BTC

ETH

S&P 500 Futures

$60,510.50

$2,371.25

$5,758.50

(-0.93%)

 (-1.41%)

(+0.20%)

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

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September 2024 Market Recap

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Our Daily View

What We Are Covering Today

  • U.S. and G7 urge restraint in Israel conflict; China property bonds rally on stimulus (More in Macro & TradFi)
  • Visa launches tokenized asset platform for stablecoins; Grayscale expands with Aave fund (More in DeFi & CeFi)
  • BTC sees largest outflows from CEXs since Nov 22(More in On-Chain)
  • BTC's implied volatility rises amid geopolitical tensions; short-term option demand grows due to Fed uncertainty (More in Crypto Derivatives)
  • BTC remains unchained in technical indicators; ETH sees a minor recovery following another decline (More in Crypto Technical Analysis)

Macro & TradFi

The escalating conflict between Israel and Hezbollah, alongside tensions with Iran, poses significant risks for the global macroeconomic environment, particularly in terms of energy markets and geopolitical stability. Israel’s airstrikes in Beirut and the potential for retaliatory strikes against Iranian targets have heightened concerns about disruptions to oil supplies, which surged in response to President Biden’s comments about potentially targeting Iranian oil infrastructure. This could lead to volatility in global energy prices, further fueling inflationary pressures, especially if critical infrastructure in the Middle East is targeted. The conflict also risks broadening into a wider regional war, drawing in major global powers like the U.S. and potentially impacting trade routes, especially those involving energy. A full-scale escalation could strain global supply chains and increase uncertainty in financial markets. The situation underscores the importance of diplomatic efforts, as evidenced by the U.S. and G-7 nations urging restraint to avoid an uncontrollable escalation. 

Elsewhere, Chinese and global investors are showing renewed interest in offshore bonds from China’s struggling property sector, driven by recent government stimulus aimed at revitalizing the economy. Major developers like Vanke and Longfor have seen significant gains in bond prices following the announcement of the most aggressive stimulus measures since the pandemic. Even bonds of defaulted developers, such as Country Garden, have rebounded slightly. The broader market remains cautious, awaiting home sales data post-Golden Week to gauge the long-term impact of these policies on the sector’s recovery.

Lastly, U.S. stock indexes closed lower as investors remained cautious ahead of Friday’s highly anticipated September jobs report. The Dow Jones Industrial Average dropped 0.44%, the S&P 500 fell 0.17%, and the Nasdaq Composite diminished by 0.04%. Nvidia climbed 3.4% after CEO Jensen Huang cited "insane" demand for the company's upcoming AI chips. Meanwhile, other large-cap tech stocks, including Apple, Microsoft, Alphabet, and Amazon, declined, though Meta Platforms bucked the trend with a 1.7% gain, reaching a new all-time high. Tesla dropped 3.4% after announcing a Cybertruck recall, continuing its decline from the previous day when the company’s delivery numbers disappointed Wall Street. Constellation Brands fell 4.7%, leading the S&P 500’s decliners, following weaker-than-expected revenue results. Levi Strauss also saw a sharp 7.7% drop after reporting lower-than-expected revenue and cutting its sales outlook, as the company hinted at potentially selling its Dockers brand amid ongoing challenges. Weekly jobless claims data released Thursday met economists' expectations. Still, attention is now focused on the September unemployment rate and seasonally adjusted non-farm payrolls on 5 October 04:30 SGT, as investors look for signs of economic resilience and clues about the Federal Reserve's future interest rate cuts following its first rate reduction in four years last month.

DeFi & CeFi

  • Visa launches platform to issue stablecoins
  • Grayscale launches Aave fund
  • Zetrix brings digital ID verification to Chinese nationals abroad
  • OKX lists PayPal’s PYUSD stablecoin for trading amid supply fluctuations
  • PayPal, Ernst & Young settle first corporate payment via PYUSD stablecoin

Visa is launching the Visa Tokenized Asset Platform (VTAP), enabling banks to issue fiat-backed tokens such as stablecoins and tokenized deposits. The platform, currently in testing, will allow for token minting, burning, and transfers, with a full launch expected in 2025. A pilot test on Ethereum is set for next year. Visa's initiative aligns with the growing interest in stablecoins, as seen with offerings from companies like PayPal and Stripe, and aims to integrate blockchain technology into traditional banking operations.

Elsewhere, Grayscale has launched a new investment fund dedicated to Aave’s governance token, AAVE, giving qualified investors the opportunity to gain exposure to the popular DeFi platform. The Grayscale Aave Trust adds to the asset manager’s suite of single-asset crypto products, following its recent launches of trusts for Sky, Bittensor, and Sui tokens.

On-Chain

According to an on-chain analysis by CryptoQuant, Bitcoin has experienced the largest outflow from exchanges since November 2022. This trend is confirmed by the 30-, 50-, and 100-day moving averages, all indicating a significant increase in withdrawals. The surge in Bitcoin being moved off exchanges suggests that holders are adopting a more long-term accumulation strategy, reducing available supply on exchanges and potentially signaling increased confidence in the asset’s future value

Derivatives

  • Funding rates for both BTC and ETH remained positive. 
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH remained relatively flat at 57.50% and 64.67% respectively.
  • The 30-day 25-delta skew (C-P) for BTC dropped to 0.80 while ETH declined to -1.05.
  • The futures market witnessed $189.41M in liquidations in the last 24 hours, with longs representing 74.96%.

Net Annualized APR

Perp (USDT pair)

Long on

Short On

25.79%

AVAX

Binance

dYdX

20.56%

AVAX

OKX

dYdX

19.07%

BNB

OKX

Bybit

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 implied volatility continues to rise, with the 7-day IV reaching 49.23 and the 30-day IV at 54.25. This increase may be driven by President Biden’s ambiguous remarks on whether the U.S. would back Israel in striking Iran's oil facilities. Such action could trigger a significant oil supply shock and escalate geopolitical tensions in the region. The heightened IV reflects market uncertainty and the potential spillover effects on broader risk assets, including BTC, as investors brace for possible volatility driven by geopolitical risks.

BTC term structure has remained in contango, signaling a more stable market outlook, but there is heightened demand for short-term options (up to 60 days). This is possibly due to option buyers seeking to hedge their spot positions, reflecting uncertainty around the Federal Reserve's potential decision to halt its rate-cutting trend in November.

The 30-day call-put skew remains positive at 0.80, signaling a longer-term bullish sentiment, while the 7-day skew has turned negative at -1.89, reflecting short-term bearishness. This negative short-term skew indicates that investors are bracing for potential market declines in the near future, suggesting concerns about immediate downside risks. 

Lastly, @Paradigm highlighted a trading session in which BTC had bullish instruments bought whereas ETH had notable bearish instruments bought. Key BTC trades encompassed a custom structure with 425x 27-Dec-24 $80K/$100K Call ratio, and 375x 27-Dec-24 $80K/$100K Call Spread. For ETH, the notable trades included 11,500x 11-Oct-24/25-Oct-24 $2.4K Put Calendar (sold) and 3,625x 11-Oct-24/25-Oct-24 $2.4K Put Calendar (bought).

Crypto Technical Analysis

Moving on to technical analysis, BTC remained relatively flat yesterday, hovering slightly below $61K, with the price continuing to be supported by the 200-period SMA on the 4-hour chart. As a result, the technical indicators remain unchanged, with the next support level near $58K and resistance at the $64K level.

On the other hand, ETH experienced another decline despite slight recoveries in the morning. Currently, bulls are attempting to push the price to the $2.4K resistance level, which, if broken, could lead to an upward surge toward the next resistance zone at $2.7K. However, despite this recovery, the RSI continues to hover around the oversold threshold, indicating strong bearish sentiment in the market. If bearish momentum persists, the next support may be found at $2.27K, aligning closely with the local low.

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TRHX Research (Formerly Treehouse Research) 🌳