Are there still dip buyers? Bulls Are Widely Absent As Total Crypto Market Cap Falls To $1.65 Billion
The total crypto market cap has been trading in a descending channel for the past 24 days and the $1.65 trillion support was retested on May 6. The drop to $1.65 trillion was followed by Bitcoin (BTC) hitting $35,550, its lowest price in 70 days.
In terms of performance, the aggregate market capitalization of all cryptocurrencies has fallen 6% in the past seven days, but this modest correction in the overall market does not represent some mid-cap altcoins, which managed to lose 19% or more at the same time. Frame.
As expected, altcoins suffered the most
Over the past seven days, the price of Bitcoin has fallen by 6% and Ether (ETH) by 3.5%. Meanwhile, altcoins have experienced what can only be described as a bloodbath. Below are the top gainers and losers among the top 80 cryptocurrencies by market capitalization.
Tron (TRX) rose 26.9% after TRON DAO rolled out USDD, a decentralized stablecoin, on May 5. The algorithmic stablecoin is connected to the Ethereum and BNB (BNB) chain via the BTTC cross-chain protocol.
1inch (1INCH) gained 5.6% after decentralized exchange governance app became Polygon’s (MATIC) network leader by performing 6 million swaps on the network.
STEPN (GMT), the native token of the popular lifestyle app for earning, fell 35.7%, adjusting after a 70% rally between April 18 and April 28. A similar move happened for Apecoin (APE) after the token pumped 94% between April 22 and April 28.
The Tether bounty turned negative on May 6
The OKX Tether (USDT) premium gauges China-based retail demand and measures the difference between China-based peer-to-peer exchanges and the US dollar.
Excessive buying demand puts the indicator above 100% fair value. On the other hand, the market supply of Tether is flooded during bear markets, leading to a discount of 4% or more.
The OKX Tether premium peaked at 1.7% on April 30, indicating excess demand from retail. However, the metric returned to a 0% premium over the next five days.
Most recently, in the early hours of May 6, the OKX Tether premium turned negative -1%. The data shows that retail sentiment deteriorated as Bitcoin fell below $37,000.
Futures markets show mixed sentiment
Perpetual contracts, also known as reverse swaps, have an embedded rate that is typically charged every eight hours. Exchanges use these fees to avoid currency risk imbalances.
A positive funding rate indicates that longs (buyers) require more leverage. However, the opposite situation occurs when the shorts (shorts) require additional leverage, causing the funding rate to become negative.
As shown above, the seven-day cumulative funding rate is slightly positive for Bitcoin and Ether. The data points to slightly higher demand from longs (buyers), but nothing that would force traders to close their positions. For example, a positive weekly rate of 0.15% equals 0.6% per month, so unlikely to cause damage.
On the other hand, the altcoin 7-day perpetual futures funding rate was -0.30%. This rate is equivalent to 1.2% per month and indicates higher demand from shorts (sellers).
Signs of weak retail demand, as indicated by data from OKX Tether and the negative funding rate on altcoins, indicate that traders are unwilling to buy at the critical market cap of 1.65 trillion. of dollars. Buyers appear to be waiting for further declines before stepping in, so further price corrections will likely follow.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research before making a decision.
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