The total market value of crypto falls below $ 1.2T, but data show that traders are less likely to sell

The total crypto market value has traded in a declining channel over the last 29 days and currently shows support of $ 1.17 trillion. Over the last seven days, Bitcoin (BTC) has presented a modest fall of 2% and Ether (ETH) met a correction of 5%.

The June 10 Consumer Price Index (CPI) report showed an 8.6% year-on-year increase and the crypto and stock markets immediately felt the effect. However, it is not certain whether the figure will convince the US Federal Reserve to hesitate in future interest rate increases.

Mid-cap altcoins fell further, sentiment remains bearish

The generalized bearish sentiment caused by weak macroeconomic data and uncertainty regarding the Federal Reserve’s ability to curb inflation has severely affected the crypto markets.

The Fear and Greed Index reached 11/100 on June 9, and the data-driven sentiment gauge has been below 20 since May 8.

This persistent “extreme fear” reading indicates that investors are worried, but at the same time it reportedly presents a buying opportunity.

Below are the winners and losers from the last seven days. While the two leading cryptocurrencies yielded modest losses, a handful of medium-sized altcoins fell by 14% or more.

The Helium (HNT) community approved the HIP-51 proposal, which covers the financial and technical constructions required to support new users, devices and various types of networks, including mobile networks, VPNs and WiFi.

Chainlink (LINK) increased by 22% after developers released a renewed Chainlink 2.0 roadmap, including native token staking.

Theta Token (THETA) received 9.7% when the network announced livestream support using API technology that enabled instant and easy connection to apps and websites.

WAVES lost 28% after the $ 1,000 daily withdrawal limit for viral finance stablecoins was implemented to avoid further pressure on Neutrino Protocol Stablecoin (USDN).

Data show that traders are less likely to sell at current levels

The OKX Tether (USDT) premium is a good measure of China-based crypto traders’ demand. It measures the difference between China-based peer-to-peer (P2P) trading and the US dollar.

Excessive buying demand tends to push the indicator above fair value of 100%, and during bearish markets, Tether’s market supply is flooded, causing a discount of 4% or higher.

On 31 May, the Tether price in Asian peer-to-peer markets entered a 4% discount, signaling intense retail pressure. Oddly enough, the situation improved on June 10 after the indicator moved to a 1.5% discount. Despite remaining negative, the calculation shows investors’ willingness to buy dip as the total crypto-capitalization fell below $ 1.2 trillion.

To exclude externalities specific to the Tether instrument, traders must also analyze the cryptocurrency markets. Perpetual contracts, also known as inverse swaps, have a built-in rate that is usually charged every eight hours. Stock exchanges use this fee to avoid imbalances in currency risk.

A positive financing rate indicates that longs (buyers) require more influence. However, the opposite situation arises when shorts (sellers) require extra influence, which causes the financing rate to be negative.

Perpetual contracts reflected mixed sentiment after Bitcoin and Ether maintained a slightly positive (bullish) financing rate, but altcoin interest rates were negative. For example, BNB’s negative 0.20% weekly interest rate corresponds to 0.8% per month, which is generally not a concern for derivatives traders.

Any recovery depends on the stabilization of macroeconomic data

According to derivatives and trading indicators, investors are less likely to reduce their positions at the current level, as shown by the modest improvement in the Tether premium.

The positive financing rate for Bitcoin and Ether futures shows traders’ growing appetite for mortgaged long positions as the total cryptocurrency capitalized below $ 1.2 trillion.

Unless the traditional markets and the macroeconomic scenario worsen, there is reason to believe that crypto investors expect a positive price movement soon.

The views and opinions expressed here are solely those of author and does not necessarily reflect the views of the Cointelegraph. Every investment and trade involves risk. You should do your own research when making a decision.