Bitcoin Traders Are Expecting to Hold the $40,000

Whenever Bitcoin (BTC) fails to break through key resistance levels, traders gain confidence and establish their altcoin positions. Unless BTC plummets, moving portfolios to altcoins, with higher risks, will pay off for traders.

BTC/USDT | Source: TradingView

Over the past seven days, the aggregate capitalization performance of the crypto market has grown to $1.9 trillion.

Comparing the performance of tokens in the top 80 shows misleading results. For instance, while the best performing tokens saw an average gain of 24.9%, the worst performing tokens fell an average of 5.9%.

Performance of the top 80 coins | Source: Nomics

Terra (LUNA) is up 52% ​​in the week after blockchain ecosystem-powered nonprofit Terra sold $1 billion worth of tokens on Feb. 22. The Luna Foundation raised funds from Three Arrows Capital and Jump Crypto , the transaction pool previously supported the Solana Wormhole cross-chain bridge.

On February 21, WAVES surged 50.7% after announcing a partnership with Allbridge to make the cross-chain protocol interoperable, supporting the Ethereum Virtual Machine (EVM) and non-EVM chains like NEAR Protocol , Solana (SOL) and Terra (LUNA).

Arweave (AR) is up 28.5 percent in the seven days after Bundlr Network released its high-volume Twitter archiver on Feb. 21. The system allows users to store tweets and linked media directly to the set. eternal memory of Arweave.

Finally, QuickSwap, which implements Uniswap (UNI) on the Polygon network, has become the largest decentralized DEX protocol by trading volume, reaching a daily average of $40 million in February. Token UNI has gained 14.4% in the past seven days, while MATIC is up 8.5%.

Tether arbitrage reflects low retail demand

The OKX Tether (USDT) arbitrage is a measure of crypto demand by retail traders in China. It measures the difference between peer-to-peer transactions in China and the US dollar.

Overbought demand tends to put pressure on the indicator, causing it to have a fair value above 100%, and during bear markets the market supply of Tether is overloaded, causing a discount. 4% or more.

Peer-to-peer Tether (USDT) vs USD/CNY | Source: OKX

Currently, the Tether arbitrage is at a neutral 100.3%. However, the indicator is showing signs of steady growth in 2022. The data signals that retail demand is picking up, which is a positive sign as the total crypto market cap has dropped 19%. from January 1 to February 28.

Futures market is not positive

A perpetual contract, also known as a reverse swap, has an attached rate that is usually calculated every eight hours. Exchanges use this fee to avoid imbalance of exchange risk.

Funding rate greater than 0 indicates that buyers (longs) require more leverage. However, the opposite situation occurs when short sellers request more leverage, causing the funding rate to turn negative.

Funding rate of perpetual contract on Feb 28 | Source: Coinglass

As described above, the 7-day cumulative funding rate is negative in most contracts. This data shows that demand from short sellers is at a higher level, but not significantly. For example, Luna’s rate – 0.65% weekly is equivalent to – 2.8% monthly, a number that should not be too worrisome for futures traders.

If short sellers want to increase their risk appetite, the rate will be above 1% per week or equivalent to 4.6% per month.

Perpetual futures contracts are the preferred derivative of retail traders as their prices tend to follow the regular spot market. Therefore, even though the crypto performance is at -19% in 2022, the Tether arbitrage is at neutral and the funding rate is in the positive zone.

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