BTC

ETH

S&P 500 Futures

$87,838.50

$3,240.75

$6,004.50

(-0.97%)

 (-2.71%)

(-0.34%)

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

GM 🌳

Welcome to the TRHX Pulse newsletter (formerly Treehouse Daily), where TRHX delivers your daily dose of financial news and insights for free! We believe you'll find it both informative and valuable.

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

October 2024 Market Recap

You can also access our research articles on the Bloomberg Terminal with the command “NH TRH < GO >"!

Our Daily View

What We Are Covering Today

  • Trump’s hawkish cabinet picks signal tougher U.S. stance on China; Xi faces pressure over worker security abroad (More in Macro & TradFi)
  • Justin Drake proposed the ‘Beam Chain’ to overhaul Ethereum’s consensus layer; MARA misses Q3 revenue forecasts despite stock surges (More in DeFi & CeFi)
  • Rise in wallets holding under 100k DOGE while whale wallets decline; Surge in CEX trading volume, recording one of the largest volume since March (More in On-Chain)
  • BTC’s 7-day and 30-day IV declines but remain elevated; BTC’s term structure remains in backwardation (More in Crypto Derivatives)
  • BTC finds resistance at 88K; ETH stalls near 3.5K, signaling potential consolidation (More in Crypto Technical Analysis)

Macro & TradFi

Donald Trump’s recent cabinet appointments signal a significantly tougher stance on China, with key selections indicating a hawkish approach. He has appointed Congressman Mike Waltz, a strong advocate of viewing China as an "existential" threat, as his national security adviser, and is expected to nominate Senator Marco Rubio as Secretary of State, both of whom are known for their firm views on China. Elise Stefanik, a vocal critic of Beijing, has been tapped for the role of UN ambassador. These appointments have been welcomed by China hawks who believe a more assertive U.S. policy is necessary to counter China's military build-up, technological ambitions, and human rights abuses. Waltz’s stance emphasizes "peace through strength," echoing Ronald Reagan’s doctrine, and underscores the importance of deterrence in the Indo-Pacific, particularly regarding Taiwan. Additionally, Trump announced that Elon Musk and Vivek Ramaswamy would lead a “Department of government efficiency”, a new effort to “Dismantle bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies”. 

Meanwhile, Chinese President Xi Jinping faces increasing pressure to protect Chinese workers abroad, particularly following a recent bomb attack in Pakistan by separatists, which killed two Chinese engineers. The China-Pakistan Economic Corridor (CPEC), a $62 billion flagship of Xi’s Belt and Road Initiative, has been repeatedly targeted by the Balochistan Liberation Army, exposing vulnerabilities in Beijing's security arrangements in volatile regions. While Chinese investments in Pakistan are protected by a mix of local military forces and Chinese private security, Pakistan’s ban on foreign armed security contractors complicates protection efforts. Calls are growing within China for more control over security arrangements abroad, with suggestions that Chinese private security companies should play a larger role, despite legal restrictions and Beijing's reluctance to expand the military role of private contractors. 

U.S. equities closed lower on Tuesday as investors took profits following the recent rally. The Dow Jones Industrial Average led the losses, declining 0.86%, while the S&P 500 and Nasdaq slipped 0.29% and 0.09%, respectively. Tesla dropped 6.1% as traders locked in profits after the recent post-election rally supported by CEO Elon Musk’s endorsement of Trump. Rising global inflation, with increasing wholesale prices in Japan and UK grocery inflation, has added to concerns ahead of key U.S. economic data releases. Investors are closely watching the U.S. CPI report on Wednesday, 13 November, and Retail Sales data on Friday, 15 November, both at 21:30 SGT, as indicators of inflationary pressures.

DeFi & CeFi

  • Ethereum Researcher Justin Drake proposes consensus layer overhaul
  • MARA misses Q3 revenue forecast
  • Canary Funds filed an application with the SEC for an HBAR ETF
  • BNB Chain receives a $10M investment from Google Cloud
  • Bitwise launches first Aptos staking ETP
  • Coinbase launches COIN50 index to be the S&P 500 in crypto

At Ethereum's Devcon in Bangkok, Justin Drake, a prominent Ethereum researcher, unveiled his proposal for a significant overhaul of Ethereum's consensus layer, dubbed "Beam Chain." This upgrade seeks to bundle various high-impact changes into one package, focusing on improvements like faster block production, enhanced finality (making blocks immutable faster), and deeper integration of zero-knowledge cryptography. The Beam Chain aims to address Ethereum's technical debt, maximize transaction efficiency, and prepare the network for future advancements, while potentially paving the way for Ethereum's next major growth phase. 

In other news, MARA Holdings, formerly Marathon Digital, reported disappointing Q3 earnings, with sales of $131.6 million falling short of the expected $151.6 million. The company posted a quarterly loss of $0.34 per share, matching consensus estimates. MARA mined 2,070 BTC and purchased an additional 6,210 BTC, bringing its holdings to 26,747 BTC as of October 31. The company also raised funds through a $300 million offering of convertible senior notes, using the proceeds to buy Bitcoin at an average price of $59,500 per BTC. Despite missing revenue expectations, MARA's stock has gained 42% in the past week, driven by post-election optimism.

On-Chain

In an on-chain analysis by Santiment, in the past four weeks, Dogecoin has seen a surge in retail interest, with 74,885 new wallets holding less than 100,000 DOGE. Conversely, large holders—shark and whale wallets—have shown a net decline of 350 during this period. However, in the past few days, 108 large wallets have returned, contributing to a price rally that pushed DOGE above $0.40 for the first time in over three years. The mixed activity suggests heightened speculative interest from retail investors, while larger holders are selectively re-entering, likely eyeing short-term profit opportunities. 

In another analysis by Cryptoquant, during and after the recent U.S. presidential election, crypto exchange trading and inflow activity surged to the highest levels since March, reflecting renewed investor engagement. Both BTC and USDT inflows into exchanges spiked significantly, with Binance taking the lead, receiving $7.7B in USDT and 46,000 BTC over a few days. Coinbase also saw substantial activity, receiving $4.3B in USDT and 44,000 BTC, primarily driven by U.S.-based participants. The increased USDT on exchanges has bolstered liquidity, enabling more active trading conditions. In addition, the perpetual futures market experienced a record weekly trading volume of $1.1T, with Binance again capturing the largest share, accounting for 43% of this volume. OKX, Bitget, and Bybit also contributed notably to the spike in trading volume. The influx of capital and heightened trading activity indicates stronger interest from larger investors and speculators.

Derivatives

  • The funding rate for BTC and ETH remained positive.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH decreased to 57.98% and 64.43%, respectively.
  • The 30-day 25-delta skew (C-P) for BTC and ETH decreased to 2.48 and 2.66, respectively.
  • The futures market witnessed $818.13M in liquidations over the past 24 hours, with longs representing 65.70%.

Net Annualized APR

Perp (USDT pair)

Long on

Short On

20.98%

XRP

Bybit

OKX

18.56%

BNB

Binance

OKX

16.13%

XRP

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.

BTC’s 7-day IV declined significantly to 58.09 while the 30-day IV experienced a more gradual decline to 56.00. The decrease in IV meant that investors who bought short term options earlier in the week were exercising their options given the realized volatility over the past day. However, IV remains elevated as investors anticipate the US CPI data which will be released tomorrow, along with PPI and a Chair Powell speech on Thursday.

BTC’s IV declined across the curve as traders exercised options; however, the term structure remains in backwardation, reflecting speculators' anticipation of potential surprises from this week’s key macroeconomic data releases.

The BTC 25-delta 7-day skew experienced significant volatility over the past day, declining to negative levels before recovering to a positive value of 1.63. In contrast, the 30-day skew declined with less volatility to 2.48, which shows that over the short to mid-term, traders appear to adopt a cautiously bullish sentiment on BTC’s price action.

Lastly, @Paradigm top structures highlighted a mix of custom strategies for BTC and ETH. For BTC, key trades involved the sale of a 800x 27-Dec-24 $86K/$90K Bull Risk Reversal and a 662x 29-Nov-24 $90K/$100K Call Spread, and the purchase of a 500x 13-Nov-24 $88.5K Call. In ETH, substantial positions included the purchase of a 10000x 27-Dec-24 $3.8K Call and 3000x -1.00-Put-27 Dec 24 $2.7K +1.00-Call-27 Dec 24 $4K -1.00-Call-27 Dec 24 $4.5K Custom, and the sale of a 6750x 28-Mar-25 $3.8K Call.

Crypto Technical Analysis

On the 4-hour chart, BTC recently encountered resistance around the 88K level, briefly pulling back to the 85K mark before showing signs of recovery, moving back toward 88K. This price behavior indicates that BTC is meeting some selling pressure near the upper resistance level, following a strong upward trajectory that began in late October. The 50, 100, and 200 SMAs are in a bullish alignment below the price action, supporting the upward trend, with the nearest significant support level around 69.8K, a downside of 20.7%. The RSI for the 4-hour timeframe is currently hovering around 72, slightly in overbought territory, suggesting potential consolidation or a minor pullback as BTC digests recent gains.

On the 4-hour chart, ETH appears to be losing momentum just before approaching the resistance level at 3.5K, with recent price action indicating a potential stalling. However, the current pullback reflects some profit-taking and hesitation, with ETH stabilizing around 3.28K after a rally. The immediate support levels are around 2.95K and further support near 2.75K. The RSI is currently around 63, having retreated from overbought territory, which may support a period of consolidation or a mild pullback before any further upside attempts. If ETH manages to gather enough momentum to test and clear the 3.5K resistance, it could open the path for continued bullish movement. Conversely, failing to break through this area might trigger additional consolidation or a retest of lower support levels mentioned above.

Access institutional-grade commentary on TradFi × Crypto markets

By TRHX Research

Daily Readings

TradFi

Crypto

Deal Flow

Yours sincerely,
TRHX Research (Formerly Treehouse Research) 🌳