The cryptocurrency market has been experiencing a bearish trend lately as the total market capitalization fell to $1.02 trillion on June 15, its lowest level in three months. This is due to regulatory uncertainty and lack of transparency on stablecoins, with cryptocurrencies such as Bitcoin, XRP, and Ether experiencing losses while others like BNB saw small gains. The regulatory environment is also worsening globally, with exchanges such as Bakkt delisting certain cryptocurrencies due to recent regulatory developments in the United States, and Binance facing legal and regulatory challenges in France and the Netherlands.
Despite this, two derivatives metrics show balanced demand for BTC and ETH leverage, indicating that bulls are not yet giving up. Perpetual futures contracts have a neutral seven-day funding rate for BTC and ETH, indicating balanced demand from leveraged longs (buyers) and shorts (sellers). However, BNB was the only exception, with traders paying up to 1% per week for short bets due to added risks after regulatory scrutiny over the Binance exchange.
The Tether premium is also a good gauge of China-based crypto retail trader demand, and it measures the difference between China-based peer-to-peer trades and the United States dollar. The Tether premium in Asian markets fell to 99.2% after being flat since June 6, indicating moderate discomfort. Reports on June 16 regarding Tether reserves’ exposure to Chinese debt markets could have been the cause.
Despite the most recent bounce from the support level, any gains above $1.12 trillion in capitalization (up 10% from the $1.02 trillion low) will likely be short-lived over the next few months. Consequently, bears are yet to prove their strength if they intend to push crypto below the $1 trillion mark. Bulls are hoping for a Bitcoin ETF approval or a Federal Reserve rate cut to trigger a potential bull market, with the Bitcoin halving still over 300 days away.
Source: Cryptopanic
