The total crypto market cap is in danger of falling below $825 billion, but data shows traders are actively increasing their long and short positions.

The cryptocurrency’s total market cap is down 8.1% over the past two days after failing to break the $880 billion resistance on Dec. 14.

The rejection did not invalidate the 4-week ascending channel, but a weekly close below $825B will confirm a move into the lower band and lower the $790B support level.

Total crypto market cap in USD, 12 hours. Source: Trade View
Overall investor sentiment towards the market remains bearish with year-to-date losses totaling 66%. Still bitcoin

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The price fell just 2% this week to reach the $16,800 level at 17:00 UTC on December 16th.

A very different scenario has unfolded for altcoins, which are under pressure from ongoing regulation and fears that major exchanges and miners could become insolvent. This explains why the total market cap has fallen 4.7% since December 9th.

According to court documents filed Dec. 15, a US trustee announced the committee in charge of part of FTX’s bankruptcy proceedings. These include Wintermute Asia, one of the major market makers, and GGC International, a subsidiary of distressed loan platform Genesis. Investors still don’t know who the main creditors of bankrupt exchange group FTX are, fueling speculation that the contagion could spread further.

On December 15, the Central Bank of the Netherlands issued a warning to investors using KuCoin, saying the exchange was operating without legal registration. De Nederlandsche Bank added that the crypto firm offered “illegal services” and “illegally held wallets” to users.

Adding to the drama, Mazars Group, a company known for providing back-up audit services for crypto firms, reportedly removed recent documents detailing stock audits from its website on Dec. 16. The company had previously been named the official auditor for Binance’s Proof of Reserve updates, a move KuCoin and followed.

The bitcoin mining sector also suffered from the sharp correction in cryptocurrency prices and rising energy costs. Public mining company Core Scientific has been offered a $72 million emergency credit line to stave off bankruptcy. Lender calls for suspension of all payments to Core Scientific lenders while bitcoin stays below $18,500.

The 4.7% weekly decline in the total market cap was mainly influenced by Ether

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5.4% negative price action and BNB

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, which was trading down 15.1%. Consequently, bearish sentiment had a significant impact on altcoins, with 14 of the top 80 coins falling 12% or more over the period.

Weekly winners and losers among the top 80 coins. Source: nomics
The Open Network (TON) gained 30% after Telegram launched an auction for anonymous phone numbers sold for TON tokens.

Bitcoin SV (BSV) surged 11.7% after Craig Wright, self-proclaimed Satoshi Nakamoto and leader of the altcoin project, appealed his loss in Norwegian courts.

Trust Wallet (TWT) saw a 27.2% correction after its parent company (Binance) faced $1.9 billion in withdrawals in 24 hours.

Leverage demand is balanced between bulls and bears
Currently, the data shows that the demand for leverage is split between bulls and bears.

Perpetual contracts, also known as reverse swaps, have an embedded interest rate that is typically calculated every eight hours. Exchanges use these fees to avoid currency risk imbalances.

A positive funding rate indicates that longs (buyers) need more leverage. However, the opposite situation occurs when the shorts (shorts) require additional leverage, making the funding rate negative.

Perpetual futures accumulated the 7-day funding rate on December 16th. Source: Coinglass
The 7-day funding rate was near zero for bitcoin and altcoins, meaning the data points to balanced demand

Source: CoinTelegraph