This week’s dovish regulatory actions and talk haven’t been strong enough to dampen investor appetite for cryptocurrency.
Total crypto market capitalization fell to $1.13 trillion on February 16, but the structure of the month-long upward channel remained unchanged. More importantly, this level represents a 43% increase in 2023, a far cry from the $3 trillion level reached in November 2021. However, the current recovery is noteworthy.
As shown above, the bullish wave that began in mid-January left some room for a 10% correction to $1 trillion without breaking the bullish pattern.
Investors responded favorably to the 5.6% annual increase in U.S. consumer price inflation. on February 14 and a 3% month-over-month increase in retail sales on February 15. Bitcoin:
BTC:
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$23774
had the biggest positive impact on crypto-capitalization as its price rose 12.5% week-on-week.
One area of concern is the February 16 story about Binance.US financial transactions with Merit Peak, a trading firm run by CEO Changpeng Zhao. Interestingly, Reuters reported that a Binance.US spokesperson said that Merit Peak “does not trade or provide any kind of services on the Binance.US platform.”
The overall 10.1% week-on-week increase in market capitalization lagged behind BNB’s modest 1.8% gain.
BNB:
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$307
and XRP
XRP: 1.1.
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$0.38 that
2.5% increase in price. On the other hand, only three of the top 80 cryptocurrencies ended the week with negative results.
Decentralized storage solution Filecoin
PHIL:
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$6.96 that
scored 59% and internet Computer
ICP:
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$6.44 that
increased by 52% as demand on the Bitcoin blockchain for non-fungible token (NFT) signature significantly increased block space.
GMX gained 34% while the protocol received a $5 million transaction fee in one day.
The LDO of the Lido DAO rallied 34% as beneficiaries evaluated bids to manage 20,300 Ether
ETH:
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1658 dollars
held by the corporate treasury.
The need for leverage was balanced despite the generalized rally
Perpetual contracts, also known as reverse swaps, have a built-in rate that is typically charged every eight hours. Exchanges use this fee to avoid an imbalance in exchange risk.
A positive financing rate indicates that long term (buyers) require more leverage. However, the opposite situation occurs when shorts (sellers) require additional leverage, causing the funding rate to become negative.
The seven-day funding rate is close to zero for Bitcoin and Ether, meaning the data shows a balanced demand between leverage (buyers) and shorts (sellers).
Interestingly, BNB is no longer a top six cryptocurrency ranked by futures open interest due to investor demand for Polygon’s MATIC.
MATIC
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$1.2770
In February, markets were up 70%.
The put options/call ratio remains bullish
Traders can gauge overall market sentiment by measuring whether there is more activity in call options (buy) or put options (sell). Generally, call options are used for bullish strategies while put options are for bearish strategies.
A put-to-call ratio of 0.70 indicates that the open interest of the put options lags the more bullish calls by 30% and is therefore bullish. In contrast, the 1.40 figure is 40% in favor of put options, which can be considered bearish.
Related: Bitcoin price derivatives seem a bit warm, but data suggests bears abound
Although Bitcoin price failed to break through the $25,000 resistance, demand for bullish call options has been more than neutral to bearish values since February 14.
Currently, the put-to-call ratio is approaching 0.40, as the options market is more populated with neutral to bullish strategies that prefer call options (calls) at 2x.
From a derivatives market perspective, there are no signs of demand from short sellers, while showing the
