Bitcoin and altcoins took a hit, but derivatives data reflects a calmer market

The winners and losers of this weeks crypto market capitalization drop by 12.7% after Bitcoin dropped to $41,000 clearly shows that traders were subject to severe heat. This dramatic downside move saw the total crypto market capitalization drop from $2.37 trillion down to $1.92 trillion Dec. 3. A total of $2 billion in long-term contracts was liquidated.

Top 80 coins: Top winners and losers Source: Nomics

Bitcoin (BTC), which has a 14.6% retracement over the last week, was effectively below the wider altcoin market. This unusual move can partly be explained by decentralized applications performance, which performed better than the rest of the market. Data shows that Ether (ETH), Binance Coin (BNB), and Solana(SOL) fell by 6.0%, 7.3%, and 7.3% respectively.

OKExs OKB token, OKB (OKB), and Bitfinex’s UNUS (LEO) were this weeks top gainers. These entities may have benefited from not being an entity of the United States because of the increasing regulatory uncertainty in the region. Algorand and Polygon (MATIC), which are scaling solutions, benefited from the $40 or higher transaction fees on Ethereum.

Terra (LUNA), which was featured last week on the top performers, had its token burn mechanism drastically reduced supply. Stacks (STX), formerly known as Blockstacks was pumped after DCent wallet supported SIP010 tokens.

The week of sharing solutions was disappointing

Three decentralized sharing solutions were among the worst performers: Filecoin (FILE), Theta Network, and Internet Computer. These were not the only ones that crashed, as many of the altcoins in the sector below the top 80 also crashed. Siacoin (S.C.), suffered a 34% drawdown, and Ankr Network(ANKR) fell by 31.8%.

After Binance launched an independent soccer token called SANTOS, Chiliz (CHZ), was directly challenged. Chilizs platform was initially created to offer exclusive promos, services, and voting for their fan tokens. More recently, the project expanded into the non-fungible NFT marketplace. After Neymar, a soccer player, launched a collection with NFTStar, the initiative was also lost.

Decentralized exchange aggregator 1inch Network (1INCH), despite being one of the lowest performers, closed a $175 Million Series B round of investment. These funds will be used for expanding the protocols utility.

Tethers premium was well held and futures perpetual premium also.

The OKEx Tether premium (USDT), measures the difference between Chinas peer-to-peer trades (P2P) and the official U.S. currency. It has decreased slightly in the past week.

OKEx USDT peer-to-peer premium vs. USD. Source: OKEx

The indicator currently has a 98% reading. This is slightly bearish and signals that there is little demand from crypto traders for stablecoins. It has not exceeded 99% even at its peak over the last two months. This is why Chinese players arent excited about the market.

The overall effect of last week’s correction was a 28% drop in total futures open interests to $16.7 billion. The move was still expected, as the total market cap fell and liquidations of $3.9 billion occurred during the week.

Moreover, funding rates for Bitcoin and Ethereum futures have quickly recovered after the Dec. 3 price collapse. Although both longs and shorts are equal in every futures contract they trade, their leverage can vary.

To balance the risk, exchanges may charge a funding fee to the side that uses more leverage. This fee is also paid to the opposite side.

Rates of 8-hour funding for BTC and ETH perpetual options. Source:

Data shows that there was a slight bearish trend on December 3 and 4, when the 8-hour funding rates fell below zero. A negative funding rate indicates that sellers (shorts) paid the fees. However, the movement subsided as soon as BTC/ETH prices rebounded 15% from their lowest levels.

Although the above data may not be encouraging, considering Bitcoins substantial losses this week, it is clear that the market structure held up well. Even if the situation were worse, one wouldnt expect a 99% Tether premium nor a positive perpetual financing rate.

Risk is inherent in every investment or trading move. Before making any investment or trading move, you should do your research.