Any dip buyers left? Bulls are largely absent as the total crypto market cap drops to $1.65T

For 24 days, the total crypto market capitalization traded in a downward channel. The $1.65 trillion support was tested again on May 6. Bitcoin (BTC), which reached $35,550 on May 6, was the next to drop to $1.65 Trillion, marking its lowest price in 70 Days.

Market cap total for crypto, USD billion Source: TradingView

The aggregate market capitalization for all cryptocurrency fell 6% in the last seven days. However, this slight correction does not reflect any mid-capitalization altcoins that lost 19% or more during the same period.

As expected, altcoins suffered most

The Bitcoin price fell 6% over the past seven days and Ether (ETH), dropped by 3.5%. Altcoins went through what can only been described as a bloodbath. Here are the top gainers, and losers, among the 80 most valuable cryptocurrencies according to market capitalization.

Weekly winners and losers from the top 80 coins Source: Nomics

Tron (TRX), rallied 26.9% following the May 5th rollout of a USDD by TRON DAO, a decentralized stablecoin. Through the BTTC cross chain protocol, the algorithmic stablecoin can be connected to the Ethereum (ETH) and BNB Chains (BNB).

1.inch (1INCH), gained 5.6% following Polygon’s (MATIC), decentralized exchange governance app, which became the network leader through 6 million swaps.

After a rally of 70% between April 18-April 28, STEPN (GMT), which is the native token for the popular app Move-to-Earn, fell 35.7%. Apecoin’s (APE), which saw the token pump 94% between April 22-April 28 experienced a similar move.

On May 6, the Tether premium went negative

The OKX Tether premium (USDT), measures China-based retail demand. It also measures the difference between peer-to-peer trades in China and the United States dollar.

The indicator’s fair value is at 100% if there is excessive buying demand. Tether’s market offering is oversubscribed during bearish markets, leading to a 4% discount or greater.

Tether (USDT) peer-to-peer vs. USD/CNY. Source: OKX

On April 30, OKX Tether premium reached 1.7%, indicating that there was excess retail demand. Over the next five days, however, the premium reverted back to 0%.

In the early hours on May 6, OKX Tether premium fell to -1%. Data show that retail sentiment deteriorated after Bitcoin fell below $37,000.

Mixed sentiment is evident in futures markets

The embedded rate for perpetual contracts, also called inverse swaps or inverse contracts, is typically charged every eight hours. This fee is used by exchanges to avoid imbalances in exchange risk.

Positive funding rates indicate that buyers (longs) are looking for more leverage. The opposite happens when shorts (sellers), require more leverage. Therefore, the funding rate turns negative.

Accumulated 7 day perpetual futures funding rate Source: Coinglass

The accumulated seven-day funding rate for Bitcoin and Ether is slightly positive, as shown in the above. The data indicates that longs (buyers) are more in demand than shorts, but it is not enough to force traders into closing their positions. A positive rate of 0.1% per month is an example.

Altcoins’ 7 day perpetual futures funding rate was -0.30%. This rate is equivalent in monthly 1.2% and signals higher demand from sellers (shorts).

The OKX Tether data, which shows weak retail demand, and the negative funding rate for altcoins indicate that traders are not willing to purchase at the crucial $1.65 trillion crypto market capization. The buyers seem to be waiting for more dips before they step in. Therefore, further price corrections are likely.

Risk is inherent in every investment or trading move. Before making any investment or trading move, you should do your research.

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Eileen Wilson

Eileen Wilson –Technology and Energy My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.

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