BTC

ETH

S&P 500 Futures

$60,177.00

$2,385.00

$5,833.50

(-0.48%)

 (+0.37%)

(-0.10%)

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

  • US CPI increased by 0.3% for second consecutive month; Bank of Korea reduced interest rate by 25 bps (More in Macro & TradFi)
  • Uniswap announced plans to build its own Ethereum L2; SEC sued Cumberland DRW for unregistered securities dealings (More in DeFi & CeFi)
  • ZachXBT exposes Faris Ali's crypto robbery; Bitcoin poised for a rise after Coinbase sell-off ends (More in On-Chain)
  • BTC’s 7D and 30D IVs show little changes; BTC 7D skew sees sharp decline (More in Crypto Derivatives)
  • BTC trades near support level; ETH traders cautiously bullish (More in Crypto Technical Analysis)

Macro & TradFi

In September, U.S. inflation rose more than expected, with the core Consumer Price Index (CPI) increasing by 0.3% for the second consecutive month, indicating a stall in the progress made toward reducing inflation pressures. The overall CPI also saw a 0.2% rise, primarily driven by higher food and housing costs. This uptick, along with a strong jobs report, is likely to influence the Federal Reserve's upcoming decisions on interest rates, with many economists predicting a cautious approach. Despite these increases, experts suggest that inflation is on a downward trend, maintaining expectations for a potential rate cut in November.

Elsewhere, the Bank of Korea has reduced its benchmark interest rate by 25 basis points to 3.25%, marking its first cut since the Federal Reserve began tightening its policy in March 2022. This decision aligns with economists' forecasts and follows a drop in South Korea's inflation rate to 1.6% in September, well below the central bank's 2% target. The rate cut comes after a prolonged period of stability, with the BOK having raised rates by 300 basis points since August 2021. Analysts anticipate further cuts, citing a favorable inflationary environment and weakening housing demand as key factors supporting the decision.

Lastly, U.S. stock indexes edged lower as investors reacted to mixed economic data, with the S&P 500 dropping 0.2% and the Dow and Nasdaq each down 0.1%. A hotter-than-expected consumer price index and higher-than-anticipated jobless claims raised questions about the Federal Reserve’s upcoming rate cuts. Among notable stocks, First Solar (FSLR) plunged 9.3% after Jefferies lowered its price target, while Advanced Micro Devices (AMD) fell 4% following a lackluster AI chip event. Conversely, CrowdStrike (CRWD) rose 5.6% on positive analyst support, and Micron Technology (MU) gained 3.9% due to AMD's AI chip focus on high-bandwidth memory. Crude oil rose over 3%, gold increased to around $2,650 per ounce, and Bitcoin dropped to $59,800. Investors will be looking out for the US PPI data, released today at 20:30 SGT. Additionally, the week will close with major banks like JPMorgan and Wells Fargo reporting earnings. 

DeFi & CeFi

  • Uniswap plans its own Ethereum layer-2 network called Unichain
  • SEC sued Cumberland DRW for unregistered securities dealings
  • Justin Sun becomes Prime Minister for Liberland
  • South Korea to discuss approval of spot Bitcoin ETFs
  • Mt. Gox extends creditor repayment deadline to 2025
  • Ripple files notice for cross-appeal in the SEC case

Uniswap has announced plans to launch its own Ethereum layer-2 network called Unichain, utilizing Optimism technology to reduce costs, enhance transaction speeds, and boost liquidity across various blockchains. This new layer-2 solution aims to create a network of interoperable networks, addressing liquidity fragmentation caused by tokens spread across multiple layer-2 platforms. By leveraging the Optimism Superchain, Unichain seeks to facilitate better communication between networks and improve overall transaction efficiency, alleviating congestion on the Ethereum mainnet. Additionally, Unichain will implement a trusted execution environment (TEE) and a community validation network to enhance trust and transparency in the blockchain. This initiative reflects Uniswap's commitment to advancing DeFi while ensuring better access to liquidity and increased decentralization.

Meanwhile, the U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Cumberland DRW, alleging that the crypto market maker operated as an unregistered securities dealer by "buying and selling" cryptocurrencies considered unregistered securities, including Polygon, Solana, Cosmos, Algorand, and Filecoin. The SEC claims that Cumberland used research reports and promotional emails to encourage investment in these assets, leading investors to perceive them as investment contracts subject to federal securities laws. Despite these allegations, Cumberland has asserted its confidence in its compliance framework, stating that it will not alter its business operations in response to the SEC's action. The SEC is seeking a permanent injunction and the disgorgement of profits related to the alleged violations.

On-Chain

On-chain investigator ZachXBT exposed Faris Ali (aka Zay/Tommy) for allegedly orchestrating a $4.3M home invasion robbery in June 2024, targeting a victim through a crypto data breach. The attackers, posing as delivery drivers, forced the victim to transfer funds to two wallet addresses, with most of the stolen crypto still dormant. Zach's investigation uncovered chat logs of the plot, and Ali had previously leaked his identity by boasting about his bail on Telegram. After the robbery, an ENS domain "farisali.eth" was registered, and an on-chain message threatened Ali to return 60% of the funds or face exposure to law enforcement. While acknowledging that the perpetrator deserves his fate, ZachXBT highlights the increasing frequency of home invasions tied to crypto in Western Europe and the need for individuals to avoid sharing personal information, monitor their online exposure, and, when possible, use fake information to protect their privacy.

According to CryptoQuant analyst Maartunn, Bitcoin is likely to experience a sharp rise once the current selling pressure from a major seller on Coinbase subsides. This seller has created a significant price gap between Bitcoin's USD price on Coinbase Pro and its USDT price on Binance, signaling strong selling activity rather than the typical US investor buying pressure. Despite speculation, this sell-off is not linked to the U.S. government or Silk Road Bitcoins, as the associated wallet still holds 69,370 BTC (~$4.1B).

Derivatives

  • Funding rate for BTC and ETH remained positive. 
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH remained at 55.01% and 61.33% respectively.
  • The 30-day 25-delta skew (C-P) for BTC dropped to -0.13 while ETH rose slightly to -1.28.
  • The futures market witnessed $188.96M in liquidations in the last 24 hours, with longs representing 78.26%.

Net Annualized APR

Perp (USDT pair)

Long on

Short On

71.63%

DOGE

Binance

dYdX

68.09%

DOGE

Bybit

dYdX

64.70%

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.

In the past day, both the 7-day and 30-day ATM implied volatility for Bitcoin have seen slight increases. The 7-day IV has remained relatively the same at 42.83, reflecting only a minute uptick in short-term uncertainty. The 30-day IV has also maintained its elevated level at 52.47. The consistent gap between the 7-day and 30-day volatilities continues to indicate that while short-term uncertainties have increased slightly, the market is still more focused on the potential for larger moves over the next month.

Today's term structure continues to exhibit a contango shape, where implied volatility rises with longer maturities. Notably, there is a clear plateau from the 30-day maturities onwards, where implied volatility slightly levels off before continuing its upward trend. This leveling off suggests that traders expect relatively stable market conditions in the short term, with no significant price swings anticipated during this period. However, as we move beyond the 30-day mark, implied volatility resumes its gradual increase, reflecting growing uncertainty in the longer term.

In the past day, the 7-day skew has continued its sharp decline, dropping even further towards negative territory, reflecting heightened demand for downside protection. The sustained drop suggests that market participants are increasingly cautious about potential near-term risks. Meanwhile, the 30-day skew remains relatively stable, showing only minor fluctuations throughout the day. This stability indicates that in the medium term, traders are not making significant shifts in their positioning. The market outlook for the next month remains balanced between calls and puts, with no substantial changes in sentiment for medium-term risks. 

Lastly, @Paradigm highlighted key BTC trades that included the purchase of a 200x 25-Oct-24 $68K Call, a 186x 25-Oct-24 $55K/$68K Bear Risk Reversal, the sale of a 175x 25-Oct-24 $58K/$63K Bull Risk Reversal, a 173x 25-Oct-24 $55K/$67K Bear Risk Reversal, and the purchase of a 140x Inverse 18-Oct-24 $67K / 25-Oct-24 $65K Call Calendar. For ETH, notable trades were the sale of a 2000x 18-Oct-24 $2.25K Put, the purchase of a 1000x 29-Nov-24 $2.6K Straddle, the purchase of a 1000x 8-Nov-24 $2.6K/$2.5K Put Spread, and the sale of a 1000x 25-Oct-24 $2.9K / 8-Nov-24 $3K Call Calendar.

Crypto Technical Analysis

Moving on to Technical Analysis, BTC is trading around $60.2K and testing the immediate support level of $59.8K. This zone has acted as a significant support level in previous sessions and if it fails to hold, the subsequent support is around $57.5K, marked by the shaded red zone. The price remains below the resistance level of $64.5K, which has been a strong barrier to bullish movement as shown by the previous rejections near this level. The RSI is at 36.22, which is close to oversold territory, suggesting that bearish momentum is strong, but the BTC major may be nearing a level where a relief bounce could occur if buying pressure picks up. Traders should watch for confirmation of either a hold at support or a breakdown for signs on the next major move.

On the other hand, ETH is trading around $2.38K, having recently bounced off the ascending trendline that has been acting as support. This trendline has provided support over the past few weeks, suggesting that buyers are stepping in at higher levels. The price is still below the key resistance level of $2.7K, representing a 13.4% upside. The RSI is at 42.74, indicating that bearish momentum has eased, but it is still in a relatively neutral to slightly bearish territory. Market sentiment appears cautiously bullish as the price continues to respect the ascending trendline support. Traders should monitor the price reaction near the trendline for confirmation of the next move.

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TRHX Research (Formerly Treehouse Research) 🌳