Cryptocurrencies failed to break out of the 42-day downtrend after the $1.95 trillion cap resistance was rejected on March 20. Although Bitcoin (BTC) gained a modest 3.7% in the last seven days, altcoins put on a solid rally.
The aggregate capitalization of crypto markets showed an increase of 6.2% to $1.92 trillion between March 14 and 21. Said performance was positively affected by Ether (ETH) gains of 14%, Cardano (ADA) gain of 13% and Solana (SOL) gain of 10%.
While those assets were not the biggest weekly gains among the top 80 coins, Ether may have fueled investor expectations after on-chain data from Glassnode showed ETH balances on crypto exchanges hitting their lowest levels since 2018.
The comparison of winners and losers provides skewed results, as only two names posted negative returns in the last seven days:
Ethereum Classic (ETC) rallied 51% after decentralized exchange app HebeSwap will overcome the $290 million in total value locked. With liquidity pools growing on the protocol, Ethereum Classic appears to have its own decentralized finance (DeFi) hub.
AAVE gained 35% following its v3 liquidity pool update on March 16, adding cross-chain asset functionality, a community contribution tool, and a gas optimization model. Various decentralized wallet-based applications (DApps) will be integrated, including Instadapp, Debank, 1Inch, Paraswap, Zapper, DeFisaver, Zerion, and more.
Kusama (KSM) gained 31% after Parity Technology confirmed that it will enable sidechain swaps in the upcoming 0.9.18 release. Additionally, Manta Network’s on-chain privacy, Dolphin Testnet, reached 30,000 transactions on March 14.
Premium Tether shows slight annoyance
OKX Tether (USDT) premium is a good indicator of crypto demand from China-based retail traders. It measures the difference between peer-to-peer transactions based on China and the US dollar.
Excessive buying demand tends to push the indicator above 100% fair value, and during bear markets, Tether’s market supply is flooded, causing a discount of 4% or more.
Ethereum Classic (ETC) rallied 51% after the HebeSwap decentralized exchange application surpassed $290 million in total value locked. With liquidity pools growing on the protocol, Ethereum Classic appears to have a decentralized finance (DeFi) hub of its own.
Currently, the Tether premium stands at 99.9%, its lowest level since March 3. While far from panicky retail sales, the gauge showed moderate deterioration over the past week.
Even so, Weaker retail demand is not a concern as it partially reflects total cryptocurrency capitalization, which is down 46% year-to-date.
Futures markets show mixed sentiment
Perpetual contracts, also known as reverse swaps, have a built-in fee that is typically charged every eight hours. Exchanges use this fee to avoid currency risk imbalances.
A positive funding rate indicates that long buyers require more leverage. However, the opposite situation occurs when short sellers require additional leverage, causing the funding rate to turn negative.
As shown above, the seven-day cumulative funding rate is slightly positive for Bitcoin and Ether. This data indicates a slightly higher demand from longs (buyers), but it is insignificant. For example, Solana’s 0.20% positive weekly rate equates to 0.8% per month, which should not be a concern for most futures traders.
On the other hand, both Terra (LUNA) and Polkadot (DOT) futures showed slightly higher demand from short sellers. Therefore, the lack of demand for Tether in Asia and mixed perpetual premiums indicate a lack of confidence on the part of traders despite recent price gains.
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