Cryptocurrencies have failed to overcome the $1.1 trillion market cap resistance that has been holding for the past 54 days. The top two coins held the market back as Bitcoin (BTC) shed 2.5% and Ether (ETH) retraced 1% over the past seven days, but several altcoins posted solid gains.
The cumulative capitalization of the cryptocurrency markets fell by 1% to $1.07 trillion between July 29 and August 5. reports On August 4, the US Securities and Exchange Commission (SEC) investigates every US cryptocurrency exchange after the regulator accused a former Coinbase employee of insider trading.
While the two leading crypto assets failed to show weekly gains, traders’ appetite for altcoins was unaffected. Investors were positively impacted by Coinbase’s partnership with BlackRock, the world’s largest financial asset manager responsible for $10 trillion in investments.
Coinbase Prime, a service offered to BlackRock clients, is an institutional trading solution that provides trading, custody, financing, and staking for over 300 digital assets. Therefore, comparing winners and losers among the top 80 coins is skewed, as 10 of them are up 12% or more in the last seven days:
FLOW is up 48% after Instagram announced Flow blockchain support through Dapper Wallet. The social network controlled by Meta (formerly Facebook) is expanding the integration of non-fungible tokens.
Filecoin (FIL) added 38% next the Skyr v16 update on August 2, which strengthened the protocol to avoid vulnerabilities.
VeChain (VET) gained 16.5% after some news sources incorrectly announced a partnership with Amazon Web Services (AWS). VeChain Foundation explained that the reference to AWS was first cited in the May 9 case study.
Tether premium has deteriorated slightly
The OKX Tether (USDT) premium is a good indication of the demand of retail cryptocurrency traders in China. It measures the difference between peer-to-peer transactions in China and the US dollar.
Excessive buying demand tends to put pressure on the indicator above fair value at 100%, and during bear markets, Tether’s market supply overflows, resulting in a discount of 4% or more.
The Tether premium is currently at 98.4%, which is the lowest level since June 10th. Despite the fact that the indicator is far from retail panic sales, the indicator showed a slight deterioration over the last week.
However, weaker retail demand is not worrisome as it partly reflects the 69% decline in overall cryptocurrency capitalization since the start of the year.
Futures markets show mixed sentiment
Perpetual contracts, also known as reverse swaps, have an embedded rate, usually charged every eight hours. Exchanges use this fee to avoid currency risk imbalance.
A positive funding rate indicates that longs (buyers) require more leverage. However, the reverse situation occurs when shorts (sellers) require additional leverage, as a result of which the funding rate becomes negative.
As shown above, the cumulative seven-day funding rate is either slightly positive or neutral for the largest open interest cryptocurrencies. Such data indicates a balanced demand between longs (buyers) and shorts (sellers).
Given the lack of demand for Tether in Asia and mixed premiums on perpetual contracts, traders are lacking confidence as overall crypto capitalization struggles with $1.1 trillion resistance. As such, the bears seem to be having the upper hand at this time, given the uncertainty caused by the SEC’s indictment of the former Coinbase manager.
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Credit : cointelegraph.com