On May 12, the cryptocurrency market cap hit its lowest close in 10 months, with the indicator continuing to test the $1.23 trillion support level. However, his next seven days were fairly muted, with Bitcoin (BTC) up 3.4% of him and Ether (ETH) up just 1.5%. Currently, the total crypto cap is $1.31 trillion.
Ripple from the collapse of Terra (LUNA) continues to impact the crypto market, especially the decentralized finance industry. Additionally, the recent traditional market sell-off has reduced his $7.6 trillion market capitalization from the Nasdaq stock market index. That’s higher than the dotcom bubble and his March 2020 plunge.
Federal Reserve Chairman Jerome Powell on May 17 confirmed his intention to keep inflation under control by raising interest rates, but warned that the Fed’s tightening campaign could affect unemployment. .
Bearish sentiment rippled through the cryptocurrency market, with the data-driven sentiment gauge, the Fear and Greed Index, hitting 8/100 on May 17. Bitcoin (BTC) fell below $4,000 as crude oil futures hit negative levels.
Below are the winners and losers from the last 7 days. Two major cryptocurrencies showed modest gains, while a handful of mid-cap altcoins rose more than 15%.
Monero (XMR) rose 22% as investors waited for block 2,641,623 or “tail emissions” to be implemented around June 4th. Decided We include a minimum reward of 0.6 XMR in every block, so miners are not 100% dependent on transaction fees.
Cosmos (ATOM) rose 16.5%. The move appears to be part of a broader retracement that began on May 12 when ATOM fell to his 11-month low near $8. It is worth noting that its parent chain, Cosmos Hub, has witnessed a massive outflow of capital from its liquidity pool, according to a Cointelegraph report.
KLAY, a blockchain backed by South Korean internet giant Kakao, will provide infrastructure and initial nodes to develop early use cases for its blockchain-based service network (BSN), on May 16. market
Tether Premium Shows Minor Discomfort
OKX Tether (USDT) Premium is a good indicator of cryptocurrency demand for China-based retail traders. Measures the difference between China-based peer-to-peer (P2P) transactions and the US dollar.
Excessive buying demand tends to push the indicator above 100% fair value, and during bear markets Tether’s market offers flood in, causing discounts of 4% or more.
The Tether premium peaked at 5.4% on May 12, the highest level in more than six months, but the move was largely driven by the massive outflow of the Terra ecosystem, the USD Terra (UST) stablecoin. It may be related.
More recently, the indicator shows a slight deterioration as it currently holds a discount of 1.8%. The lack of retail demand is not particularly concerning as the cryptocurrency market capitalization has fallen by 34% in the past month.
Altcoin Futures Reflect Indifference to Leverage
Perpetual contracts, also known as inverse swaps, have built-in rates that are typically billed every 8 hours. Exchanges use this fee to avoid currency risk imbalances.
A positive funding rate indicates that longs (buyers) are demanding more leverage. However, the opposite situation occurs when the short (seller) requires additional leverage, resulting in a negative funding rate.
Perpetual contracts reflect mixed sentiment as Bitcoin and Ethereum maintain slightly positive (and bullish) funding rates, while altcoins show the opposite sign. For example, Solana’s (SOL) negative 0.35% weekly rate equates to 1.5% monthly, which is not a concern for most derivatives traders.
Investor confidence is lacking as the cryptocurrency market cap fights to maintain its $1.23 trillion support, given that derivatives metrics show little improvement. Until this sentiment improves, the potential for adverse price movements remains high.
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