza City deepened regional tensions, with Palestinian and Israeli leaders blaming each other. Biden publicly sided with the Israeli account of the incident, further complicating the situation and risking tensions with Arab leaders the U.S. needs to facilitate civilian evacuations from Gaza.

In other news, Morgan Stanley's shares experienced their most significant drop since June 2020, primarily due to a sharp decline in investment banking revenue and a sluggish wealth management business. Investment banking revenue fell by 27%, profit decreased, and wealth management revenue missed analysts' expectations, along with the lowest inflows in over three years. Despite this, Morgan Stanley exceeded trading expectations, and CEO James Gorman expressed optimism about a rebound in deals and capital raising. The bank had set ambitious targets for its wealth management business, but asset flows fell significantly short, posing a challenge for reaching their goals. However, in terms of M&A, Morgan Stanley is making progress, ranking as the No. 2 M&A adviser globally this year, ahead of JPMorgan.

During the previous US trading session, major US equity indices have seen a steady decline with the S&P 500 dropping by 1.3%, DJIA by 1%, and NASDAQ by 1.4%. Apart from Morgan Stanley's drop by 27%, United Airlines Holdings has also seen a notable movement, dropping nearly 10% due to concerns about the Israel-Hamas war and rising jet fuel costs affecting earnings. These market movements were influenced by various factors, including the ongoing geopolitical risks and higher Treasury yields.

DeFi & CeFi

  • dYdX to transform into a public benefit corporation and no longer earn trading fee revenue
  • Digital euro project moves to “preparation” phase
  • Standard Chartered to offer crypto custody for Dubai clients and consider creating a crypto settlement network
  • Ether.Fi rolls out liquid staking token eETH that can be restaked on Eigenlayer
  • Immutable to delay 125M $IMX token unlock to July 2024
  • Lightning Labs rolls out “Taproot Assets” to make Bitcoin “multi-asset” network
  • US Treasury targets Gaza crypto business in sanctions to squeeze Hamas

In a significant move towards decentralization and community alignment, dYdX plans to transform into a public benefit corporation, shifting its focus away from profit. As a result, the company will no longer earn trading fee revenue from its v4 platform, which it is preparing to launch on the mainnet, hosted on its Cosmos-based dYdX Chain. Although the firm will continue to generate revenue from earlier protocol versions, it anticipates that most trading activity will migrate to v4 over time. This transition will see user trading fees directed toward node operators and token stakers, further emphasizing the push toward decentralization. CEO Antonio Juliano stated that dYdX has had a long, profitable run and is now dedicated to the full decentralization of its platform and democratizing financial access to the community.

Meanwhile, the European Central Bank (ECB) has announced that its digital euro project is moving into a preparation phase, potentially paving the way for a decision to issue a central bank digital currency (CBDC). The preparation phase, set to begin in November, is expected to last two years and will involve finalizing a digital euro rulebook, selecting providers to develop a CBDC platform, and conducting further testing. The ECB's governing council will only decide on issuing a digital euro once the European Union's legislative process is complete. This shift has been met with mixed reactions, with some criticizing the timing, while others see it as an opportunity to refine the digital currency.

On-Chain

@spotonchain has identified two whales who recently purchased 8.514M RLB tokens valued at 1.27M, leading to an approximate 9% price increase. Further investigation by @spotonchain suggests that these two whale addresses likely belong to the same entity. It's worth noting that this entity has a track record of profitable RLB token trading, having previously generated over $160K in profit. This movement may indicate sustained bullish momentum for the token, making it a subject of interest for investors considering future token movements and the evolution of the Rollbit platform.

Shifting focus, data from @santimentfeed reveals that the number of BTC whales, defined by addresses holding over 100 BTC, has reached its highest point in six months. In particular, 115 new wallet addresses have entered this category since October 13th, signifying a 5.3% increase. Despite the broader market's letdown following the false spot ETF approval news from Cointelegraph, this development provides a bullish signal for BTC in the long term.

Crypto Derivatives

  • Funding rates turned negative for BTC but remained positive for ETH.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH slightly dipped, now at 39.27% and 34.68%, respectively.
  • 30-day 25-delta skew (C-P) for BTC remains positive at 2.05% while ETH sits at -2.86%.
  • The futures market witnessed $60.60M worth of liquidations, with longs representing 54.10% of the total.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On

18.11%

SOL

dYdX

Bybit

14.32%

ETH

dYdX

Binance

9.25%

DOGE

dYdX

Binance

Source: @CexyArbBot Telegram Bot

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.


In the recent 24-hour analysis, BTC's Implied Volatility (IV) has dipped further. The 7-day IV now is at 32.76%, which matches the 30-day IV, which sits at 34.83%, possibly impacted by Tesla holding onto its sizable Bitcoin bags in the third quarter, suggesting that the company has a long-term bullish outlook on the token, stabilizing market sentiments.

Turning now to term structures, BTC and ETH continue to underscore a contango structure, with minimal changes on the curve over the last 24 hours. Within the BTC spectrum, both the short-term and long-term tenors experienced a slight decline. This movement indicates that investors are currently anticipating a relatively stable phase for BTC, with reduced expectations of near-term volatility.

Diving into the skew dynamics, the 30-day and 7-day 25-delta (C-P) skews, the 30-day skew has fallen to 2.05%, while the 7-day skew slightly decreased to 1.80%. This suggests that options investors may be hedging their long exposures in the market, while maintaining an overall bullish outlook on BTC.

Based on @Paradigm's data through US Session Hours yesterday, notable BTC option movements included the acquisition of a 2025x 29-Dec-23 34000 call calendar and a 425x 3-Nov-23 30000 BTC call, both bought. For ETH, there was a transaction of a 2750x 3-Nov-23 1450 ETH put, which was sold.

Crypto Technical Analysis

On the daily chart for BTC, the cryptocurrency is actively trading near the $28.2K mark, neatly enveloped within the Bollinger Bands. This position suggests a heightened potential for upcoming price volatility, especially considering that Bitcoin recently experienced its tightest weekly Bollinger Band squeeze. The BB width (BBW) plummeted to a low of 0.20 on the weekly chart, a significant contraction that matches levels previously seen before volatility spikes in November 2018 and October 2016. Currently, the 20-day SMA is positioned around $27.6K, potentially acting as immediate support. If BTC were to break this threshold, we might see it test the $25.6K support. For bulls, resistance could emerge near the upper Bollinger Band, estimated at around $32K. The RSI, meanwhile, sits at 61.01, nearing the overbought territory, and displays a variable trend over recent months.

On the daily ETH chart, ETH actively trades near the $1.55K threshold, delicately positioned within a discernible descending wedge pattern — a formation often regarded as a bullish reversal indicator when spotted in downtrends. A decisive breach below the current level could see the price targeting the next support zone around $1.4K, representing a drop of roughly 9.7% from the current position. In contrast, should buying pressure intensify, an immediate resistance is anticipated at $1.7K. Meanwhile, the RSI registers at 42.42, indicating a neutral momentum, but with a recent dip hinting at increased bearish undertones.

Access institutional-grade commentary on TradFi × Crypto markets

By Treehouse Research

Daily Readings

TradFi

Crypto

Deal Flow

Yours sincerely,
Treehouse Research 🌳