{"id":509064,"date":"2022-11-11T23:29:31","date_gmt":"2022-11-11T20:29:31","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/total-crypto-market-cap-drops-to-850b-as-data-suggests-further-downside\/"},"modified":"2022-11-11T23:29:31","modified_gmt":"2022-11-11T20:29:31","slug":"total-crypto-market-cap-drops-to-850b-as-data-suggests-further-downside","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/total-crypto-market-cap-drops-to-850b-as-data-suggests-further-downside\/","title":{"rendered":"# Total crypto market cap drops to $850B as data suggests further downside"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a26ec427d811\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a26ec427d811\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/total-crypto-market-cap-drops-to-850b-as-data-suggests-further-downside\/#%E2%80%9D_Total_crypto_market_cap_drops_to_850B_as_data_suggests_further_downside_%E2%80%9C\" >&#8221; Total crypto market cap drops to $850B as data suggests further downside &#8220;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/total-crypto-market-cap-drops-to-850b-as-data-suggests-further-downside\/#Stablecoin_demand_remained_neutral_in_Asia\" >Stablecoin demand remained neutral in Asia<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/total-crypto-market-cap-drops-to-850b-as-data-suggests-further-downside\/#Few_leverage_buyers_are_using_futures_markets\" >Few leverage buyers are using futures markets<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/total-crypto-market-cap-drops-to-850b-as-data-suggests-further-downside\/#The_options_putcall_ratio_points_to_worsening_sentiment\" >The options put\/call ratio points to worsening sentiment<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Total_crypto_market_cap_drops_to_850B_as_data_suggests_further_downside_%E2%80%9C\"><\/span>&#8221; Total crypto market cap drops to $850B as data suggests further downside &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-e13e51fa>The total cryptocurrency market capitalization dropped by 24% between Nov. 8 and Nov. 10, reaching a $770 billion low. However, after the initial panic was subdued and forced future contracts liquidations were no longer pressuring asset prices, a sharp 16% recovery followed.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-11\/ab427f00-370e-4aba-b503-633cae2995ad.png\"><figcaption style=\"text-align: center;\"><em>Total crypto market cap in USD, <\/em>2-days<em>. Source: TradingView<\/em><\/figcaption><\/figure>\n<p>This week\u2019s dip was not the market&#8217;s first rodeo below the $850 billion market capitalization level, and a similar pattern emerged in June and July. In both cases, the support displayed strength, but the $770 billion intraday bottom on Nov. 9 was the lowest since December 2020.<\/p>\n<p>The 17.6% weekly drop in total market capitalization was mostly impacted by Bitcoin&#8217;s (BTC) 18.3% loss and Ether&#8217;s (ETH) 22.6% negative price move. Still, the price impact was more severe on altcoins, with 8 of the top 80 coins losing 30% or more in the period.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-11\/1c175876-edc2-45c6-96ac-ed5a8e673eaf.png\"><figcaption style=\"text-align: center;\"><em>Weekly winners and losers among the top 80 coins. Source: Nomics<\/em><\/figcaption><\/figure>\n<p>FTX Token (FTT) and Solana (SOL) were severely impacted by liquidations following the insolvency of FTX exchange and Alameda Research.<\/p>\n<p>Aptos (APT) dropped 33% despite <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/Aptos_Network\/status\/1590486118608568320\">denying rumors<\/a> that Aptos Labs or Aptos Foundation treasuries were held by FTX.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Stablecoin_demand_remained_neutral_in_Asia\"><\/span>Stablecoin demand remained neutral in Asia<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The USD Coin (USDC) premium is a good gauge of China-based crypto retail trader demand. It measures the difference between China-based peer-to-peer trades and the United States dollar.<\/p>\n<p>Excessive buying demand tends to pressure the indicator above fair value at 100% and during bearish markets, the stablecoin&#8217;s market offer is flooded, causing a 4% or higher discount.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-11\/fba0bc6a-a352-4682-9343-a59cf56b2aab.png\"><figcaption style=\"text-align: center;\"><em>USDC peer-to-peer vs. USD\/CNY. Source: OKX<\/em><\/figcaption><\/figure>\n<p>Currently, the USDC premium stands at 100.8%, flat versus the previous week. Therefore, despite the 24% drop in total cryptocurrency market capitalization, no panic selling came from Asian retail investors. <\/p>\n<p>However, this data should not be considered bullish, as the USDC buying pressure indicates traders seek shelter in stablecoins.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Few_leverage_buyers_are_using_futures_markets\"><\/span>Few leverage buyers are using futures markets<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Perpetual contracts, also known as inverse swaps, have an embedded rate usually charged every eight hours. Exchanges use this fee to avoid exchange risk imbalances.<\/p>\n<p>A positive funding rate indicates that longs (buyers) demand more leverage. However, the opposite situation occurs when shorts (sellers) require additional leverage, causing the funding rate to turn negative.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-11\/52a65b33-a9a5-4d80-ac0f-6da18cbc1b7d.png\"><figcaption style=\"text-align: center;\"><em>Perpetual futures 7-day funding rate on Nov. 11. Source: Coinglass<\/em><\/figcaption><\/figure>\n<p>As depicted above, the 7-day funding rate is slightly negative for the two largest cryptocurrencies and the data points to an excessive demand for shorts (sellers). Even though there is a 0.40% weekly cost to maintain open positions, it is not worrisome.<\/p>\n<p>Traders should also analyze the options markets to understand whether whales and arbitrage desks have placed higher bets on bullish or bearish strategies.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_options_putcall_ratio_points_to_worsening_sentiment\"><\/span>The options put\/call ratio points to worsening sentiment<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Traders can gauge the overall sentiment of the market by measuring whether more activity is going through call (buy) options or put (sell) options. <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">General<\/a>ly speaking, call options are used for bullish strategies, whereas put options are for bearish ones.<\/p>\n<p>A 0.70 put-to-call ratio indicates that put options open interest lag the more bullish calls by 30% and is therefore bullish. In contrast, a 1.20 indicator favors put options by 20%, which can be deemed bearish. <\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-11\/471a8f79-1cb7-4b7c-b422-544a51b7d986.png\"><figcaption style=\"text-align: center;\"><em>BTC options put-to-call ratio. Source: Cryptorank.io<\/em><\/figcaption><\/figure>\n<p>As Bitcoin price broke below $18,500 on Nov. 8, investors rushed to seek downside protection. As a result, the put-to-call ratio subsequently increased to 0.65. Still, the Bitcoin options market remains more strongly populated by neutral-to-bearish strategies, as the current 0.63 level indicates.<\/p>\n<p>Combining the absence of stablecoin demand in Asia and negatively skewed perpetual contract premiums, it becomes evident that traders are not comfortable that the $850 billion market capitalization support will hold in the near term.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/p>\n<p class=\"post-content__disclaimer\">The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. 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However, after the initial panic was subdued and forced future contracts liquidations were no longer pressuring asset prices, a sharp 16% recovery&#8230;<\/p>\n","protected":false},"author":1,"featured_media":509065,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMTEvZTU4OTQ0OTEtYzFkMy00N2IxLWEzYTgtNmVhYjFiYzAyYTVjLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74867,74862,81209,74937,74863,74860,75012,135234,75846,74939,82350,73785],"class_list":["post-509064","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-altcoin","tag-bitcoin","tag-bitcoin-options","tag-bitcoin-price","tag-cryptocurrencies","tag-cryptocurrency-exchange","tag-derivatives","tag-ftx","tag-futures","tag-market-analysis","tag-usd-coin","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/509064","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=509064"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/509064\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/509065"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=509064"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=509064"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=509064"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}