Although the total crypto market capitalization reached $2.23 trillion on April 3, it was only 1.9% higher between March 28th and April 4. Bitcoin (BTC), which experienced a 2.6% decline, was offset by gains from altcoins.
Market cap total for crypto, USD billion Source: TradingView
Ether (ETH), Binance Coin (BNB), gained less than 3% in the past seven days. However, a few mid-capitalization altcoins rallied 20% or more.
The Bitcoin network difficulty hit an all-time record at 28.587 trillion on April 1. This indicator is a measure of the computational power needed to mine Bitcoin blocks. It currently has a hash rate at 201.8 exahash per sec (EH/s).
The application for the ARK 21Shares bitcoin exchange-traded fund was officially rejected by the United States Securities and Exchange Commission (ETF) on the same day. Cboe BZX Exchange failed to meet the requirements for listing a financial product according to its rules of practice and the Exchange Act.
Comparing winners and losers can lead to distorted results, as the top-3 coins had a slight negative impact.
Weekly winners and losers from the top 80 coins Source: Nomics
Zilliqa (ZIL) rallied 56% after reports that it will launch a metaverse-as-a-service platform in April. A press release stated that Zilliqa’s Metapolis was being built using 3D real-time Nvidia Omniverse. Nvidia, a $684 billion Nasdaq listed graphic processing (GPU), producer.
Aave (AAVE), gained 38% following the March 16th release of Aave version 3. These new features were designed to increase capital efficiency, security, and cross-chain functionality. Non-custodial liquidity protocol lets users lend, borrow and stake their assets in order to generate yield.
Synthetix (SNX), rallied 28% following its Debt Pool Synthesis deployment, which was scheduled for April 7. The decentralized finance protocol currently operates two Ethereum chains, the mainnet and the layer-2 scaling solution Optimism. The application will merge its pooled liquidity by transitioning to an “Optimism native protocol”.
Apecoin (APE), which experienced a 60% increase between March 21-March 28, saw a natural correction as the firm behind it raised $450million in a round of funding led by Andreessen Horowitz. Yuga Labs (creator of the Bored Ape Yacht Club, or BAYC), created APE to provide a governance token and utility token that allows its owners to manage and oversee the ApeCoin DAO.
Tether Premium shows some discomfort
The OKXTether (USDT premium) is a useful indicator of China-based retail traders crypto demand. It is used to measure the difference between peer-to-peer Chinese trades and the United States Dollar.
An excessive buying demand can push the indicator over fair value at 100 percent. During bearish markets, Tether’s market offer floods and results in a 4% discount.
Tether (USDT) peer-to-peer vs. USD/CNY. Source: OKX
On April 2, the Tether reached 99.2%, its lowest level since January 26. This is still far from retail panic selling but the indicator did show a slight decline over the week.
Even though the cryptocurrency market cap exceeded $2 trillion, the lack of retail demand isn’t particularly alarming. The indicator has fallen 19% since December 2021.
Mixed sentiment is evident in futures markets
Mixed sentiment is currently reflected in perpetual contracts. The accumulated seven-day funding rate for Bitcoin, Ether and Solana is slightly positive, as shown in the below graph. Although this data suggests a higher demand from longs, it is not excessive. Solana’s positive weekly rate of 0.20% is 0.8% per month, so it should not concern most futures traders.
Rate of April 4th, 2019, for perpetual futures funding. Source: Coinglass
Terra (LUNA), on the other hand, showed slightly higher demand from shorts (sellers), and the lack of Tether demand for Asia indicates a lack in confidence from traders.
In just three weeks, the total market capitalization rose 26% from $1.67 trillion in April to $2.1 trillion in April 4. However, the derivatives indicators are showing no signs of improvement. Investors don’t trust them. The odds of a negative correction in price are high until sentiment improves.
Risk is inherent in every investment or trading move. Before making any investment or trading move, you should do your research.