Bitcoin Price Rise to $25,000 Followed by Total Crypto Market Cap Test of $1.13T Resistance
The total crypto market capitalization declined to $1.13 trillion on February 16, but there was no change in the month-long ascending channel structure. More importantly, this level represents a 43% gain in 2023, which is a far cry from the $3 trillion level reached in November 2021. Still, the current uptick is remarkable.
As shown above, the rising channel started in mid-January has allowed for a 10% correction down to $1 trillion without breaking the bullish formation.
Investors reacted positively to a 5.6% year-on-year US CPI inflation increase on February 14 and a 3% monthly growth in retail sales on February 15. Bitcoin (BTC) had the biggest positive impact on the total crypto capitalization as the price. increased 12.5% in the week.
One area of concern is a February 16 story about Binance.US financial transactions to Merit Peak, a trading firm managed by CEO Changpeng Zhao. Interestingly, Reuters reported that a spokesperson for Binance.US said that Merit Peak “neither traded nor provided any kind of services on the Binance.US platform.”
The 10.1% weekly increase in total market capitalization was held back by the modest 1.8% gains of BNB and XRP’s 2.5% price increase. On the other hand, only 3 of the top 80 cryptocurrencies ended the week with negative results.
Decentralized storage solutions Filecoin (FIL) surged 59% and Internet Computer (ICP) surged 52% as Bitcoin blockchain demand for NFT inscription significantly increased block space.
GMX surged 34% as the protocol received $5 million in transaction fees in a single day.
Lido DAO (LDO) gained 34% when stakeholders evaluated proposals to manage the 20,300 ETH held by the company’s treasury.
Load demand is balanced despite the general upswing
Perpetual contracts, also known as inverse swaps, have a built-in rate that is usually charged every eight hours. Exchanges use this fee to avoid imbalances in currency risk.
A positive funding rate indicates that longs (buyers) require more leverage. However, the opposite situation occurs when shorts (sellers) require additional leverage, causing the funding rate to become negative.
The 7-day funding rate was close to zero for Bitcoin and Ethereum, meaning the data points to a balanced demand between leverage longs (buyers) and shorts (sellers).
Interestingly, BNB is no longer a top-6 cryptocurrency ranked by futures open interest as investor demand for Polygon (MATIC) markets surged 70% in February.
The put/call ratio options remain bullish
Traders can gauge the overall sentiment of the market by gauging whether more activity is going through call (buy) options or put (sell) options. Generally speaking, call options are used for bullish strategies, while put options are for bearish strategies.
A put-to-call ratio of 0.70 indicates that put open interest lags the more bullish calls by 30% and is therefore bullish. In contrast, a 1.40 indicator favors put options by 40%, which can be considered bearish.
Related: Bitcoin price derivatives look a little overheated, but data suggests the bears are outnumbered
Although Bitcoin’s price failed to break the $25,000 resistance, bullish call demand has exceeded neutral-to-bearish selling since February 14.
Currently, the put-to-call volume ratio is approaching 0.40 as the options market is more heavily populated by neutral-to-bullish strategies, favoring call (call) options by 2x.
From a derivatives market perspective, there is no sign of demand from short sellers, while leverage indicators show that bulls are not using excessive leverage. Ultimately, the odds favor those betting that the total market cap resistance of $1.13 trillion will break, opening up room for further gains.
This article does not contain investment advice or recommendations. All investment and trading moves involve risk and readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
