Global blockchain supervision and query platform

English
Download

Bitcoin and altcoins took a hit, but derivatives data reflects a calmer market

 Bitcoin and altcoins took a hit, but derivatives data reflects a calmer market WikiBit 2021-12-06 22:19

BTC and altcoins took a beating over the weekend, but data shows a market with healthier trading conditions, even if prices consolidate for the foreseeable future.

Marcel Pechman

Bitcoin and altcoins took a hit, but derivatives data reflects a calmer market

BTC and altcoins took a beating over the weekend, but data shows a market with healthier trading conditions, even if prices consolidate for the foreseeable future.

Market Analysis

Looking at the winners and losers of the past week clearly shows that traders endured some serious heat as the total crypto market capitalization dropped by 12.7% when Bitcoin fell to $41,000. This sharp downside move knocked the figure from $2.37 trillion to $1.92 trillion on Dec. 3 and a total of $2 billion long future contracts were liquidated.

Bitcoin (BTC) price retraced 14.6% over the past week, effectively underperforming the broader altcoin market. Part of this unusual movement can be explained by the performance seen in decentralized applications which held up better than most of the market. Data shows Ether (ETH) traded down 6.0%, Binance Coin (BNB) lost 7.3% and Solana (SOL) dropped by 7.8%.

This week's top gainers include OKExs OKB token (OKB) and Bitfinex's UNUS (LEO). Perhaps these benefited from not having a United States entity because the regulatory uncertainties in the region continue to increase. Moreover, scaling solutions Polygon (MATIC) and Algorand (ALGO) benefited from Ethereum's $40 or higher network transaction fees.

Terra (LUNA) featured on last week's top performers after its built-in token burn mechanism significantly reduced the supply. Meanwhile, Stacks (STX), previously known as Blockstacks, pumped after D'Cent wallet included support for SIP010 tokens.

Sharing solutions had a disappointing week

Among the worst performers were three decentralized sharing solutions: Theta Network (THETA), Filecoin (FILE), and Internet Computer (ICP). They were not alone, as some of the sectors' altcoins below the top-80 also crashed. Siacoin (S.C.) endured a 34% drawdown and Ankr Network (ANKR) dropped by 31.8%.

Chiliz (CHZ) suffered direct competition after Binance successfully launched an independent soccer fan token called SANTOS. Initially, Chiliz platform was created to host exclusive promos, services and voting for their fan tokens and more recently the project ventured into the non-fungible NFT market. However, that initiative also lost impact after soccer player Neymar launched a collection with NFTStar.

Despite being among the bottom performers, decentralized exchange aggregator 1inch Network (1INCH) concluded a $175 million Series B investment round and these funds will be used to expand the protocols utility.

Tethers premium and the futures' perpetual premium held up well

The OKEx Tether (USDT) premium measures the difference between China-based peer-to-peer (P2P) trades and the official U.S. dollar currency, and in the past week it decreased slightly.

Currently the indicator has a 98% reading, which is slightly bearish, signaling weak demand from crypto traders to convert cash into stablecoins. Even at its best moment over the past two months, it failed to surpass 99%, so Chinese players have not been excited about the general market.

The overall impact of last weeks correction was a drop in the total futures open interest, down 28% to $16.7 billion. Nevertheless, the move was expected since the total market cap retraced and some $3.9 billion worth of liquidations took place during the week.

More importantly, the funding rates on Bitcoin and Ethereum futures quickly recovered from Dec. 3 price crash. Even though longs (buyers) and shorts (sellers) are matched at all times in any futures contract, their leverage varies.

Consequently, to balance their risk, exchanges will charge a funding rate to whichever side is using more leverage and this fee is paid to the opposing side.

Data reveals that a modest bearish trend occurred on Dec. 3 and 4 as the 8-hour funding rate went below zero. A negative funding rate shows that shorts (seller) were the ones paying the fees, but the movement faded as soon as BTC and ETH prices bounced 15% from their lows.

The above data might not sound encouraging, but considering that Bitcoin suffered considerable losses this week, the overall market structure held nicely. If the situation was worse, one would definitively not expect a 99% Tether premium or a positive perpetual funding rate.

The views and opinions expressed here 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 when making a decision.

Disclaimer:

The views in this article only represent the author's personal views, and do not constitute investment advice on this platform. This platform does not guarantee the accuracy, completeness and timeliness of the information in the article, and will not be liable for any loss caused by the use of or reliance on the information in the article.

Related exchange
OKB
OKB
Reputation Ratings
OKB | Platform Currency | 5-10 years
WHEN
WHEN
Reputation Ratings
WHEN Token | 5-10 years
SOL
SOL
Reputation Ratings
Solana | 2-5 years
ALGO
ALGO
Reputation Ratings
Algorand | 5-10 years
MATIC
MATIC
Reputation Ratings
Matic Network | 5-10 years
1INCH
1INCH
Reputation Ratings
1inch Token | 2-5 years
OKEX
Regulated
OKEX
Score

8.35

2-5 years | Digital Currency License | MTL License | Common Financial Service License | MSB License | Suspicious Overrun | High potential risk
ZeroHash
Regulated
ZeroHash
Score

7.1

2-5 years | MTL License | Digital Currency License
ICP
ICP
Reputation Ratings
Internet Computer | 2-5 years
ETH
Deluxe
ETH
Reputation Ratings
Deluxe | Ethereum | 10-15 years
NFT
NFT
Reputation Ratings
APENFT | 2-5 years
ONE
ONE
Reputation Ratings
Harmony | 5-10 years
EOS
EOS
Reputation Ratings
EOS | 5-10 years
YIELD
YIELD
Reputation Ratings
Yield Protocol | 2-5 years
STX
STX
Reputation Ratings
Blockstack | 5-10 years
BTC
Deluxe
BTC
Reputation Ratings
Deluxe | Bitcoin | 15-20 years
THETA
THETA
Reputation Ratings
THETA | 5-10 years
LUNA
LUNA
Reputation Ratings
Terra | 5-10 years
BINANCE
Regulated
BINANCE
Score

9.33

5-10 years | MTL License | Company Registration | MSB License | Suspicious Overrun | High potential risk
DATA
DATA
Reputation Ratings
Streamr | 5-10 years
FOR
FOR
Reputation Ratings
ForTube
LTC
LTC
Reputation Ratings
Litecoin | 10-15 years
LEO
LEO
Reputation Ratings
UNUS SED LEO | 5-10 years
OKX
Regulated
OKX
Score

9.06

10-15 years | Digital Currency License | MTL License | Common Financial Service License | MSB License | Suspicious Overrun | High potential risk
ANKR
ANKR
Reputation Ratings
Ankr
CHZ
CHZ
Reputation Ratings
Chiliz | 5-10 years
CENT
CENT
Reputation Ratings
CENTERCOIN
USDT
Deluxe
USDT
Reputation Ratings
Deluxe | Tether | 10-15 years
XRP
XRP
Reputation Ratings
Ripple | 10-15 years
Bitget
Regulated
Bitget
Score

7.94

5-10 years | Digital Currency License | Common Financial Service License | MSB License | Suspicious Overrun | High potential risk
TOP
TOP
Reputation Ratings
TOP
BNB
BNB
Reputation Ratings
Binance Coin | Platform Currency | 5-10 years
NEW
NEW
Reputation Ratings
Newton | 5-10 years
PART
PART
Reputation Ratings
Particl | 5-10 years
  • Token conversion
  • Exchange rate conversion
  • Calculation for foreign exchange purchasing
/
PC(S)
Current Rate
Available

0.00