The total crypto market cap hit a three-month high of $2.23 trillion on April 3, but performance between March 28 and April 4 was a mere 1.9% gain. During that time, Bitcoin (BTC) showed a negative performance of 2.6%, although this was more than offset by gains from altcoins.
Total crypto market cap, billion USD. Source: TradingView
While Ether (ETH) and Binance Coin (BNB) are up less than 3% over the past seven days, a handful of mid-cap altcoins managed to rally 20% or more.
On April 1, Bitcoin network difficulty hit an all-time high of 28.587 trillion. The indicator correlates to the computing power required to mine blocks of BTC, currently at an estimated hash rate of 201.8 exahash per second (EH/s).
However, on the same day, the United States Securities and Exchange Commission formally denied the application for the ARK 21Shares Bitcoin Exchange Traded Fund (ETF). The regulator argued that the Cboe BZX Exchange failed to meet the requirements for listing a financial product under its rules of procedure and those of the Exchange Act.
Comparing the winners and losers provides skewed results as the top 3 coins had a slightly negative impact.
Weekly winners and losers among the top 80 coins. Source: nomics
Zilliqa (ZIL) gained 56% after reporting it will launch a Metaverse-as-a-Service platform in April. According to a press release, Metapolis will be built by Zilliqa using 3D real-time Nvidia Omniverse. Nvidia is a $684 billion Nasdaq-listed graphics processing unit (GPU) manufacturer.
Aave (AAVE) gained 38% following the release of Aave v3 announced on March 16th. The new features aimed to provide greater capital efficiency, increased security and cross-chain functionality. The non-custody liquidity protocol allows users to lend, borrow or stake their assets to earn income from their holdings.
Synthetix (SNX) gained 28% after its debt pool synthesis launch was scheduled for April 7th. Currently, the decentralized finance protocol operates debt pools across two Ethereum chains: the mainnet and Layer 2 scaling solution Optimism. By moving to an “Optimism-native protocol”, the application will merge its pools to maximize liquidity.
Apecoin (APE) faced a natural correction after gaining 60% between March 21 and March 28 as the firm behind it raised $450 million in a funding round led by Andreessen Horowitz. Yuga Labs, the creators of Bored Ape Yacht Club (BAYC), launched APE as a governance and utility token that allows its holders to monitor and manage what is known as the ApeCoin DAO.
The Tether Premium shows slight discomfort
OKX Tether (USDT) premium is a good gauge of crypto demand from China-based retailers. It measures the difference between China-based peer-to-peer trades and the US dollar.
Excessive buying demand tends to push the indicator 100% above fair value, and during bearish markets, Tether’s market supply is flooded, causing a discount of 4% or more.
Tether (USDT) peer to peer vs USD/CNY. Source: OKX
Tether hit 99.2% on April 2, its lowest level since January 26. While this is far from retail panic selling, the indicator has shown a slight deterioration over the past week.
The lack of retail demand isn’t particularly worrying, even though the cryptocurrency’s total market cap has surpassed $2 trillion and the indicator is down 19% since December 2021.
The futures markets show mixed sentiment
Open-ended contracts currently reflect a mixed mood. As shown below, the 7-day cumulative funding rate for Bitcoin, Ether, Solana, and XRP is slightly positive. This data points to higher demand from longs (buyers), but is far from overblown. For example, Solana’s positive weekly rate of 0.20% equates to 0.8% per month, which shouldn’t pose a problem for most futures traders.
Cumulative perpetual futures funding rate on April 4th. Source: Coinglass
On the other hand, Terra (LUNA) showed slightly more demand from shorts (sellers) and the lack of Tether demand in Asia signals a lack of confidence from traders.
Total market cap increased 26% in three weeks from $1.67 trillion to $2.1 trillion on April 4th. However, derivatives indicators show no sign of improvement, leaving investor confidence lacking. Unless sentiment improves, the chances of a negative price correction remain high.
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