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Bitcoin and altcoins after the decline: the derivatives market paints a calmer picture



BTC and Altcoins have made heavy losses over the weekend, but data shows that the market is still pretty healthy, even if prices consolidate at this level for the short term.


If you look at last week's winners and losers, it is clear that traders have been worried as the total market capitalization of all cryptocurrencies fell 12.7 percent and Bitcoin fell to $ 41,000. With that slump, the market capitalization of all cryptocurrencies fell from $ 2.37 trillion to $ 1.92 trillion on December 3rd. In total, futures contracts worth $ 2 billion were liquidated .


Bitcoin ( BTC ) is down 14.6 percent in the past week, outperforming the altcoin market as a whole. The fact that it has performed worse is due to the popularization of decentralized applications. Data shows Ether ( ETH ) is down 6 percent, Binance Coin ( BNB ) is down 7.3 percent, and Solana ( SOL ) is down 7.8 percent.


This week's winners include OKEx's OKB token (OKB) and Bitfinex's UNUS (LEO). Perhaps they have benefited from the fact that they are not based in the USA because the regulatory uncertainties in the region continue to increase and are having an impact. In addition, the scaling solutions Polygon ( MATIC ) and Algorand (ALGO) benefited from very high transaction fees on Ethereum's network, which are $ 40 or higher.


Terra (LUNA) has done very well over the past week after its built-in token burn mechanism significantly reduced supply. Meanwhile, Stacks (STX), formerly Blockstacks, has seen an upturn as the D'Cent wallet now also supports SIP010 tokens.


Sharing solutions are disappointing this week

Three decentralized sharing solutions performed worst: Theta Network (THETA), Filecoin (FILE) and Internet Computer (ICP). In addition, some other altcoins from this area have collapsed. Siacoin (SC) slumped 34 percent and Ankr Network (ANKR) slumped 31.8 percent.


Chiliz (CHZ) has also declined a bit as Binance launched an independent soccer fan token called SANTOS. Originally, Chiliz's platform was supposed to offer exclusive promotions, services, and voting for their fan tokens. The project also recently entered the NFT market. But competition arose here too after soccer player Neymar brought out a collection with NFTStar.


Although 1inch Network's (1INCH) token has also performed very poorly, the decentralized exchange aggregator raised $ 175 million in a Series B funding round . This money is intended to expand the utility of the protocol.


Tether and perpetual premiums in futures hold up well


The Tether ( USDT ) premium on OKEx measures the difference between Chinese peer-to-peer (P2P) trading and the official US dollar currency, and has fallen slightly over the past week.


The indicator is currently at 98 percent, making it slightly bearish. This is due to weak demand from crypto traders to convert cash into stablecoins. Even at its best time in the last two months, it didn't go beyond 99 percent. So traders in China were not very pleased with the overall market.


Due to the correction last week, there was a 28 percent decrease in open interest to $ 16.7 billion. That development was expected, however, as total market capitalization fell and around $ 3.9 billion was liquidated over the course of the week.


Financing rates for Bitcoin and Ethereum futures have also rallied quickly after the December 3 slump. Even if long (buyer) and short (seller) positions are always opposed to one another in a futures contract, they have different levels of leverage.



As a result, the exchanges charge a funding rate for the side that has the greater leverage. This fee is paid to the other party.


The data shows that on December 3rd and 4th a slight downtrend began when the funding rate fell below zero. A negative funding rate means the shorts (sellers) had to pay the fees. But that movement subsided as BTC and ETH rebounded 15 percent from their lows.



The above data may not sound encouraging, but given that Bitcoin has seen significant losses this week, the overall market structure has held up well. If the situation were worse, one could definitely not observe such a tether premium or a positive perpetual financing rate.

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