BTC

ETH

S&P Futures 500

$44,652.70

$2,433.09

$5,013.50

(+3.69%)

 (+2.32%)

(+0.78%)

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


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Our Daily View

What We Are Covering Today

  • China abruptly replaces CSRC head; CBO forecast rise in U.S. budget deficit (More in Macro & TradFi)
  • Ripple battles SEC demands; U.S. nears stablecoin regulation breakthrough (More in DeFi & CeFi)
  • Analysis suggests short-term BTC holders are reshaping market sentiment; MicroStrategy increases its BTC holdings (More in On-Chain)
  • BTC maintains contango; significant options trades mark Paradigm's session activities (More in Crypto Derivatives)
  • Both BTC and ETH have broken above their respective resistance levels and are approaching local highs (More in Crypto Technical Analysis)

Macro & TradFi

In a surprising turn of events, China's leadership has made a significant change at the helm of its securities regulator, signaling deep concerns over the persistent slump in the stock market. The removal of Yi Huiman as the head of the China Securities Regulatory Commission (CSRC), reported by Xinhua News Agency, reflects the urgency within President Xi Jinping's administration to address the market downturn that has wiped out $5 trillion in value over four years. The appointment of Wu Qing, a close ally of Premier Li Qiang and a seasoned technocrat known for his strict regulatory approach, underscores the government's determination to reverse the decline and restore investor confidence in the world's second-largest stock market. This leadership shake-up has sent shockwaves through the financial sector, particularly as it came without prior internal announcement, catching even high-ranking CSRC officials off guard. The move indicates a growing sense of alarm over the market's prolonged rout and a readiness to adopt more aggressive measures to stem the tide. While the government has already implemented interventions to support the market, analysts argue that substantive reforms and policy consistency are necessary to address the underlying economic issues and reinvigorate the stock market. 

In other news, according to a recent report from the Congressional Budget Office (CBO), the United States' budget deficit is projected to escalate significantly over the next decade, rising from $1.6 trillion to $2.6 trillion. This increase, amounting to almost two-thirds, is primarily attributed to the surge in interest rates which amplifies the government's debt servicing costs. Consequently, the deficit as a percentage of the Gross Domestic Product (GDP) is expected to grow from 5.6% in 2024 to 6.1% in ten years, remaining notably higher than the 50-year average of 3.7%. Moreover, the anticipated rise in the U.S.'s public debt to over 100% of GDP by 2025, reaching around 116% by 2034, has sparked concerns among economists and international bodies like the IMF. The situation is further complicated by the political climate, with neither major U.S. presidential candidate proposing tax increases to mitigate the growing fiscal gap, and the contentious debates over the debt ceiling posing additional risks to the government's financial stability.

Lastly, the S&P 500 closed at a record high, up 0.82%, finishing at $4,995.06, with market participants focused on corporate earnings and the Federal Reserve's interest rate outlook. Notable gains were seen in Chipotle Mexican Grill, which soared 7.2% following its earnings beat, and Ford, which rose 6% after announcing an increase in its first-quarter dividend and a scale-back in investments for electric vehicles. The Dow Jones Industrial Average also experienced growth, up 0.40% to $38,677.36. The Nasdaq Composite saw a significant uptick, rising 0.95% to $15,756.64, although still short of its record high from November 2021. Despite broader market gains, concerns lingered over the banking and commercial real estate sectors, influenced by recent developments with New York Community Bancorp. However, the market's overall mood was optimistic, with investors digesting Federal Reserve officials' comments on interest rates and looking forward to more corporate earnings reports.

CeFi & DeFi

  • Ripple requests deadline extension, citing voluminous SEC document demands
  • U.S. prosecutors call for SBF, Mashinsky hearings
  • Binance to Delist Monero, $XMR Plummeted to Multimonth Lows
  • Decentralized Stablecoin HAI to Launch on Optimism and Airdrop Governance Token
  • Cosmos-based ‘RollApp’ Platform’s Dymension Launched Mainnet with $350M Airdrop
  • Crypto Firm Bakkt Warns It Might Not Be Able to Remain in Business

In the ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC), Ripple has sought an extension until February 20 to comply with the SEC's demands for a comprehensive array of documents covering the post-complaint period. This request, made in light of a court ruling favoring the SEC's pursuit of financial records to ascertain appropriate penalties or remedies, underscores the challenges Ripple faces in meeting the regulatory body's extensive discovery requests within the original timeline. The legal skirmishes, which have persisted for over four years, reached a notable juncture last year when a judge determined that Ripple's programmatic and retail exchange sales of XRP did not constitute securities offerings. This ongoing dispute seems to exert a negative influence on XRP's market performance, with the cryptocurrency experiencing a significant decline in value year-to-date. 

Elsewhere, U.S. lawmakers, led by House Financial Services Committee Chair Patrick McHenry and Representative Maxine Waters, are reportedly on the verge of finalizing a crucial stablecoin regulation bill, signaling a significant step forward in the oversight and regulation of digital currencies. This development comes after extensive negotiations spanning over 20 months, focusing on the Federal Reserve's role in supervising the issuance and management of stablecoins. Waters highlighted the central bank's oversight authority as a key aspect of the agreement, underscoring the bipartisan effort to ensure robust regulatory frameworks for stablecoins. The anticipated legislation aims to position the U.S. as a leader in the global digital currency space, addressing consumer protection and financial stability concerns. This move is timely, following Treasury Secretary Janet Yellen's call for urgent action on cryptocurrency regulation to safeguard investors and the financial system. The progress reflects a growing consensus on the need for clear and effective regulatory measures in the crypto markets.

On-Chain

CryptoQuant’s analysis reveals that short-term Bitcoin holders, who have held BTC for less than six months, are pivotal for gauging network strength. Although the Realized Cap within the 0-1 week UTXO age band has dipped recently, suggesting asset redistribution rather than a market slump, the 1-3 month band shows a steady increase, hinting at new investor support despite stagnant BTC prices. Furthermore, the overall upward trend in the 3-6 month band's Realized Cap reflects a maturing, stabilizing market. This points to an underlying resilience in Bitcoin, with persistent economic activity hinting at a cautiously optimistic outlook.

MicroStrategy's accumulation of Bitcoin continues with the latest data indicating that since December 27, 2023, the corporation has purchased an additional 850 BTC, valued at approximately $37 million, at an average price of $43,686 per Bitcoin. This acquisition further expands MicroStrategy's Bitcoin portfolio to a total of 190,000 BTC, which, valued at the current market prices, amounts to an investment worth around $8.15 billion. The average purchase price of MicroStrategy's entire Bitcoin holding is reported to be $31,224, reflecting a methodical investment approach throughout varying market conditions. Given the current Bitcoin prices, MicroStrategy's investment strategy has yielded a profit exceeding $2.22 billion.

Crypto Derivatives

  • Funding rates remained positive for BTC and ETH. 
  • Deribit Implied Volatility Index (DVOL) for BTC and ETH increased slightly to 44.14% and 45.65%, respectively.
  • The 30-day 25-delta skew (C-P) for BTC and ETH remain positive, rising to 1.68% and 1.96% respectively.
  • The futures market witnessed $113.18M liquidations, with shorts representing 76.8%.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

Net Annualized APR

Perp (USDT pair)

Long on

Short On

21.45%

SOL

Binance

dYdX

21.00%

BNB

Binance

OKX

12.52%

ETH

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.


The ATM Implied Volatility (IV) for BTC is exhibiting signs of stabilization, maintaining a level of around 40%. This steadiness can be attributed to an absence of significant near-term events anticipated to drive substantial price fluctuations. It seems the market has reached a consensus on Bitcoin's price action in the immediate future. However, it's important to note that the Bitcoin halving event scheduled for April remains on the horizon, suggesting that the current market stability may be a temporary phase before potential volatility as the halving approaches.

BTC’s market term structure has preserved its contango state, with a small increase in the short-term IV for contracts expiring within the next 50 days.

The BTC’s 25-delta call-put skews, with the 30-day skews increasing positively to 1.68%, while the 7-day skew at 1.43%. The higher premium on 30-day calls suggests that investors are willing to pay more for the potential upside over the next month. Conversely, the slightly lower 7-day skew reflects a short-term cautiousness, implying that while optimism is growing in the mid-term, there is still some hesitation in the immediate week ahead.

Lastly, during @Paradigm’s Asia / Europe Session Hours, key BTC trades encompassed the procurement of 150x 26-Apr-24 39/49k Strangles, alongside the sale of 150x 29-Mar-24 48/50k Call Spreads, indicating a strategic play on volatility and price direction. Concurrently, notable ETH structures included a substantial move with the sale of 3,000x 9-Feb-24 2350 Puts, coupled with 1,500x 29-Mar-24 2200/2800 Bear Risk Reversals, showcasing a strong inclination towards downside protection in the ETH market.

Crypto Technical Analysis

In technical analysis, BTC has shown increased upward volatility, breaking above both the previously identified triangle formation and the resistance at $44K. RSI has also surpassed the overbought threshold, currently at 74. If bullish momentum persists, the next immediate resistance lies between $45.5K to $45.8K, potentially leading to a new local high. However, the current price level has not definitively convincingly broken above the $45K resistance. Therefore, a retracement to the downside is possible, with the triangle’s lower boundary serving as the immediate support, approximately at $42.8K.

ETH has indeed followed a similar upward trajectory, exhibiting a clearer breakout above the previously identified resistance near $2.4K. RSI has continued to climb, reaching 75 and entering the overbought territory. Concurrently, last night's price movements saw ETH surpassing the 200-period SMA, confirming a bullish trend with the moving averages. Looking forward, the next significant resistance level is at $2.5K, serving as a notable psychological barrier, while the former resistance at $2.4K now acts as a support level for any potential retracement before further upward movement.

Access institutional-grade commentary on TradFi × Crypto markets

By Treehouse Research

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Treehouse Research 🌳