Total crypto market cap hits $850 million as Bitcoin and altcoins recover from FTX’s collapse

The total cryptocurrency market capitalization increased by 2% in the last seven days, reaching $850 billion. Even with the positive movement and rising channel initiated on November 20, the overall sentiment remains bearish and year-to-date losses total 63.5%.

The Bitcoin (BTC) price also rose just 2% on the week, but investors have little to celebrate as the current $16,800 level represents a 64% year-to-date drop.

Bankrupt exchange FTX remained at the center of the news stream after the exchange hacker continued to move parts of the stolen $477 million in stolen assets as an attempt to launder the money. On November 29, analysts alleged that a portion of the stolen funds were transferred to OKX.

The FTX saga has made the politicians shout louder in their calls for regulation. On November 28, European Central Bank (ECB) President Christine Lagarde called crypto regulation and oversight an “absolute necessity.” US House Finance Committee Chair Maxine Waters announced that lawmakers would explore the collapse of FTX in a December 13 inquiry.

On November 28, Kraken, a US-based cryptocurrency exchange, agreed to pay more than $362,000 as part of an agreement “to resolve its potential civil liability” related to sanctions violations against Iran. According to the US Treasury Department’s Office of Foreign Assets Control, Kraken exported services to users who appeared to be in Iran when they engaged in virtual currency transactions.

The 2% weekly increase in total market capitalization was mainly influenced by Ether’s (ETH) positive price movement of 7%. The bullish sentiment also significantly affected altcoins, with 6 of the top 80 coins gaining 10% or more during the period.

Fantom (FTM) gained 29.3% amid reports that the Fantom Foundation generates consistent profits and has a 30-year runway without selling any FTM tokens.

Dogecoin (DOGE) surged 26.8% as investors raised expectations that Elon Musk’s vision for Twitter 2.0 will include some form of DOGE integration.

ApeCoin (APE) gained 15.6% after the community-led DAO made up of ApeCoin holders launched its own marketplace to buy and sell NFTs from the Yuga Labs ecosystem.

Chainlink (LINK) surged 11.1% ahead of the launch of beta staking services on December 6, increasing holders’ opportunities for rewards.

Leverage demand is balanced between bulls and bears

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, Ether and XRP, so the data points to a balanced demand between leverage longs (buyers) and shorts (sellers).

The only exception was BNB, which presented a weekly funding rate of 1.3% for those holding girage shorts. While not burdensome to sellers, it reflects investors’ uneasiness about buying BNB at current price levels.

Traders should also analyze the options markets to understand whether whales and arbitrage tables have bet higher on bullish or bearish strategies.

The options put/call ratio shows moderate bullishness

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 options’ open interest lags the more bullish calls by 30% and is therefore bullish. In contrast, a 1.20 indicator favors put options by 20%, which can be considered bearish.

Although Bitcoin’s price failed to break the $17,000 resistance on November 30, there was no excessive demand for downside protection using options. As a result, the put-to-call ratio remained stable near 0.53. The Bitcoin options market remains more heavily populated by neutral-to-bearish strategies, as the current level favoring call options (calls) indicates.

Despite the weekly price increase of selected altcoins and even a 7.1% increase in Ether price, there has been no sign of sentiment improvement according to derivatives calculations.

There is balanced demand for leverage using futures contracts, and BTC option risk assessment did not improve even though Bitcoin’s price tested the $17,000 level.

Currently, the odds favor those betting that the $870 billion market cap resistance will show strength, but a 5% downside move against the $810 billion support is not enough to invalidate the ascending channel, which could hurt bulls needed the room to eradicate the infection. risk caused by FTX’s insolvency.