Bitcoin’s recent gains have traders calling a bottom, but various metrics remain bearish
Bitcoin has been on a rollercoaster ride after rising to all-time highs in December. With its recent gains, investors are calling the end of the bear market and predicting that Bitcoin will cross $10K soon. However, while short-term momentum is encouraging, long-term metrics show continuing trouble ahead for cryptos across the board with
a lack of general investor involvement causing instability fueled by high volatility
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The “which of the following is not a characteristic of blockchain” is an important question to answer. The answer is that blockchain does not have any characteristics.
The whole crypto market capitalization increased by 4% on May 30 and is already approaching $1.3 trillion in market value. Bitcoin’s (BTC) 4.9 percent increase over that time period was mostly responsible for the advance, which was enough to offset losses from the preceding seven days.
The total market capitalization of cryptocurrencies is USD billion. TradingView is the source of this information.
Cardano (ADA) was the only large-cap cryptocurrency to end the week with a positive 4.5 percent return, apart from Bitcoin. Meanwhile, cryptocurrencies including as Ether (ETH), Binance Coin (BNB), XRP (XRP), and Solana (SOL) failed to post weekly increases.
Bitcoin’s turn-around happened after the United States stock market presented gains for the first time after 7 consecutive negative weeks. The longest losing streak in over a decade for the S&P 500 was followed by a 6.6% positive performance at the closing bell on May 22.
“A strong set of quarterly reports from big retailers helped at least temporarily assuage fears about the toll inflationary pressures may have on profit margins,” according to Yahoo! Finance. For example, Macy’s (M) rose 29.1 percent this week, followed by Nordstrom (JWN), which rose 25.4 percent, and Ross Stores (ROST), which rose 21.5 percent.
Surprisingly, on May 25, JP Morgan handed out a research note to customers claiming that the fair value of Bitcoin was $38,000. The collapse of Terra (LUNA) had no impact on the demand for crypto venture capital, according to the global investment bank.
PayPal vice president Richard Nash highlighted the company’s desire to embrace all conceivable crypto and blockchain services on May 23 at the World Economic Forum (WEF) in Davos, Switzerland. PayPal continues to develop its digital currency-related business after launching Bitcoin trading throughout the United States in 2020.
The winners and losers from the previous seven days are shown below. While the most popular cryptocurrencies saw little fluctuation, other altcoins with a mid-capitalization showed a lot of volatility.
The top 80 coins have weekly winners and losers. Nomics is the source of this information.
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Synthetix (SNX) gained 15.8% when the volume of Kwenta, a Synthetix-powered zero-slippage derivatives trading platform, topped $325 million.
On May 27, information of Improvement Proposal #51 were disclosed, and Helium (HNT) gained 15.2 percent. The update adds a framework that allows subnets to have their own token and governance.
After prohibiting mainland Chinese consumers from using its mobile app, STEPN Governance (GMT) dropped 14.6 percent of its value.
Terra Luna Classic (LUNC), formerly known as LUNA, fell 12.2% after South Korean authorities summoned all Terraform Labs personnel as part of a large-scale inquiry.
Because altcoin markets have had a mixed record, it’s interesting looking at how traders are positioned using trading and derivatives indicators.
Tether’s premium demonstrates a lack of retail demand.
The OKX Tether (USDT) premium is a solid indicator of crypto demand among Chinese retail traders. It calculates the difference between peer-to-peer (P2P) transactions in China and the US currency.
Excessive purchasing pressure pushes the indication over its fair value. Tether’s market offer, on the other hand, is inundated during weak markets, resulting in a 4 percent or larger discount.
Peer-to-peer Tether (USDT) vs. USD/CNY OKX is the source of this information.
Tether premiums in CNY terms averaged a 2% discount between May 23 and May 30, indicating a lack of retail demand. More significantly, the 4% increase in the market capitalization of cryptocurrencies on May 30 had little effect on investor mood.
Related: Crypto’s newest investors weather the storm — and the news
Altcoin derivatives indications are somewhat pessimistic.
Inverse swaps, often known as perpetual contracts, feature an imbedded rate that is charged every eight hours. This charge is used by exchanges to minimize exchange risk imbalances.
Longs (buyers) seek additional leverage when the financing rate is positive. When shorts (sellers) need more leverage, the funding rate becomes negative, leading the funding rate to go negative.
On May 30, the permanent futures financing rate was accumulated. Coinglass is the source of this information.
Bitcoin and Ether had a somewhat positive (bullish) financing rate, whereas altcoins had the reverse. Solana’s minus 0.20 percent weekly rate, for example, equates to 0.8 percent each month, which is inconsequential to most futures traders.
Investors aren’t rushing in to check that the current price rebound is a trend shift, according to the data. Traders are pricing in a bigger chance of a decline, despite the fact that the whole crypto market capitalization has broken above the $1.3 trillion support level. According to trade measures, there is no apparent evidence of a market bottom yet.
The author’s thoughts and opinions are purely his or her own and do not necessarily represent those of Cointelegraph. Every investing and trading decision has some level of risk. When making a choice, you should do your own research.
Bitcoin is the world’s most popular cryptocurrency, and its recent gains have traders calling a bottom. However, various metrics remain bearish. Reference: will cryptocurrency crash.
which of the following is not a characteristic of bitcoin