Looking at the winners and losers from last week clearly shows that traders endured serious heat as the total crypto market capitalization fell by 12.7% when Bitcoin fell to $ 41,000. This sharp downward movement dropped the figure from $ 2.37 trillion to $ 1.92 trillion on December 3 and a total of $ 2 billion of long-term futures contracts were settled.
The price of Bitcoin (BTC) fell 14.6% over the past week, underperforming the overall altcoin market. Part of this unusual movement can be explained by the performance observed in decentralized applications, which held up better than most of the market. Data shows that Ether (ETH) traded down 6.0%, Binance Coin (BNB) lost 7.3%, and Solana (SOL) fell 7.8%.
Among this week’s top winners are Bitfinex’s OKB token (OKB) and Bitfinex’s UNUS (LEO). Perhaps they benefited from not having an entity in the United States, as regulatory uncertainty in the region continues to mount. Additionally, Polygon (MATIC) and Algorand (ALGO) scaling solutions benefited from Ethereum’s network transaction fees of $ 40 or more.
Terra (LUNA) was among the top performers last week after its built-in token-burning mechanism significantly reduced supply. For its part, Stacks (STX), formerly known as Blockstacks, soared after the D’Cent purse will include support for SIP010 tokens.
Exchange solutions had a disappointing week
Among the worst performers were three decentralized exchange solutions: Theta Network (THETA), Filecoin (FILE) and Internet Computer (ICP). They weren’t the only ones, as some of the sector’s altcoins below the top-80 also plummeted. Siacoin (SC) suffered a 34% decline and Ankr Network (ANKR) fell 31.8%.
Chiliz (CHZ) suffered direct competition after Binance successfully launched an independent token for soccer fans called SANTOS. Chiliz’s platform was initially created to host exclusive promos, services and votes for its fan tokens, and more recently the project ventured into the non-expendable NFT market. However, that initiative also lost impact after footballer Neymar launched a collection with NFTStar.
Despite being among the lowest performing, decentralized exchange aggregator 1inch Network (1INCH) concluded a $ 175 million Series B investment round and these funds will be used to expand the utility of the protocol.
The OKEx Tether (USDT) premium measures the difference between China-based peer-to-peer (P2P) operations and the official currency of the US dollar, and in the last week it decreased slightly.
The indicator is currently reading 98%, which is slightly bearish, indicating weak demand from cryptocurrency traders to convert cash into stablecoins. Even at its best over the past two months, it failed to break above 99%, so Chinese traders have not been enthusiastic about the overall market.
The overall impact of last week’s correction was a drop in total futures open interest, 28% to $ 16.7 billion. However, the movement was to be expected, as the total market capitalization fell and during the week there were liquidations worth 3.9 billion dollars.
Most importantly, the funding rates for Bitcoin and Ethereum futures quickly recovered from the December 3 price drop. Although longs (buyers) and shorts (sellers) coincide at all times in any futures contract, their leverage varies.
Consequently, to balance their risk, exchanges will charge a funding fee to the party that uses the most leverage and this fee is paid to the opposing party.
The data reveals that there was a modest downtrend on December 3 and 4, as the 8-hour finance rate fell below zero. A negative funding rate shows that shorts (sellers) were the ones paying the fees, but the move faded as soon as BTC and ETH prices bounced 15% from their lows.
The above data may not seem encouraging, but considering that Bitcoin suffered considerable losses this week, the overall market structure held up well. If the situation were worse, a 99% Tether premium or a positive perpetual financing rate would definitely not be expected.
The views and opinions expressed here are solely those of the Author and do not necessarily reflect the views of Cointelegraph.com. Every investment and business move involves risk, you should do your own research when making a decision.
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