Despite the fact that proof-of-work mining was not subjected to significant regulatory pressure, crypto derivatives and CNY Tether premium illustrate a lack of interest from investors.
Investors became more confident in adding altcoin positions following Bitcoin’s third consecutive rejection. The road to $50,000 for the major cryptocurrency appears to be steeper than previously anticipated.
According to Euronews Next, the European Union rejected a proposed rule on March 14 that would have forbidden energy-intensive proof-of-work (PoW) mining algorithm used by Bitcoin and other cryptocurrencies. Overpowering electricity costs has been a major concern for EU parliamentarians.
BTC/USD price at FTX. Source: TradingView
Overall, the aggregate market capitalization of all cryptos remained stable for the past seven days, increasing by only 0.4% to $1.77 trillion. However, the apparent lack of performance in the overall market does not apply to some mid-capitalization altcoins that gained 17% or more in one week.
Bitcoin grew 2.5% over the previous seven days, while Ether (ETH), the second-largest cryptocurrency by market capitalization, increased 3.6%. However, they were unable to keep up with the altcoin rally. The top gainers and losers among the 80 most valuable cryptocurrencies are listed below.
Weekly winners and losers among the top-80 coins. Source: Nomics
On March 10, THORChain (RUNE) increased in value when it enabled synthetic tokens. These derivatives are linked to the value of other underlying collateralized assets. In THORChain’s case, 50% of the project’s synths will be backed by real assets and 50% will be backed by RUNE.
The prices of secure anonymity tokens ZCash (ZEC) and Monero (XMR) rose on Tuesday, following the United States President Joe Biden’s signing of an executive order on March 9 that aimed to establish a regulatory framework for cryptocurrencies, with their potential use in evading sanctions.
Lastly, Terra (LUNA) rallied after Terraform Labs donated $1.1 billion to Luna Foundation Guard’s (LFG) reserves on March 11. LFG was launched in January as part of a broader effort to grow the Terra ecosystem and improve the sustainability of the network’s stablecoins.
Fantom was the worst performer among notable Fantom Foundation team members Andre Cronje and Anton Nell announced their departure, according to Coinmarketcap.com.
Meanwhile, the Celo (CELO) Foundation announced a hacking on its third-party email service on March 10. A phishing message was delivered to all of its 25,741 users; however, the attack was swiftly researched and posted alerts by the Celo Foundation on social media.
The Tether premium reflects the firm’s resilience in the face of competitive pressure from retail.
The OKX Tether (USDT) premium is an indication of China-based retail trader crypto demand. It tracks the difference between Chinese USDT peer-to-peer transactions and the official US dollar currency.
A buying frenzy drives the indicator up above fair value, which is 100 percent. Tether’s market supply is swamped during bearish markets, resulting in a 4% or greater discount.
Tether (USDT) peer-to-peer vs. USD/CNY. Source: OKX
The Tether premium is currently at 100.7 percent, which is neutral. However, there has been a gradual rise in the past two months. This information suggests that consumer demand is increasing, which is good because the total cryptocurrency market capitalization fell 50% between January 1 and March 14.
Funding rates show a lack of excitement
Perpetual contracts, also known as inverse swaps, have an imposed rate that is charged every eight hours. Because the price of perpetual futures tends to mirror spot markets precisely, retail traders prefer them.
The fee is paid by exchanges to avoid exchange risk imbalances. A favorable funding rate indicates that longs (buyers) want more leverage. However, when shorts (sellers) desire more leverage, the funding rate turns negative.
Seven-day accumulated perpetual futures funding rate on March 14. Source: Coinglass
Look at how uneventful the accumulated seven-day financing rate is in most situations. Such data suggests a healthy balance of leverage between buyers and sellers.
When it comes to trading leverage, we just have to remember that it can’t be negative. The weekly rate of Polkadot’s (-0.30 percent) is equivalent to 1.2% per month, making it irrelevant for traders establishing futures positions. When there’s an imbalance brought on by excessive pessimism, that rate has historically exceeded 5
The third fall of Bitcoin prices above $42,000 was seen as the death nail for bulls, as Bitcoin failed to demonstrate strength in the midst of global macroeconomic uncertainty and a powerful commodity rally.
Nonetheless, there are no signals of bearishness from Asian retail traders, as indicated by the CNY Tether premium, and there is no sign of leverage shorts (sellers) on futures markets.
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