Any dip buyers left? Bulls are largely absent as total crypto market cap falls to $1.65 trillion

The total crypto market cap has been trading in a descending channel for 24 days and the $1.65 trillion support was retested on May 6th. The fall to $1.65 trillion was followed by bitcoin (BTC), which touched $35,550, its lowest price in 70 days.

Total crypto market cap, billion USD. Source: TradingView

In terms of performance, the aggregate market cap of all cryptocurrencies is down 6% over the past seven days, but this modest correction in the overall market does not represent a few mid-cap altcoins that managed to lose 19% or more in the same period framework.

As expected, altcoins suffered the most

In the past seven days, bitcoin price fell 6% and ether (ETH) fell 3.5%. Meanwhile, altcoins experienced what can only be described as a bloodbath. Below are the top gainers and losers among the 80 largest cryptocurrencies by market cap.

Weekly winners and losers among the top 80 coins. Source: nomics

Tron (TRX) surged 26.9% after TRON DAO launched a USDD, a decentralized stablecoin, on May 5. The algorithmic stablecoin is connected to the Ethereum and BNB (BNB) chain via the BTTC cross-chain protocol.

1inch (1INCH) gained 5.6% after the decentralized exchange governance appliance became the Polygon (MATIC) network Leader by completing 6 million swaps on the network.

STEPN (GMT), the native token of the popular move-to-earn lifestyle app, is down 35.7% after recovering 70% between April 18 and April 28. A similar move occurred in Apecoin (APE) after the token pumped to 94% between April 22nd and April 28th.

Tether premium turned negative on May 6th

The OKX Tether (USDT) Premium gauges retail demand in China and measures the difference between China-based peer-to-peer trades and the US Dollar.

Excessive buying demand sets the indicator above the fair value at 100%. On the other hand, Tether’s market supply is flooded during declining markets, resulting in a discount of 4% or more.

Tether (USDT) peer to peer vs USD/CNY. Source: OKX

The OKX Tether premium peaked at 1.7% on April 30, suggesting some retail slack. However, the metric returned to a 0% premium over the next five days.

More recently, in the early hours of May 6, OKX Tether’s premium flipped negative to -1%. Data shows retail sentiment deteriorated as Bitcoin fell below $37,000.

The futures markets show mixed sentiment

Perpetual contracts, also known as inverse swaps, have an embedded rate that is typically calculated every eight hours. Exchanges use this fee to avoid imbalances in exchange rate risk.

A positive funding rate indicates that longs (buyers) are demanding more leverage. However, the opposite situation occurs when short sellers (sellers) need additional leverage, making the funding rate negative.

Cumulative 7-Day Perpetual Futures Funding Rate. Source: coin jar

As shown above, the 7-day cumulative funding rate for bitcoin and ether is slightly positive. The data suggests slightly higher demand from longs (buyers), but nothing to force traders to close their positions. For example, a positive rate of 0.15% per week equals 0.6% per month and is therefore unlikely to cause any harm.

On the other hand, the funding rate for altcoins 7-day perpetual futures was -0.30%. This rate equates to 1.2% per month and indicates higher demand from shorts (sellers).

Signs of weak retail demand, as revealed by OKX Tether data, and the negative funding rate for altcoins are a signal that traders are unwilling to buy at the critical $1.65 trillion crypto market cap. Buyers appear to be waiting for more dips before jumping in, so more price corrections are likely to follow.

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