BTC

ETH

S&P 500 Futures

$92,080.00

$3,111.50

$5,949.50

(+1.05%)

 (-1.46%)

(+0.55%)

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

GM 🌳

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October 2024 Market Recap

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Our Daily View

What We Are Covering Today

  • Global tensions escalate as Putin lowers nuclear use threshold; Japan's export growth faces tariff risks (More in Macro & TradFi)
  • Coinbase to delist wrapped Bitcoin; PayPal partners with Xoom for cross-border stablecoin payments (More in DeFi & CeFi)
  • Bitcoin MDIA shows potential for long-term bull market; ETH holders maintain confidence despite recent price surges (More in On-Chain)
  • BTC's IV slightly dips but stays high; Positive BTC skew persists amid geopolitical tensions (More in Crypto Derivatives)
  • BTC shows bearish divergence after reaching $93.8K ATH; ETH in a consolidation phase (More in Crypto Technical Analysis)

Macro & TradFi

Russian President Vladimir Putin has updated Russia's nuclear doctrine, lowering the threshold for nuclear weapon use to include retaliation against non-nuclear states supported by nuclear-armed allies. This shift follows Ukraine's first confirmed strike on Russian territory using U.S.-supplied ATACMS missiles, authorized by the Biden administration. The Kremlin claims these changes align with the current geopolitical landscape, intensifying its warnings of nuclear escalation if Western-supplied weapons are used against Russia. Experts suggest this move is both a response to U.S. policy and a strategic maneuver to pressure Western leaders, with implications for escalating the conflict or forcing negotiations on Moscow's terms.

In other news, Japan's exports rose 3.1% year-on-year in October, exceeding forecasts and reversing a September decline, driven by stronger demand for semiconductor equipment in China. Imports also edged up by 0.4%, resulting in a trade deficit of ¥461.2 billion, larger than expected. While domestic demand shows signs of recovery, supported by rising wages and stronger private consumption, the potential implementation of significant U.S. tariffs under President-elect Donald Trump poses risks to Japan's trade-dependent economy. Analysts warn these tariffs could dampen GDP growth and disrupt international trade dynamics, overshadowing Japan's tentative economic recovery.

U.S. stocks showed mixed performance as geopolitical tensions escalated with Russia's war in Ukraine entering a new phase. The S&P 500 gained 0.40%, driven by a rally in Nvidia, 4.89%, ahead of its Q3 earnings, while the Nasdaq rose 0.71%, and the Dow dipped 0.28%. Walmart also contributed to gains, rising by 3.00%, raising its annual outlook on strong demand from cost-conscious consumers. Politically, President-elect Donald Trump announced key appointments, including Howard Lutnick as commerce secretary and Mehmet Oz as Medicare chief. Markets remain focused on Nvidia's Q3 results, expected Thursday, with options pricing an implied one-day move of +/- 8.23%.

DeFi & CeFi

  • Coinbase to delist wrapped Bitcoin
  • PayPal partners with Xoom to enable cross-border stablecoin payments
  • Brazil advances CBDC technology with new cross-chain pilot using Chainlink’s CCIP
  • Dueling 'Eliza' AI Tokens Boom and Zoom in Frenzied Trading
  • Paxos acquires Membrane Finance for EU stablecoin expansion

Coinbase has announced that it will suspend trading of Wrapped Bitcoin (WBTC) on December 19, 2024, citing failures to meet the exchange's listing standards. As of now, Coinbase has already halted market trading of WBTC, allowing only limit orders. The suspension will apply to Coinbase.com (Simple and Advanced Trade), Coinbase Exchange, and Coinbase Prime. However, users will still be able to access and withdraw their WBTC funds at any time. This decision follows controversies around WBTC's custodian, BitGo, granting partial control of its multi-signature wallet to the Hong Kong-based crypto exchange BiT Global, where the involvement of Justin Sun in this arrangement raised concerns over the potential misappropriation of collateral.

In other news, PayPal has partnered with Xoom to enable cross-border payments using its stablecoin, PayPal USD (PYUSD), as part of its strategy to expand access to the stablecoin in Asian and African markets. The collaboration allows PayPal to settle cross-border transactions outside traditional banking hours. Xoom, along with partners Cebuana Lhuillier and Yellow Card, will handle the disbursement of PYUSD. Xoom aims to enhance the efficiency of money transfers by leveraging stablecoins, with PayPal USD designed to seamlessly integrate into Web3 applications, wallets, and cryptocurrency exchanges. 

On-Chain

According to Santiment’s analysis, while Bitcoin has reached a new all-time high, touching $93,850 on Coinbase, whale transactions and retail FOMO could cause short-term volatility with long-term indicators for Bitcoin and the broader crypto market remains strong. The Mean Dollar Invested Age (MDIA) line, which shows the age of tokens circulating in wallets, is declining, indicating that dormant coins are returning to circulation—an important sign in long-term bull markets. This trend, especially since October 2020, suggests continued market strength. Keep an eye on the MDIA line as weeks pass to gauge whether the current bull market is sustainable.

In another on-chain analysis by CryptoQuant, despite Ethereum's recent price surge, retail investors are holding onto their positions instead of taking profits, reflecting confidence in the long-term potential of ETH. The current easing of market risks, combined with the market boost from the 'Trump Trade,' supports this behavior, suggesting that many investors still perceive ETH as undervalued. Additionally, low inflows to major exchange deposit addresses like Binance and OKX, alongside a SOPR close to 1, show that investors are not liquidating their holdings for profit-taking. These signals point to a strong "buy and hold" sentiment, reinforcing the belief that ETH's current price remains attractive and that a further rise to the $4K range is likely in the near term, provided it stays above $2.8K.

Derivatives

  • The funding rate for BTC and ETH remained positive.
  • Deribit Implied Volatility Index (DVOL) for BTC remained flat at 58.75 while that of ETH decreased slightly to 64.51.
  • The 30-day 25-delta skew (C-P) for BTC spiked to 4.21, while that of ETH lowered to 2.37.
  • The futures market witnessed $293.33M in liquidations over the past 24 hours, with longs representing 62.41%.

Net Annualized APR

Perp (USDT pair)

Long on

Short On

23.50%

ADA

Bybit

OKX

18.85%

SOL

Binance

OKX

18.07%

ADA

Binance

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.

IV for BTC has dipped slightly, with 7-day at-the-money IV decreasing to 58.00 and 30-day ATM IV to 56.81. This decline could reflect a lack of BTC-specific catalysts on the 30-day horizon. However, these levels remain elevated, sitting in the 71st percentile of Deribit's DVOL index, indicating that IV has been lower than the current level 71% of the time over the past year.

BTC's term structure remains in backwardation, though IV has dipped significantly for the front end of the curve, which suggests that a substantial number of call options may have been exercised following the recent increase in BTC’s spot price to 93K. However, IV has risen on the longer end of the curve, indicating traders anticipate increased volatility next year, which aligns with potential market-moving events, including Donald Trump assuming the presidency and the possible disbursement of BTC from Mt. Gox.

Skew has remained positive, with the 7-day Call-Put skew at 4.21 and the 30-day Call-Put skew at 4.05, even amid heightened geopolitical tensions following Ukraine's long-range missile attacks on Russia. Historically, BTC has experienced rallies during such geopolitical events, as it is often viewed as a potential store of value and a tool for liquidity transfers in uncertain times.

Lastly, @Paradigm highlighted BTC positions that suggest expectations of low volatility or specific price ranges, and ETH positions indicating a bearish sentiment.  Key BTC trades included the purchase of 1,000x 27-Dec-24 $95K/$105K/$110K/$115K Call Condors and 460x 27-Dec-24 $95K/$105K Call Spreads, alongside the sale of 750x 27-Dec-24 $70K Calls. Meanwhile, ETH activity featured the purchase of 1,500x 29-Nov-24 $3K Puts.

Crypto Technical Analysis

On the 4-hour chart, the price of BTC recorded a new all-time high of $93.8K and is currently trading at $92K, exhibiting a bullish divergence pattern with the price movement making a series of higher highs, while the RSI is forming lower highs. The Bollinger Bands are expanding, suggesting higher volatility, and the price is near the upper band, signaling a possible breakout if Bitcoin can maintain its momentum. However, if bullish momentum were to weaken, it could face a pullback towards the middle or lower band, with the support zone around $87.1K. The bearish divergence between Bitcoin’s price and the RSI indicates weakening bullish momentum despite the price reaching new highs, signaling a potential pullback or reversal.

On ETH’s 4-hour chart, the price is showing signs of consolidation at around $3.1K. This resistance level at $3.3K is a critical area to monitor, as it has previously acted as a barrier to further upward movement, while the support level is at $2.8K. The narrowing of the Bollinger bands confirms the period of consolidation. If Ethereum breaks through the upper band, it may experience additional upward momentum, but if it fails to break through resistance, we may see a period of consolidation or a retracement to support levels. The RSI is currently at 47.61, indicating that there is no clear trend direction at this point, as the buying and selling pressures are relatively balanced.

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