Total cryptocurrency market cap has been moving in a 24-day downtrend channel; on May 6, support at $ 1.650 billion was tested again. This contraction is due to the fact that Bitcoin (BTC) plunged to $ 35,550, the lowest price in 70 days.
In terms of performance, the aggregate market capitalization of all cryptocurrencies has dropped 6% over the past seven days. The performance of some mid-cap altcoins, which lost 19% or more over the same period, is worse.
Altcoins have suffered the most
Over the past seven days, the price of Bitcoin has fallen by 6% and that of Ether (ETH) of 3.5%. But if you look below the main digital assets, you are witnessing a real bloodbath.
There are however some exceptions. Tron (TRX) gained 26.9% after TRON DAO launched USDD, a decentralized stablecoin, on May 5. a algorithmic stablecoin is linked to Ethereum and BNB Chain (BNB) through the BTTC cross-chain protocol.
1inch (1INCH) gained 5.6% after decentralized exchange governance enforcement she became a leader on the Polygon (MATIC) network by completing 6 million swaps.
STEPN (GMT), the native token of the move-to-earn app of the same name, lost 35.7% of its value after a 70% rally between 18 and 28 April. Similar movement also for Apecoin (APE), after a 94% pump between April 22 and April 28.
Tether Premium turned negative
L’OKX Tether (USDT) Premium measures the demand from retail users in China, as well as the difference between peer-to-peer trade in China and the US dollar.
Excessive demand places this indicator above its fair value of 100%. However, the exact opposite happened: the bear market caused Tether to oversupply, causing it to shrink by around 1%.
The OKX Tether Premium peaked at 1.7% on April 30, indicating excess demand from retail traders. However, this metric dropped to 0% over the next five days.
More recently, in the early hours of May 6, Tether Premium turned 1% negative: investor sentiment worsened considerably as Bitcoin dipped below $ 37,000.
The futures markets show mixed sentiment
Perpetual contracts, also known as inverse swaps, have a built-in fee that is usually charged every eight hours. Exchanges use these fees to avoid currency risk imbalances.
A positive funding rate indicates that longs (buyers) require greater leverage. The opposite situation occurs when shorts (sellers) require additional leverage, causing the funding rate to turn negative.
As shown above, the seven-day 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% would equate to 0.6% monthly, so it is unlikely to cause harm.
On the other hand, the funding rate of the seven-day perpetual futures of the altcoins was -0.30%. This rate is equivalent to -1.2% per month, indicating higher demand from short (sellers).
The weak demand from retail users, as indicated by the OKX Tether Premium data, and the negative funding rate for altcoins are signs that traders are not interested in buying at these levels. Potential buyers appear to be waiting for further drops before proceeding, and further price corrections are likely to follow.
Risk Disclosure: The articles and articles on Arover.net do not constitute investment advice. Bitcoin and cryptocurrencies are high-risk assets, and you should do your due diligence and do your own research before investing in these currencies.