Total crypto market cap drops to $850B as data suggests further downside

The full cryptocurrency marketplace capitalization dropped by 24% betwixt Nov. 8 and Nov. 10, reaching a $770 cardinal low. However, aft the archetypal panic was subdued and forced aboriginal contracts liquidations were nary longer pressuring plus prices, a crisp 16% betterment followed.

Total crypto marketplace headdress successful USD, 2-days. Source: TradingView

This week’s dip was not the market's archetypal rodeo beneath the $850 cardinal marketplace capitalization level, and a akin signifier emerged successful June and July. In some cases, the enactment displayed strength, but the $770 cardinal intraday bottommost connected Nov. 9 was the lowest since December 2020.

The 17.6% play driblet successful full marketplace capitalization was mostly impacted by Bitcoin's (BTC) 18.3% nonaccomplishment and Ether's (ETH) 22.6% antagonistic terms move. Still, the terms interaction was much terrible connected altcoins, with 8 of the apical 80 coins losing 30% oregon much successful the period.

Weekly winners and losers among the apical 80 coins. Source: Nomics

FTX Token (FTT) and Solana (SOL) were severely impacted by liquidations pursuing the insolvency of FTX speech and Alameda Research.

Aptos (APT) dropped 33% contempt denying rumors that Aptos Labs oregon Aptos Foundation treasuries were held by FTX.

Stablecoin request remained neutral successful Asia

The USD Coin (USDC) premium is simply a bully gauge of China-based crypto retail trader demand. It measures the quality betwixt China-based peer-to-peer trades and the United States dollar.

Excessive buying request tends to unit the indicator supra just worth astatine 100% and during bearish markets, the stablecoin's marketplace connection is flooded, causing a 4% oregon higher discount.

USDC peer-to-peer vs. USD/CNY. Source: OKX

Currently, the USDC premium stands astatine 100.8%, level versus the erstwhile week. Therefore, contempt the 24% driblet successful full cryptocurrency marketplace capitalization, nary panic selling came from Asian retail investors.

However, this information should not beryllium considered bullish, arsenic the USDC buying unit indicates traders question structure successful stablecoins.

Few leverage buyers are utilizing futures markets

Perpetual contracts, besides known arsenic inverse swaps, person an embedded complaint usually charged each 8 hours. Exchanges usage this interest to debar speech hazard imbalances.

A affirmative backing complaint indicates that longs (buyers) request much leverage. However, the other concern occurs erstwhile shorts (sellers) necessitate further leverage, causing the backing complaint to crook negative.

Perpetual futures 7-day backing complaint connected Nov. 11. Source: Coinglass

As depicted above, the 7-day backing complaint is somewhat antagonistic for the 2 largest cryptocurrencies and the information points to an excessive request for shorts (sellers). Even though determination is simply a 0.40% play outgo to support unfastened positions, it is not worrisome.

Traders should besides analyse the options markets to recognize whether whales and arbitrage desks person placed higher bets connected bullish oregon bearish strategies.

The options put/call ratio points to worsening sentiment

Traders tin gauge the wide sentiment of the marketplace by measuring whether much enactment is going done telephone (buy) options oregon enactment (sell) options. Generally speaking, telephone options are utilized for bullish strategies, whereas enactment options are for bearish ones.

A 0.70 put-to-call ratio indicates that enactment options unfastened involvement lag the much bullish calls by 30% and is truthful bullish. In contrast, a 1.20 indicator favors enactment options by 20%, which tin beryllium deemed bearish.

BTC options put-to-call ratio. Source: Cryptorank.io

As Bitcoin terms broke beneath $18,500 connected Nov. 8, investors rushed to question downside protection. As a result, the put-to-call ratio subsequently accrued to 0.65. Still, the Bitcoin options marketplace remains much powerfully populated by neutral-to-bearish strategies, arsenic the existent 0.63 level indicates.

Combining the lack of stablecoin request successful Asia and negatively skewed perpetual declaration premiums, it becomes evident that traders are not comfy that the $850 cardinal marketplace capitalization enactment volition clasp successful the adjacent term.

The views and opinions expressed present are solely those of the writer and bash not needfully bespeak the views of Cointelegraph.com. Every concern and trading determination involves risk, you should behaviour your ain probe erstwhile making a decision.