Total crypto market cap rises above $1T, and data suggests more upside is in store

Despite the caller antagonistic crypto and macroeconomic newsflow, the full cryptocurrency marketplace capitalization broke supra $1 trillion connected Jan. 21. An encouraging motion is that derivatives metrics are not showing accrued request from bearish traders astatine the moment. 

Total crypto marketplace headdress successful USD, 1-day. Source: TradingView

Bitcoin (BTC) terms gained 8% connected the week, stabilizing adjacent the $23,100 level astatine 18:00 UTC connected Jan. 27 arsenic the markets weighed the imaginable interaction of Genesis Capital's bankruptcy connected Jan. 19.

One country of interest is Genesis Capital's largest debtor is Digital Currency Group (DCG), which happens to beryllium its genitor company. Consequently, Grayscale funds absorption could beryllium astatine risk, truthful investors are unsure if the Grayscale Bitcoin Trust (GBTC) assets could look liquidation. The concern conveyance presently holds implicit $14 cardinal worthy of Bitcoin positions for its holders.

A United States appeals tribunal is acceptable to perceive the arguments relating to Grayscale Investment's lawsuit against the Securities and Exchange Commission (SEC) connected March 8. The money manager questioned the SEC's determination to contradict their asset-backed exchange-traded money (ETF) launch.

Regulatory concerns besides negatively impacted the markets aft South Korean prosecutors requested an arrest warrant for Bithumb speech owner Kang Jong-Hyun. On Jan. 25, the Financial Investigation 2nd Division of the Seoul Southern District Prosecutor's Office sentenced Kang and 2 Bithumb executives connected charges of conducting fraudulent amerciable transactions.

The 7% play summation successful full marketplace capitalization was held backmost by Ether's (ETH) 0.3% antagonistic terms move. Still, the bullish sentiment importantly impacted altcoins, with 11 of the apical 80 coins gaining 18% oregon much successful the period.

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

Aptos (APT) gained 91% aft the astute declaration web full worth locked (TVL) reached a record-high $58 million, fueled by PancakeSwap DEX.

Fantom (FTM) rallied 50% aft the announcement of its caller database system, Carmen, and a new Fantom Virtual Machine, Tosca.

Optimism (OP) faced 21% gains aft a crisp summation successful transaction volumes during an NFT inducement programme called Optimism Quest.

Leverage request somewhat favors bulls

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 accumulated 7-day backing complaint connected Jan. 27. Source: Coinglass

The 7-day backing complaint was affirmative for Bitcoin and Ethereum, meaning the information points to somewhat higher request for leverage longs (buyers) versus shorts (sellers). Still, a 0.25% play backing outgo is not capable to discourage leverage buyers.

Interestingly, Aptos was the lone objection arsenic the altcoin presented a antagonistic 0.6% play backing outgo — meaning abbreviated sellers were paying to support their positions open. This question tin beryllium explained by the 91% rally successful 7 days and it suggests that sellers expect immoderate benignant of method correction.

The options put/call ratio shows nary signs of fear

Traders tin gauge the market's wide sentiment 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 1.40 indicator favors enactment options by 40%, which tin beryllium deemed bearish.

BTC options measurement put-to-call ratio. Source: laevitas.ch

Even though Bitcoin's terms failed to interruption the $23,300 resistance, the request for bullish telephone options has exceeded the neutral-to-bear puts since Jan. 6.

Presently, the put-to-call measurement ratio stands adjacent 0.50 arsenic the options marketplace is much powerfully populated by neutral-to-bullish strategies, favoring telephone (buy) options by 50%.

Related: Bitcoin volition deed $200K earlier $70K ‘bear market’ adjacent rhythm — Forecast

Derivatives markets constituent to further upside potential

After the 3rd consecutive week of gains, which totals 40% year-to-date erstwhile excluding stablecoins, determination are nary signs of request from abbreviated sellers. More importantly, leverage indicators amusement bulls are not utilizing excessive leverage.

Derivatives markets constituent to further upside imaginable and adjacent if the marketplace revisits the $950 cardinal marketplace capitalization from Jan. 18, determination is nary crushed for panic. Currently, Bitcoin enactment markets amusement whales and marketplace makers favoring the neutral-to-bullish strategies.

Ultimately, the likelihood favour those betting that the $1 trillion full marketplace headdress volition hold, opening country for further gains.

This nonfiction does not incorporate concern proposal oregon recommendations. Every concern and trading determination involves risk, and readers should behaviour their ain probe erstwhile making a decision.

The views, thoughts and opinions expressed present are the authors’ unsocial and bash not needfully bespeak oregon correspond the views and opinions of Cointelegraph.