BTC

ETH

S&P Futures 500

$27,229.50

$1,642.50

$4,489.25

(+2.09%)

 (+0.76%)

(-0.32%)

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


GM Treehouser 🌳

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Our Daily View

What We Are Covering Today

  • U.S. housing starts plummets by 11.3% while building permits rose 6.9%; Canada sees spike in August CPI (more in Macro & TradFi)
  • Balancer’s user interface is under attack; US voters across 4 swing states oppose anti-crypto presidential candidates (more in DeFi & CeFi)
  • 21.co has consolidated data from 295 wallets associated with Lazarus Group, a North Korean cybercrime unit; Dormant whales withdraw 20K $ETH (more in On-Chain)
  • Option implied volatility inched higher ahead of Fed’s meeting; Skew rose sharply on BTC suggesting a shift towards bullish sentiment (more in Crypto Derivatives)
  • BTC breaks descending pattern targeting 28K; ETH approaches key trendline with potential volatility (Crypto Technical Analysis)

Macro & TradFi

In August, the U.S. housing sector experienced a significant downturn, hitting a low not seen in over three years. Housing starts plummeted by 11.3% to reach an annual rate of 1.283M units, marking the lowest level since June 2020. However, a surge in building permits indicates that new construction is still supported as permits for future home construction spiked by 6.9%, reaching a rate of 1.543M units, the highest since October 2022. The housing market has been thriving this year due to a shortage of existing homes for sale, driving new construction activity. Nevertheless, the recent surge in mortgage rates, coupled with rising U.S. Treasury yields, is causing prospective buyers to step back. The average rate for a 30-year fixed mortgage currently hovers around 7.18%, a level not seen since March 2002, according to data from Freddie Mac.

Elsewhere, Canadian households are grappling with surging inflation, the fastest in four months, driven by rising gasoline and housing costs. In August, the consumer price index (CPI) jumped by 4.0% compared to the previous year, exceeding market expectations of a 3.8% increase. This follows a rise of 3.3% in July. On a monthly basis, the CPI increased by 0.4% compared to July, surpassing the expected 0.2% rise. The Bank of Canada had predicted this inflation acceleration, largely due to recent energy price increases. Similar trends were seen in U.S. inflation, with gasoline prices rebounding for the first time since January.

U.S. equities closed lower on Tuesday as Treasury yields surged to their highest levels since 2006 and 2007, fueled by ongoing signs of economic growth and fresh concerns about inflation due to rising oil prices. The DJIA dropped 0.03%, the S&P 500 fell 0.02%, and the NASDAQ lost 0.02%. As of Wednesday morning, Brent and WTI crude oil prices declined to $94.14 and $90.31 per barrel, respectively. Investor attention will center on the revised economic forecasts and remarks from Fed Chairman Jerome Powell, with the prevailing anticipation being that the Fed is not inclined to implement further rate hikes.

DeFi & CeFi

  • Balancer’s user interface is under attack
  • US voters across 4 swing states oppose anti-crypto presidential candidates
  • Bitcoin Adoption Fund launched by Japan’s $500B Nomura bank
  • Sino Global, Coinbase and Libra Alums start $60M Web3 Fund
  • Tether authorizes $1B USDT to ‘replenish’ Tron network
  • CZ says Binance.US never used Ceffu or Binance Custody
  • Optimism launched 3rd round of $OP airdrop to active governance participants

DeFi protocol Balancer declared on X that its platform is under attack. The exploit rendered Balancer’s user interface hazardous to interact with. Balancer is currently investigating the issue and has yet to release more details. It released a statement on Twitter urging users not to interact with the interface, but according to on-chain sleuth @ZachXBT, almost $238K had been stolen within the first 30 minutes of Balancer’s statement and directed to a particular address. One user @DeFi_Hanzo shared on X that the exploited Balancer website would siphon funds from your wallet as soon as you changed chains. This comes after Balancer’s recent “critical vulnerability”, which led to a $2M exploit days later.

In other news, poll data cited by Coinbase shows that more than half of US voters across four swing states would not vote for an anti-crypto presidential candidate. This was in relation to Coinbase’s “Stand With Crypto” campaign, during which it plans to focus on nine states, including these four. Specifically, when surveyed in the fall of 2022, 55% of voters across New Hampshire, Nevada, Ohio, and Pennsylvania “stated that they would be less likely to vote for candidates who oppose crypto and Web3”. The poll involved 800 people, with 13-19% claiming to own cryptocurrency at the time, and over 40% who declared that they remitted crypto overseas in order to help their families, at a fraction of the cost of international wire transfers. Coinbase’s cited research comes in the midst of its ongoing 14-month long campaign pushing for crypto legislation in the country.

On-Chain

Moving on to On-Chain analysis, 21.co has consolidated data from 295 wallets identified by the U.S. Federal Bureau of Investigation (FBI) and the Office of Foreign Assets Control (OFAC) associated with the Lazarus Group (APT38). This cybercrime unit, known to operate on behalf of the North Korean government, has executed numerous high-profile hacks. Our findings indicate that the predominant holdings within these wallets are in ETH, with a recent uptick in BTC. Notably, after each successful cyber intrusion, these wallets promptly transfer the illicitly acquired crypto assets to other addresses.

According to @lookonchain, a dormant whale, inactive for the past two years, re-emerged four days ago, withdrawing 10K $ETH ($16.5M). Notably, these funds were promptly dispersed to major exchanges - Binance, OKX, and KuCoin, utilizing three distinct addresses within the subsequent days. The same amount of another 10K $ETH has also been transferred out today, with such movements suggesting a strategic positioning within the market, potentially signaling impactful shifts on the horizon. Market participants should observe closely for potential ramifications.

Crypto Derivatives

  • Funding rate flips to negative for BTC while ETH remains in positive territory.
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH increased to 42.92% and 37.88%, respectively.
  • 30-day 25-delta skew (C-P) on both BTC and ETH rose to 3.09% and 0.09%, respectively.
  • The futures market witnessed $60.43M worth of liquidations in the last 24 hours, with shorts representing 66.65%% of the total.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On

30.19%

SOL

dYdX

Bybit

13.00%

BTC

OKX

Bybit

6.77%

LTC

OKX

dYdX

Source: @CexyArbBot Telegram Bot

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.


In the options market, the 30-day implied volatility (IV) for BTC experienced a slight uptick to reach 37.83% on Wednesday morning. Presently, the 30-day IV for BTC stands at a 6% premium compared to ETH, which is currently at 31.30%. Over the past month, BTC's IV has consistently exceeded ETH's IV, indicating that traders anticipate greater future volatility for BTC relative to ETH. This may be attributed to factors such as the anticipated halving event and the comparatively lower volatility observed in ETH in recent periods.

While BTC's term structure continues to exhibit contango, there appears to be an overall increase in implied volatility (IV) along the curve. Notably, there has been a significant spike in IV at the near-term portion of the curve as traders begin factoring in the expected volatility related to the upcoming Federal Reserve meeting scheduled for tonight.

At the same time, the 30-day skew for BTC, considering both call and put options, is gradually rising and currently stands at 3.09%. In parallel, the 7-day skew has turned positive, reaching 2.41%, indicating a shift in sentiment among traders towards a more bullish outlook.

Finally, @Paradigm reported a blend of sentiments in its trading activities. BTC recorded a higher number of bullish trades, whereas the focus for ETH leaned toward bearish positions. Notable trades for BTC included the purchase of 199x 29-Sep-23 $30K/$33K call spreads and 150x 29-Sep-23 $31K/$33K call spreads. Conversely, ETH witnessed the acquisition of 2,800x of 6-Oct-23 $1.45K/$1.3K put spreads, accompanied by the sale of 1,000x 29-Dec-23 $2.1K calls.

Crypto Technical Analysis

In BTC's daily chart analysis, BTC recently surged to approximately 27.2K, successfully breaking through the descending channel pattern. This pivotal breach suggests a potential bullish trajectory, with a target set at the 28K resistance—a prospective ascent of 5.59% from its current standing. Yet, investors should remain vigilant, as the minor retractions witnessed in the candle patterns over the last three days signal a possible deceleration in the bullish momentum. Foundational support for BTC is firmly established at 25.8K. Currently, the Relative Strength Index (RSI) registers at 60.82, pointing towards the brink of an oversold territory. Furthermore, a noticeable squeeze in the Bollinger bands since 7 Sep might be an early indicator of imminent volatility; this observation is underscored by the 6.65% price decline on 17 Aug, which closely followed a similar band contraction on the 16th.

Moving on to ETH's daily chart, we observe that ETH trades near the 1.64K mark, effectively consolidating its position above the 1.6K support. Notably, ETH is advancing towards the apex of its descending triangle pattern, hinting at a potential breach of the descending trendline—a decidedly bullish indicator. Should this trendline be breached, we could anticipate ETH rallying toward its next resistance benchmark at 1.95K, representing a prospective surge of 18.72%. On the downside, the asset has a steadfast support level at 1.63K, which has historically demonstrated resilience. With the RSI registering at 49.20, the market sentiment appears balanced. Additionally, the observed squeeze in the Bollinger Bands mirrors the trend noted in BTC, signaling potential forthcoming volatility in either direction.

Access institutional-grade commentary on TradFi × Crypto markets

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Treehouse Research 🌳