🌳 Trump’s Hush Money Trial Begins; Biden Calls For New Energy Tax For The BTC Mining Industry

GM Treehouser 🌳

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Our Daily View

What We Are Covering Today

• Trump’s trial opens with allegations of corrupting the 2016 US election; Oxford Economics forecasts global food prices to decline in 2024 (More in Macro & TradFi)
• Biden calls for a 30% tax to be imposed on BTC mining energy used; Stacks launches new upgrade (More in DeFi & CeFi)
• BTC whale withdrew 800 BTC to hot wallet; Wallets holding at least 1M XRP tokens have been increasing the past 6 weeks (More in On-Chain)
• BTC funding rates turn negative; IVs hovering near neutral zone (More in Crypto Derivatives)
• BTC broke the $65K resistance and hovers around the $67K mark; ETH sees a similar recovery although at a slower pace (More in Crypto Technical Analysis)

Macro & TradFi

The criminal trial against former President Donald Trump began with prosecutors accusing him of breaking the law and corrupting the 2016 election to cover up sexual encounters with a porn star and a Playboy model, while Trump's defense lawyer argued that he committed no crime. The prosecution's first witness, former National Enquirer publisher David Pecker, testified about a "catch and kill" scheme to suppress unflattering stories about Trump. Trump is charged with falsifying business records related to a $130,000 payment to porn star Stormy Daniels in 2016. The trial is viewed as the least consequential of Trump's four criminal prosecutions, but a guilty verdict could impact his candidacy in the upcoming election.

Meanwhile, according to Oxford Economics, global food prices are forecasted to decline in 2024, offering relief to consumers. An abundant supply of wheat and maize is driving this trend, with bumper harvests leading to a steady drop in prices. While rice prices have risen due to export restrictions and poor harvests in India, wheat and maize prices have seen significant declines. However, risks such as adverse weather conditions could impact future prices, with forecasts suggesting a gradual rise in the second half of 2024.

Lastly, U.S. stocks rebounded on Monday as investors pinned their hopes on a flurry of upcoming corporate earnings reports to lift the markets out of a recent downturn. The Nasdaq Composite climbed 1.1%, the S&P 500 gained 0.9%, and the Dow Jones Industrial Average advanced 0.7%. Verizon (VZ) kicked off the week's earnings announcements with better-than-expected profits, despite revenue falling short. This week's earnings lineup includes Tesla (TSLA) and Visa (V) on Tuesday, Meta (META) and Boeing (BA) on Wednesday, and Microsoft (MSFT) and Alphabet (GOOGL) on Thursday. In individual stock movements, financials led the charge, with Goldman Sachs (GS) and JPMorgan Chase (JPM) making notable gains, while Verizon (VZ) saw a decline after its earnings report. United Airlines (UAL) soared following a strong first-quarter report, while Nvidia (NVDA) rebounded after Friday's significant drop. Tesla (TSLA) faced pressure after announcing price cuts in key markets.

CeFi & DeFi

• Biden calls for new measures regarding BTC mining
• Stacks launches new “Nakamoto” update
• Two SEC lawyers resign following abuse of power accusations
• RunesDEX secures $2M in seed round
• Altcoin lending platform launches on Base
• Ledger Live to offer swaps and instant buys

President Biden has reintroduced a contentious proposal to impose a 30% excise tax on electricity used for Bitcoin mining in the U.S., as part of his fiscal 2025 budget proposal. This tax, known as the Digital Asset Mining Energy tax (DAME), aims to raise $3.5 billion over ten years. However, it has faced fierce opposition from industry leaders and politicians, including Senator Cynthia Lummis, who argues it could devastate the American Bitcoin mining industry. Critics claim that the tax could drive the industry overseas to regions with lower environmental standards, undermining efforts to maintain cleaner energy practices in the sector. The proposal reflects ongoing global trends where several countries have moved to restrict or regulate cryptocurrency mining due to environmental concerns.

In other news, BTC L2 Stacks has begun implementing its largest update, "Nakamoto", which is set to fully launch by late May 2024. This significant upgrade aims to alleviate congestion by decoupling Stacks’ block production from Bitcoin’s, allowing for a higher transaction throughput. The revised system introduces a new block production mechanism via an updated proof-of-transfer consensus algorithm. Initially, this phase involves practice setups with new signers validating transaction "tenures". Alongside technical changes, this overhaul has immediate practical implications for Stacks users: updated wallets are advised for all and staked STX tokens have been unlocked for re-staking in Nakamoto-compliant pools expected to be available soon. This update has also stimulated a 16% increase in STX token value, placing it among the top 25 by market capitalization.

On-Chain

On-chain data from Lookonchain revealed that a whale withdrew 800 BTC worth $52.84M from Binance to their hot wallet over the past 24 hours. Previous on-chain data indicates that he has a history of selling 4,556 BTC, totaling $302.3 million, over a brief period of 8 days, spanning from March 15 to March 22. This recent decision by the trader to move his BTC from a centralized exchange to their hot wallet could indicate their desire for increased self-custody or potential to use BTC for investment purposes not available on centralized exchanges.

On the other hand, an analysis by Santiment shows that while the price action of XRP increased by 6% today, the number of wallets holding at least 1M XRP tokens has increased by 3.1% over the past 6 weeks, marking a potential all-time high of number of wallets holding 1M XRP tokens. This development could signal a shift in investor sentiment with potential increased demand or market speculation given the upcoming XRP lawsuit against the SEC, where investors should be wary.

Crypto Derivatives

• Funding rates remain positive for ETH and go negative for BTC.
• Deribit Implied Volatility Index (DVOL) for BTC and ETH remain flat at 69.31% and 74.07%, respectively.
• The 30-day 25-delta skew (C-P) for BTC increased to 1.41%, while ETH dropped slightly to -2.06% in the negatives.
• The futures market witnessed $102.87M in liquidations, with shorts representing 61.3%.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

BTC's implied volatility chart portrays a coherent narrative of market adjustment. The 7-day IV demonstrates a notable decline, suggesting that even as BTC's price ascends toward $67K, traders are not anticipating sharp short-term movements, pointing to a confident market absorbing the recent gains. Concurrently, the 30-day IV's continued downward trend echoes this sentiment, reinforcing the notion that the market has reached a consensus on the longer-term effects of the halving. Together, these indicators reflect a market recalibrating its expectations, acknowledging the upward price action while settling into a new phase of consolidation.

Meanwhile, the term structure continues to display its contango shape from yesterday. However, there has been a noticeable decline in IVs across the curve, especially prominent with longer-dated options contracts, suggesting an increasing certainty in BTC’s future price potentials.

The BTC 25-delta skew chart shows the 7-day skew hovering close to the neutral line, suggesting a more balanced market sentiment without a strong bias toward puts or calls. The 30-day skew remains slightly negative, indicating a modest preference for downside protection over the longer term, which could reflect residual caution among traders. Compared to yesterday's analysis, there's an apparent normalization in sentiment post-halving, as the market absorbs the recent bullish price movements and geopolitical developments. 

@Paradigm reported that notable BTC option trades included the sale of a 247x Iron Condor strategy with strikes between $60K and $72K, 225x 3-May-24 $70K Calls and 200x 27-Dec-24 $85K Calls. Meanwhile, 200x 31-May-24 $57K and $58K Puts were sold. ETH trading featured a purchase of 13,500x 26-Apr-24 $3,400 Calls, a sale of 1,500x custom structured 26-Apr-24 $3,200 Calls, and a sale of a 1,500x 31-May-24 $3,200 Straddle.

Crypto Technical Analysis

In technical analysis, BTC has continued its upward trajectory, staging a swift price recovery following the rapid decline in the previous week. Currently, BTC’s price has surpassed the $65K psychological resistance level and is hovering around the $67K zone. The immediate resistance can be observed near the $68.3K resistance zone, which has seen repeated tests since early March. If this level is breached, the next resistance lies at the $71K level as we approach the all-time high. Conversely, if BTC retraces to seek support, the nearest support level is at $60K, representing a descent of around 11% from its current price. The RSI is also approaching overbought territory, signaling a potential cooling off in bullish momentum.

Meanwhile, ETH is also undergoing a recovery phase, albeit at a slower pace than BTC. The current price of ETH is approaching the $3.25K resistance level, which, if breached, could indicate a significant potential upside, with the next resistance observed 12% away near the $3.65K level. While the RSI has seen an increase similar to that of BTC, but it hasn't approached the overbought threshold as closely. Conversely, if the price reverses and bears take control of the market, the immediate support remains at the $3K threshold, suggesting a potential decline of about 8%. Therefore, it’s crucial to monitor how ETH interacts with the current price zone as it could determine the market's short-term direction.

Access institutional-grade commentary on TradFi × Crypto markets

By Treehouse Research

Daily Readings

TradFi

• Trump trial opens with allegations he tried to ‘corrupt’ 2016 US election

• Cutting the Data Spigot Overseas Goes Beyond TikTok

• UnitedHealth paid ransom to bad actors, says patient data was compromised

• Oracle met with Senate aides about TikTok data storage after House ban passed

• Boeing expects slower production increase of 787 Dreamliner

• FTC sues to block Coach parent Tapestry's acquisition of Capri Holdings

• Mark Zuckerberg says Meta will offer its virtual reality OS to hardware companies

• Biden tells Zelenskyy US weapons will arrive ‘quickly’

• Oil Market Sees Iran Sanctions Having Muted Impact on Exports

• Hedge Funds Snap Up Japan Rates Traders in Bet on Comeback

• China’s Small Towns Boom as Megacities Lose Appeal With Brands

• China Wants Everyone to Trade In Their Old Cars, Fridges to Help Save Its Economy

• UK Exports Fewer Goods After Brexit, Tilting Economy to Services

• JPMorgan’s Kolanovic Says ‘Correction’ in US Stocks Isn’t Over

• High global food prices may finally see a bottom in 2024, says Oxford Economics

Crypto

• SEC seeks $5.3B judgment against Terraform Labs and Do Kwon

• Biden is asking Congress to kill the American Bitcoin mining industry

• SEC lawyers resign after ‘gross abuse’ of power in crypto case — Report

• Crypto investment products see outflows for second consecutive week — CoinShares

• Fostering crypto adoption: Secure, simplified digital wallet hits the market

• Lummis-Gillibrand stablecoin bill is beneficial for issuers and could 'spark M&A': TD Cowen

• Seamless Protocol launches altcoin-specific DeFi lending market on Base

• Mt. Gox creditors report bitcoin and bitcoin cash payment update on claims system

• ZKasino Users Plead for Refunds as $33M of Bridged Ether Sent to Lido

• Crypto Exchange Woo X Claims a First With Tokenized Treasury Bills for Retail Investors

• Sam Bankman-Fried Agrees to Help FTX Investors Go After Celeb Promoters

• Binance Exec's Wife Denies Report of Extradition to Nigeria

• Thailand to Block Access to 'Unauthorized' Crypto Platforms

• Stacks Begins 2-Step Rollout of Major ‘Nakamoto’ Overhaul

• Celo Chooses Optimism, Concluding Bake-Off Among Layer 2s

Deal Flow

• Shiba Inu Fetches $12M Investment in a Token Sale to Build Privacy-Focused Blockchain

Yours sincerely,
Treehouse Research 🌳