BTC

ETH

S&P 500 Futures

$97,464.00

$3,703.00

$6,044.50

(+2.10%)

 (+4.04%)

(+0.40%)

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

GM 🌳

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November 2024 Market Recap

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Our Daily View

What We Are Covering Today

  • Trump threatens BRICS with 100% tariffs; China’s bond market struggles with deflation (More in Macro & TradFi)
  • A41 joins Treehouse Protocol to strengthen DOR panel; New York regulator set to approve Ripple’s Stablecoin (More in DeFi & CeFi)
  • BTC's Sell-side Risk Ratio signals market risk; Realized price band suggests $146K will be cycle peak (More in On-Chain)
  • BTC's implied volatility stabilizes post-Thanksgiving; Front-end IV rises amid asset manager support (More in Crypto Derivatives)
  • Both BTC and ETH moved higher over the weekend, with BTC potentially making another attempt at the $100K resistance (More in Crypto Technical Analysis)

Macro & TradFi

President-elect Donald Trump escalated his trade war rhetoric on Saturday, threatening 100% tariffs on imports from the BRICS nations—Brazil, Russia, India, China, and South Africa—unless their governments pledge not to create a new currency to challenge the US dollar. This threat extends to recent BRICS expansion members, including Iran, Saudi Arabia, and the UAE, displaying Trump's commitment to defending the dollar's status as the global reserve currency. Trump, posting on his Truth Social platform, demanded a commitment from BRICS countries not to pursue alternatives to the dollar, warning they would face economic retaliation and lose access to the US market. This comes amid growing calls within the bloc, particularly from Russia and China, to reduce reliance on the dollar, with proposals for a BRICS currency discussed at recent summits. Russian President Vladimir Putin has accused the West of "weaponizing" the dollar through sanctions, which he claims undermine global trust in the currency. 

In other news, China's long-term bond yields have fallen below Japan's for the first time, signaling investor concerns that the world's second-largest economy may face entrenched deflation similar to Japan's decades-long stagnation. The yield on China's 30-year government bonds has dropped from 4% in 2020 to 2.21%, while Japan's equivalent yield rose to 2.27%, reflecting Tokyo's efforts to normalize monetary policy after years of deflationary pressures. Beijing has cut interest rates to stimulate its faltering economy, prompting domestic investors to flock to safer assets. Adding to the strain is US President-elect Donald Trump’s plan to impose additional tariffs on Chinese exports, which could exacerbate growth challenges. Beijing has intervened in its bond market, attempting to push up long-term yields and counteract pessimism about growth prospects. However, the government’s efforts, including its largest monetary stimulus since the pandemic and a $1.4T fiscal package, have failed to stem the downward pressure on yields as investors retreat from volatile stock and property markets. Without significant structural reforms, such as reducing investment and boosting domestic consumption, China's bond market may remain trapped in a low-yield environment, mirroring Japan’s economic struggles of the past.

On Friday, the Dow Jones Industrial Average gained 0.42%, while the S&P 500 rose 0.56%, both reaching new record closing levels. The Nasdaq Composite added 0.83%, finishing just shy of its all-time high. Large-cap technology stocks led the gains, with Nvidia climbing 2.2% and Tesla surging 3.7%. Other tech giants, including Apple, Microsoft, Amazon, and Meta Platforms, advanced, while Alphabet posted a slight decline. The semiconductor sector performed particularly well, with the PHLX Semiconductor Index up 1.5% as Lam Research, KLA Corp., Qualcomm, Marvell Technology, Applied Materials, and Broadcom all posted solid gains. The yield on 10-year Treasurys fell to 4.18%, the lowest level this month, reflecting tempered expectations about the Federal Reserve's rate cuts. Investors' focus is now on ISM Manufacturing PMI numbers released tonight at 23:00 SGT, JOLTs job opening news on December 3 at 23:00 SGT, and Non-Farm Payrolls and Unemployment Rate data on December 6 at 21:30 SGT. 

DeFi & CeFi

  • A41 joins Treehouse Protocol to strengthen DOR panel
  • New York regulator set to approve Ripple’s Stablecoin
  • Ripple's XRP token flips Solana's market capitalization
  • Pump.fun weekly revenue drops 66% after livestream controversy
  • Coinbase resolves Solana transaction delays, admits internal missteps
  • Hyperliquid's HYPE surpasses Aave in market cap, claims nearly half of decentralized perpetual swaps volume

A41, a leading blockchain infrastructure provider specializing in staking services, has joined Treehouse Protocol’s Decentralized Offered Rates (DOR) panel as a panelist for the Ethereum Staking Rate (ESR). A41, known for its extensive capabilities across 17 blockchain networks, including Ethereum, Solana, and Cosmos Hub, manages over $2.5B in staked assets with a 99.9% effective uptime. This makes A41 a key player in enhancing network validation and empowering delegators with reliable staking services. A41’s deep expertise, coupled with its support for various innovative protocols like Aptos, Lido, and Eigenlayer, positions the company to significantly improve the accuracy and reliability of the ESR Curve within DOR. With A41’s involvement, Treehouse Protocol strengthens its mission to deliver transparent and decentralized fixed-income solutions, advancing the stability and reliability of DeFi markets. A41’s contributions will play a pivotal role in ensuring that fixed income becomes a foundational element in DeFi, enhancing how participants engage with the market.

Elsewhere, Ripple Labs is expected to receive approval from the New York Department of Financial Services (NYDFS) for its overcollateralized dollar-pegged stablecoin, RLUSD, with a potential launch as early as December 4, 2024. This move comes after Ripple's announcement in April 2024 of the stablecoin’s development, aimed at competing with USD Coin (USDC) and Tether (USDT). Ripple's forecast for the stablecoin market suggests a $2T market capitalization by 2028, indicating significant growth potential for multiple stablecoin issuers. The company has already begun testing RLUSD on the XRP Ledger and Ethereum mainnet, with future expansion plans to other blockchains. Ripple also committed to conducting regular third-party audits of the collateral backing RLUSD and providing monthly reports to ensure transparency. Ripple's exchange partners for RLUSD include Uphold, Bitstamp, Bitso, MoonPay, Independent Reserve, CoinMENA, and Bullish. CEO Brad Garlinghouse reiterated Ripple's commitment to using XRP to enhance liquidity for RLUSD and to comply with regulatory standards under its New York Trust Company Charter. The approval and launch of RLUSD could catalyze growth and innovation in the stablecoin market, enhancing the use of digital assets in real-world applications like cross-border payments, and potentially leading to more favorable regulatory environments for future blockchain-based financial products.

On-Chain

According to on-chain analyst Checkmate, the Sell-side Risk Ratio provides a critical perspective on expected market volatility, acting as a tool to identify trend exhaustion, instability, and equilibrium levels. In Bitcoin, equilibrium is fleeting, influenced by factors such as price history, mining and trading activity, capital inflows, and macroeconomic forces like regulations and liquidity shifts. The Sell-side Risk Ratio metric helps pinpoint when markets approach equilibrium, signaling potential disruptions ahead and offering valuable insights for anticipating volatility and market shifts.

According to CryptoQuant, Bitcoin’s potential peak price target stands at $146K, derived from its realized price valuation metric. This valuation represents an aggregate measure of the price at which all coins were last moved on the blockchain, effectively capturing the market's cost basis. Historically, this price band has reliably marked Bitcoin's cycle tops, as seen during the April–May 2021 bull run. Such levels often indicate overvaluation phases where profit-taking and corrections are likely, providing a critical reference point for investors and analysts tracking market cycles.

Derivatives

  • The funding rate for BTC and ETH remained positive.
  • Deribit Implied Volatility Index (DVOL) for BTC remained flat at 57.46 while that of ETH rose to 74.59.
  • The 30-day 25-delta skew (C-P) for BTC rose to 3.65 while that of ETH rose to 6.11.
  • The futures market witnessed $573.16M in liquidations over the weekend, with longs representing 50.29%.

Net Annualized APR

Perp (USDT pair)

Long on

Short On

17.00%

ADA

Bybit

OKX

14.15%

BNB

Binance

Bybit

12.41%

DOGE

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 at-the-money IV for 30-day contracts has remained relatively stable at 55.66. The 7 day IV rose to 53.23 over the weekend but still fell short of the 30 day IV. BTC’s IV recovery may be due to the end of the Thanksgiving holiday, where we are seeing a return of US option traders.

BTC's term structure shows that IV has risen on the front end of the curve, perhaps in anticipation of larger moves following support from notable asset managers like Cathie Wood, founder of Ark Investment Management LLC, who said she supports regulatory adjustments implemented after Trump returns to office, especially in cryptocurrency and AI.

ETH’s term structure reflects an anticipation of an altcoin season, as the altcoin season index trickles higher to 76/100. IV has risen across the curve and is in backwardation, with 1 day expiries having an IV of 75.

BTC has increased in the 30-day C-P skew over the weekend, rising to 5.08, while the 7-day skew has risen to 4.72, a stark contrast to last week, where it was in the negatives, indicating that the market expects bullish momentum to materialize soon.

Lastly, @Paradigm highlighted option flows last week emphasizing strategic positioning across both BTC and ETH. Key BTC trades included the purchase of 1275x 27-Dec-24 $100k Calls, 988x 27-Dec-24 $92k Straddles, and the sale of 650x 27-Dec-24 $95/$105k Call Spreads. Meanwhile, significant ETH trades featured the acquisition of 10250x 28-Mar-25 $4k/$5k Call Spreads and 10,000x custom structures involving 27-Dec-24 strikes at $4k, $4.5k, $4.8k, and $5.2k.

Crypto Technical Analysis

BTC edged higher over the weekend. On the 4-hour chart, the price has moved closer to the $99K resistance level, testing the all-time high once again. This level is expected to present significant resistance, and a breakout above it could propel BTC to $100K and potentially beyond. However, if the price is rejected at this level, it is likely to pull back to the $95K level, where horizontal support intersects with the lower trendline formed by local higher lows.

ETH, on the other hand, also saw a price increase over the weekend but remains within the ranges of the ascending channel, currently near its middle point, with no clear direction. If the price continues to rise, it will likely test the upper boundary of the channel near $3.9K. Conversely, if the price declines, support is expected at the lower boundary around the $3.6K level.

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TRHX Research (Formerly Treehouse Research) 🌳