Total crypto market cap drops to $850B as data suggests further downside


The entire cryptocurrency market capitalization dropped by 24% between Nov. 8 and Nov. 10, reaching a $770 billion low. Nonetheless, after the preliminary panic was subdued and compelled future contracts liquidations have been now not pressuring asset costs, a pointy 16% restoration adopted.

Complete crypto market cap in USD, 2-days. Supply: TradingView

This week’s dip was not the market’s first rodeo under the $850 billion market capitalization stage, and the same sample emerged in June and July. In each instances, the assist displayed power, however the $770 billion intraday backside on Nov. 9 was the bottom since December 2020.

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The 17.6% weekly drop in whole market capitalization was principally impacted by Bitcoin’s (BTC) 18.3% loss and Ether’s (ETH) 22.6% unfavourable worth transfer. Nonetheless, the worth impression was extra extreme on altcoins, with 8 of the highest 80 cash shedding 30% or extra within the interval.

Weekly winners and losers among the many high 80 cash. Supply: Nomics

FTX Token (FTT) and Solana (SOL) have been severely impacted by liquidations following the insolvency of FTX alternate and Alameda Analysis.

Aptos (APT) dropped 33% regardless of denying rumors that Aptos Labs or Aptos Basis treasuries have been held by FTX.

Stablecoin demand remained impartial in Asia

The USD Coin (USDC) premium is an effective gauge of China-based crypto retail dealer demand. It measures the distinction between China-based peer-to-peer trades and the USA greenback.

Extreme shopping for demand tends to strain the indicator above truthful worth at 100% and through bearish markets, the stablecoin’s market supply is flooded, inflicting a 4% or increased low cost.

USDC peer-to-peer vs. USD/CNY. Supply: OKX

At the moment, the USDC premium stands at 100.8%, flat versus the earlier week. Due to this fact, regardless of the 24% drop in whole cryptocurrency market capitalization, no panic promoting got here from Asian retail traders.

Nonetheless, this information shouldn’t be thought of bullish, because the USDC shopping for strain signifies merchants search shelter in stablecoins.

Few leverage consumers are utilizing futures markets

Perpetual contracts, also called inverse swaps, have an embedded charge normally charged each eight hours. Exchanges use this charge to keep away from alternate danger imbalances.

A constructive funding charge signifies that longs (consumers) demand extra leverage. Nonetheless, the alternative scenario happens when shorts (sellers) require extra leverage, inflicting the funding charge to show unfavourable.

Perpetual futures 7-day funding charge on Nov. 11. Supply: Coinglass

As depicted above, the 7-day funding charge is barely unfavourable for the 2 largest cryptocurrencies and the information factors to an extreme demand for shorts (sellers). Regardless that there’s a 0.40% weekly value to keep up open positions, it isn’t worrisome.

Merchants also needs to analyze the choices markets to grasp whether or not whales and arbitrage desks have positioned increased bets on bullish or bearish methods.

The choices put/name ratio factors to worsening sentiment

Merchants can gauge the general sentiment of the market by measuring whether or not extra exercise goes via name (purchase) choices or put (promote) choices. Typically talking, name choices are used for bullish methods, whereas put choices are for bearish ones.

A 0.70 put-to-call ratio signifies that put choices open curiosity lag the extra bullish calls by 30% and is subsequently bullish. In distinction, a 1.20 indicator favors put choices by 20%, which will be deemed bearish.

BTC choices put-to-call ratio. Supply:

As Bitcoin worth broke under $18,500 on Nov. 8, traders rushed to hunt draw back safety. In consequence, the put-to-call ratio subsequently elevated to 0.65. Nonetheless, the Bitcoin choices market stays extra strongly populated by neutral-to-bearish methods, as the present 0.63 stage signifies.

Combining the absence of stablecoin demand in Asia and negatively skewed perpetual contract premiums, it turns into evident that merchants usually are not comfy that the $850 billion market capitalization assist will maintain within the close to time period.