BTC

ETH

S&P 500 Futures

$67,953.50

$2,523.50

$5,852.75

(+0.84%)

 (-0.95%)

(+0.02%)

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


GM 🌳

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Our Daily View

What We Are Covering Today

  • The U.S. labor market softens amid rising job challenges; UK confidence declines ahead of Budget concerns (More in Macro & TradFi)
  • Kraken to launch its own OP-stack based L2 in 2025; Circle CEO predicts stablecoins will grow to 5-10% of the global money supply (More in DeFi & CeFi)
  • On-chain data shows redistribution of BTC from retail traders to large holders; ETH ICO participants adds selling pressure to ETH (More in On-Chain)
  • 7D and 30D 25-delta skew (C-P) for BTC converges; Term structure maintains contango shape (More in Crypto Derivatives)
  • BTC price trades at upper Bollinger Band, suggesting temporary over-extension; ETH consolidates near oversold territory (More in Crypto Technical Analysis)

Macro & TradFi

The U.S. labor market shows signs of softening, with unemployment benefit claims falling unexpectedly but continuing claims raised to their highest level in nearly three years. This suggests it is becoming more difficult for displaced workers to find new jobs. The drop in initial claims reflects some normalization following the impact of recent hurricanes and ongoing strikes, while the rise in continuing claims signals persistent labor market challenges, exacerbated by job losses from strikes and permanent layoffs. Despite the slowdown, economists believe the Federal Reserve will likely maintain a cautious approach, supporting the economy with gradual policy easing. The Fed's recent rate cut has also stimulated home sales, though rising supply and higher mortgage rates may dampen future growth.

Elsewhere, UK consumer and business confidence have fallen to their lowest levels this year as concerns about potential tax increases loom ahead of the October 30 Budget. The GfK consumer confidence index dropped to -21, signaling anxiety among households, who are prioritizing saving over spending despite wage growth and easing inflation. Business confidence also hit an 11-month low, with companies reducing staff for the first time in 2024. Chancellor Rachel Reeves is expected to address a £40bn funding gap, likely through extended tax freezes and increased borrowing, further heightening uncertainty. While inflation has eased to 1.7%, its lowest in three years, these developments underscore the cautious mood in both consumer and business sectors.

U.S. stocks closed mostly higher, with the Nasdaq gaining 0.76%, lifted by Tesla's strong earnings report, which saw the company's stock surge nearly 22%. Tesla's robust profit margins and positive outlook for 2025 sales, praised by Deutsche Bank, played a key role in the tech-heavy index's rise to 18,415.49. IBM sank 6.2% after reporting a $330 million quarterly loss due to lower-than-expected revenues, though the company emphasized its strong position with significant investments in AI and other growth technologies. Meanwhile, Boeing fell 1.2% as a machinist union rejected a contract proposal, extending a six-week strike and complicating the company’s turnaround efforts under CEO Kelly Ortberg.

DeFi & CeFi

  • Kraken to launch its own layer-2 using OP stack
  • Circle CEO predicts stablecoins will capture 10% of the money supply
  • Memecoin GOAT surges to $800M market cap
  • GSR co-CEO Rich Rosenblum and the CTO have left the company
  • MSFT to vote on ‘investing in Bitcoin' at December shareholder meeting

Kraken, the sixth-largest crypto exchange globally, has announced the planned launch of its layer-2 network, Ink, which will operate on the Ethereum blockchain using technology from Optimism, the same provider that powers Coinbase's Base. This decision comes nearly a year after Kraken considered creating its own layer-2 network following Base's success. Ink is built on the OP stack, a customizable toolkit for developing blockchains, and is set to go live in early 2025. The rise of layer-2 networks has become a trend, with notable projects like Polygon, zkSync, Starknet, and Arbitrum competing for adoption. However, Kraken's entry may solidify the OP stack's position as a leading choice for Ethereum layer-2 solutions. The collective value locked in Optimism's ecosystem, branded as "Superchain," now surpasses that of individual projects using Arbitrum technology. Andrew Koller, the founder of Ink, emphasized the importance of a vibrant developer ecosystem for the network's success, aiming to attract developers and support the next generation of DeFi applications.

Meanwhile, Circle's CEO Jeremy Allaire has projected that stablecoins, such as USDC, could capture 5% to 10% of the global money supply over the next decade, potentially growing the market to between $5 trillion and $10 trillion. This forecast comes amid an increasing adoption of stablecoins in both developed and emerging markets, driven by their ability to facilitate transactions with lower costs compared to traditional financial methods. Allaire highlighted that stablecoins are particularly useful in regions with weaker banking systems, where they are used for payments and remittances. He noted that while USDC has primarily focused on regulated markets like the U.S. and EU, its use is growing in emerging economies, especially through partnerships with fintech firms. As regulations for stablecoins are expected to solidify globally by the end of 2025, Allaire emphasized Circle's commitment to transparency and compliance, aiming for an eventual public offering despite potential uncertainties surrounding the upcoming U.S. elections.

On-Chain

An analysis by Santiment compared the price of BTC against the types of holders holding various quantities of BTC. It showed that in the past two weeks, Bitcoin whale wallets holding 100 or more BTC have increased by 297, marking a 1.9% rise. Meanwhile, smaller wallets with less than 100 BTC have decreased by 20,629, representing a 0.1% drop. This shift indicates a redistribution of Bitcoin from retail traders to large holders or whales. Historically, such trends, where whales accumulate more BTC while smaller holders sell, have often preceded bullish movements in the market. For traders and investors, this could signal a potential upward price momentum, as whale accumulation typically suggests confidence in future price increases.

Another analysis by Lookonchain highlighted that an Ethereum ICO participant recently sold 3,000 ETH worth $7.64M. This same whale previously sold 7,000 ETH worth $24.28M on July 1, which was followed by a nearly 15% decline in Ethereum's price. Initially, the whale received 254,908 ETH during the ICO, at a cost of $79K, and now holds 37,070 ETH valued at $93.8M. This sell-off from a long-term holder could signal potential downward pressure on Ethereum’s price in the short term, especially considering the price drop after the whale's previous sale. Investors and traders should closely monitor whale activity, as large moves from early adopters often influence market sentiment and price volatility.

Derivatives

  • Funding rate for BTC and ETH remained positive.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH remained relatively constant at 57.18% and 61.83% respectively.
  • The 30-day 25-delta skew (C-P) for BTC and ETH rose to 3.88 and 1.01 respectively.
  • The futures market witnessed $115.52M in liquidations over the weekend, with shorts representing  60.88%.

Net Annualized APR

Perp (USDT pair)

Long on

Short On

80.50%

BTC

OKX

dYdX

75.46%

DOGE

Binance

dYdX

56.45%

DOGE

OKX

dYdX

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.


Both the 7-day and 30-day at-the-money implied volatilities for Bitcoin have diverged further. The 7-day ATM IV remained relatively flat, while the 30-day ATM volatility remained elevated, reflecting continued caution over the medium term. 

BTC’s term structure shows a typical contango shape, with implied volatility increasing as maturities extend. There is a sharp rise in short-term volatility, peaking around 14 days, followed by a plateau indicating relative stability in the medium term. Beyond 30 days, the curve gradually slopes upward again.

In today's chart, both the 7-day and 30-day at-the-money implied volatilities for Bitcoin show further divergence. The 7-day ATM volatility has experienced a slight increase, reflecting a growing short-term uncertainty in the market, possibly indicating that traders expect near-term fluctuations. Meanwhile, the 30-day ATM volatility continues to maintain its gradual rise, signaling that medium-term caution is also growing. 

Lastly, @Paradigm ighlighted key BTC trades, which included the purchase of an 800x 28-Mar-25 $55K/$110K Bear Risk Reversal, a 400x 25-Oct-24 $69.5K Call, the sale of a 300x 29-Nov-24 $80K Call, the sale of a 263x 29-Nov-24 $50K/$90K Strangle, and the sale of a 250x 27-Dec-24 $85K Call. For ETH, notable trades were the sale of a 2250x 29-Nov-24 $2.6K Call, the purchase of a 2000x 1-Nov-24 $2.9K/$3.1K Call Spread, the sale of a 2000x 27-Dec-24 $3K Call, the sale of a 1125x 1-Nov-24 $2.75K/$2.85K Call Spread, and the sale of a 1000x 1-Nov-24 $2.8K/$2.9K Call.

Crypto Technical Analysis

Moving on to technical analysis, Bitcoin is currently trading at $68K, near the upper Bollinger Band, indicating that the price may be temporarily overextended. A pullback towards the middle band or lower band is possible if the resistance near $69.7K holds. Furthermore, the bands are starting to widen, which suggests that volatility may increase in the short term. The support level lies at $66.1K, with the subsequent support at $64.4K if a further decline occurs.

Moving on to the 4-hour chart for ETH, ETH is currently trading at $2.5K, having dropped from its recent high near $2.7K. The price is attempting to consolidate with the support level at $2.2K. The recent sharp decline from the resistance zone indicates selling pressure, and if the support at $2.2K fails, the next significant support is around $21K. The RSI is currently at 32.99, just above the oversold level of 30. This suggests that ETH is close to oversold conditions, meaning that while the price has experienced strong selling, there may be potential for a short-term bounce or consolidation. Traders should monitor these key levels and the RSI for signs of a reversal or continuation of the downtrend.

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TRHX Research (Formerly Treehouse Research) 🌳