Total Crypto Market Falls To ,$840B: Data Reveals Traders Are Neutral

Written by Senoria Khursheed ·  1 min read >

According to the latest updates, the total crypto capitalization has fallen 1.5% in the last seven days to rest at $840B.

Although, the overall sentiment is still bearish and year-to-date losses total 64%. However, the slightly negative movement did not break the ascending channel initiated on Nov 12.

According to the analysis, bitcoin has fallen by 0.8%, stabilizing near the $16,800 level at 10:00 UTC on Dec 8. Whereas, on Dec 6, the Financial Crimes Enforcement Network (FinCEN) stated, it is “looking carefully” at Decentralized finance(DeFi), according to the agency’s acting director Himamauli Das. Moreover, she said that digital asset ecosystem and digital currencies are a “key priority area”.

Moreover, a new licensing system for companies that provide virtual asset services was recently approved by Hong Kong’s legislative council. Earlier on the start of June 2023, cryptocurrency exchanges were governed by the same law as conventional financial institutions.

The 1.5% weekly drop in total market capitalization shows that it is impacted by Ether’s 3% negative price move and BnB traded down by 2.5%. Inspire of this, the bearish statement had a significant impact on alt pins with 10 of the 80 coins experiencing drops of at least 8%.

On the other hand, Trust Wallet (TWT) gained 18.6% as the service provider gained market share. When the wallet browser extension was launched in the middle of November.

Leverage Demands Is Balanced Between Bulls And Bears

A huge demand for leverage by buyers indicates a positive funding rate. Whereas, the funding rate turns into negative when sellers need more leverage. In contrast, which is the exact opposite situation.

If we talk about the bitcoin and Altcoin, the seven day funding rate was nearly zero. This indicates the data point creates a balance demand between leveraged long buyers and short term sellers in the period.

Traders need to analyze the options markets to understand whether whales and arbitrage desks have placed higher bets on bullish or bearish strategies.

The Options Call Ratio Reflects Moderate Bullishness

Traders can determine the mood of the market by observing whether more activity is occurring in buy or sell options. Call options are typically employed for bullish  strategies. Whereas, put options are utilized for bearish ones.

On the other hand,a 0.70 put to call shows that open interests in put options is 30% behind that of more bullish calls. Whereas , 1.40 indicator favours put options by 40% which is considered bearish.

Though, Bitcoin’s price failed to break the $17,500 resistance on Dec 5. Besides, there was only temporary excessive demand for downside protection.

Currently, the put to call volume ratio lies near 0.40.

Derivatives Markets Point To Upside Potential

According to derivatives metrics,there haven’t been any indications of sentiment deteriorating despite the weekly price. Which decline in a small number of alternative coins and the 2% decline in total market capitalization.

Even after Bitcoin’ price failed to break above the $17,500 mark. There is always a balanced demand for leverages using futures contract. The BTC options risk assessment metric is still favorable.

Since, the odds are in favor of the ascending channel, the market capitalization a SA whole has reached the $875B resistance.

After a week of bad news flow, a break above the channel would give bulls much-needed breathing room.

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