BTC

ETH

S&P 500 Futures

$80,605.25

$3,194.57

$6,032.75

(+6.07%)

 (+9.92%)

(+0.49%)

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

  • U.S. economy shows resilience but Fed assesses inflation progress; China faces weak demand, deflation risks (More in Macro & TradFi)
  • Standard Chartered predicts a year-end BTC target at $100K and Solana boom; Stacks announced sBTC launch to be roughly in December (More in DeFi & CeFi)
  • Whale activity involving LINK coincides with price increase; BTC’s increase in short-term holders hints at a potential break-out phase (More in On-Chain)
  • BTC’s term structure in a state of backwardation; BTC’s 7-day 25-delta skews in negative territory (More in Crypto Derivatives)
  • BTC continues its upward momentum, but RSI signals overbought; ETH faces resistance approaching ATH (More in Crypto Technical Analysis)

Macro & TradFi

Federal Reserve Bank of Minneapolis President Neel Kashkari highlighted the strength of the U.S. economy but noted that the Fed’s inflation battle is ongoing, with the 2% target not yet fully secured. Following two consecutive rate cuts, he suggested that fewer rate reductions may be needed if productivity growth remains robust. A further rate cut in December remains on the table, but Kashkari emphasized uncertainties surrounding the potential economic impact of President-elect Donald Trump's policy plans, especially regarding mass deportations, which could disrupt certain industries and labor availability. The Fed plans to monitor these developments and adjust its policy stance accordingly from the US CPI data release.

Meanwhile, China’s CPI increased by 0.3% year-over-year, marking its slowest growth in four months, while producer prices fell by 2.9%, intensifying deflationary pressures in key industrial sectors. Despite Beijing’s aggressive stimulus efforts—including a recent $1.4 trillion local debt resolution package aimed at alleviating local government debt—demand remains weak, particularly in the real estate sector where most household wealth is tied. This restrained consumer spending continues to stymie growth. Analysts suggest further rate cuts may follow, although immediate economic impact appears limited.

U.S. equities reached new highs last Friday, with the Dow and S&P 500 posting their strongest weekly gains in a year following Donald Trump's re-election, advancing 0.59% and 0.38%, respectively, while the Nasdaq edged up by 0.07%. Tesla surged 8.19%, continuing its rally amid positive sentiment around Trump’s second term, and Coinbase rose 5.93% in line with Bitcoin's ongoing strength. Investors are now focused on the upcoming U.S. Consumer Price Index (CPI) report, set for release on Wednesday, November 13, at 21:30 SGT, followed by Retail Sales data on Friday, November 15, at 21:30 SGT, both of which could provide further insight into inflation trends and consumer spending.

DeFi & CeFi

  • LinkPool joins Treehouse as new DOR panelist
  • Standard Chartered predicts $100K BTC at year-end
  • Stacks announced sBTC upgrade to be approximately in December
  • FTX bankruptcy estate sues Anthony Scaramucci and SkyBridge Capital
  • Tether’s trade finance division funds first oil deal via USDT

With Bitcoin's price surpassing $80,000, reaching a new high following Donald Trump's re-election, Standard Chartered's Geoff Kendrick predicts further gains in the market, including a potential rise to $100,000 by year-end and $125,000 by January 20, 2025. This surge has positively impacted other cryptocurrencies, with Solana (SOL) expected to reach new all-time highs and Ethereum (ETH) likely to follow suit by the inauguration. Cardano (ADA) also saw a significant rally after founder Charles Hoskinson announced plans to shape crypto policy in the Trump administration. Kendrick forecasts the entire crypto market could hit $10 trillion by 2026, driven by growing adoption and real-world use cases.

In other news, Stacks founder Muneeb Ali announced that the long-awaited sBTC upgrade, aimed at addressing Bitcoin's "write problem" and expanding DeFi applications on the Bitcoin base layer, could launch as early as December 2024. sBTC is touted as the first trustless two-way Bitcoin peg system, offering a decentralized alternative to wrapped Bitcoin like wBTC, which is typically controlled by centralized custodians. The upgrade, expected to roll out in stages with more updates in January, will enable Bitcoin's use in decentralized applications, enhancing Bitcoin's scalability through Layer-2 solutions and aligning with its decentralized ethos. 

On-Chain

In an on-chain analysis by CryptoQuant, Binance's Exchange Reserve Percentage recently reached a record high of 25%, showing its continued dominance amongst the CEXs. The exchange reserve metric reflects the proportion of all exchange reserves held by Binance, which has climbed approximately 4% from 21% in November 2023. Although this growth might appear modest, Binance now ranks second in reserve percentage, trailing only Coinbase, which leads at around 33%. If this trend continues, Binance could potentially rival Coinbase for the highest percentage of exchange reserves.

In another analysis by CryptoQuant, following Phase 1, where Long-Term Holders (LTH) accumulated Bitcoin, there has been a shift as these holders begin to distribute their holdings, suggesting a change in market dynamics. A critical factor for transitioning into Phase 2 is an increase in Short-Term Holder (STH) supply, which typically occurs as new capital flows into the market. Presently, the market is seeing an influx of liquidity, signaling that new capital is entering, a condition necessary for the next phase. This setup mirrors the 2017 cycle, where similar conditions led to increased short-term market activity and a subsequent rise in price volatility. For traders and investors, this pattern suggests the market may be entering a period of heightened speculative interest and potential price surges.

Derivatives

  • Funding rate for BTC and ETH remained positive.
  • Deribit Implied Volatility Index (DVOL) for BTC declined slightly to 52.92% while ETH rose to 65.06%.
  • The 30-day 25-delta skew (C-P) for BTC and ETH declined to 0.01 and 5.12, respectively.
  • The futures market witnessed $987.18M in liquidations over the weekends, with shorts representing 58.20%.

Net Annualized APR

Perp (USDT pair)

Long on

Short On

24.74%

XRP

Bybit

OKX

20.40%

XRP

Binance

OKX

12.97%

BNB

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.

Bitcoin’s 30-day IV held steady at 50.22, while the 7-day IV increased to converge closer to the 30-day IV at 49.40 after heightened divergence. This convergence implies a reduction in short-term volatility expectations, suggesting that immediate market concerns have subsided to have similar expectations over tenors of up to 30 days. However, the stabilization also signals caution, as any significant shifts from this point may reflect renewed market influences.

BTC's options term structure indicates a state of backwardation, with increased IV over short-term tenors of up to 2 days, possibly in anticipation of the US CPI data release during this timeframe.

The BTC 25-delta 7-day and 30-day constant maturity skew reveals a notable shift in market sentiment. 7-day skews exhibited sharper fluctuations and declined to a negative value of -4.90 while 30-day skews experienced a less pronounced volatility but declined to 0.01. The surge in demand for downside protections could be due to BTC rising to an all time high of 81K over the weekend, which may precede a retracement. 

Lastly, @Paradigm top structures highlighted mainly protective puts for BTC and bullish call spreads for ETH. For BTC, key trades involved the purchase of a 1525x 15-Nov-24 $64K Put and 1150x 29-Nov-24 $75K Call, and the sale of a 1720x 15-Nov-24 $64K Put.  In ETH, substantial positions included the procurement of a 10250x 28-Mar-25 $3K/$4K Call Spread and 8125x 27-Dec-24 $3.2K/$3.6K Call Spread, and the sale of a 42375x 28-Mar-25 $2.8K/$3.8K Call Spread.

Crypto Technical Analysis

Looking at BTC on the weekly chart, there is a clear continuation of upward momentum, highlighted by a prominent green candle representing this week’s price movement. Bitcoin has decisively broken through key resistance levels, pushing higher towards levels last seen in late 2021. Notably, BTC has entered the overbought zone on the RSI, currently above 70, which historically signals caution on the weekly timeframe. Similar RSI overbought conditions were observed in November 2021 and April 2023, both of which preceded notable pullbacks. 

As BTC climbs into uncharted territory, reaching new highs beyond prior resistance, immediate support is evident around the 70K level, which previously acted as a significant barrier. The 70K level now serves as a foundational support level, reinforcing bullish sentiment and potentially providing a cushion in the event of a price retracement. On the daily chart, BTC shows strong upward momentum, but with the RSI currently at 78, BTC is in overbought territory, signaling that while the bullish trend is intact, a pullback to retest the 70K support could occur.

Unlike BTC, ETH has yet to reach its previous ATH of 4.8K, last touched on November 10, 2021. Currently, ETH is trading around 3.2K, with key resistance levels identified at 3.5K and 3.9K, which could act as significant barriers on its path upward. Immediate support can be observed around 2.75K, providing a base if a pullback occurs. The RSI on the daily chart is at 76, indicating overbought conditions, which may suggest a consolidation phase or minor retracement in the near term. For ETH to continue its bullish momentum towards previous ATH levels, it would need to overcome its key resistance levels ahead.

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TRHX Research (Formerly Treehouse Research) 🌳