Cointelegraph Team
Cointelegraph
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.
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.
Top winners and losers from top 80 coins. Source: Nomics
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 OKEx’s 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 protocol’s utility.
Tether’s 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.
OKEx USDT peer-to-peer premium vs. USD. Source: OKEx
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 week’s 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.
BTC and ETH perpetual futures 8-hour funding rates. Source: Coinglass.com
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.
Latest Crypto News & Analysis
Editors’ Picks
Largest DeFi exploit of 2022 wipes out $80 million from Qubit's Ethereum-BSC bridge
Ethereum-BSC bridge of Qubit Finance suffered a hack to the tune of $80 million in the largest DeFi exploit of 2022. Hackers exploited the "deposit" function to steal cryptocurrencies from Qubit Finance.
Decentraland bulls go against the bearish trend, targeting $2.60
Decentraland (MANA) price has been on the front foot in a challenging market environment. MANA bulls look ready to eke out 28% of gains for this week after the price lifted from the 200-day Simple Moving Average (SMA) and is now set to pop and stay above the monthly S1 support level.
Charles Hoskinson awaits launch of Vaccuumlabs DEX on the Cardano network
Cardano network activity hit a peak with a spike in transactions on the network. Charles Hoskinson, the CEO of IOHK, is awaiting the launch of Vaccuumlab's DEX on the Cardano network.
Why Bitcoin has entered a new bear market
Bitcoin price has tumbled to a multi-month low below $33,000, as the leading cryptocurrency loses 50% of its value from its all-time high in November 2021. This marks the second-worst sell-off since the bear market that spanned from 2018 to 2020.
Bitcoin: Federal Reserve cannot tame BTC’s uptrend
Bitcoin experienced some significant losses over the past few weeks, with a more dramatic drop occurring this week after the Fed’s decision was announced. As losses have extended and Bitcoin has entered into the $30,000 zone, concerns regarding BTC being in a bear market have increased.