Bitcoin price rally to $25,000 followed by a retest of the crypto’s total market cap of $1.13T resistance

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The total crypto market cap was dismissed at $1.13 trillion on Feb. 16, but there was no change in the one-month ascending channel structure. More importantly, this level represents a 43% gain in 2023, which is a far cry from the $3 trillion level reached in November 2021. Still, the current recovery is notable.

Total crypto market capitalization in US dollars, 1 day. Source: Trading View

As noted above, the ascending channel initiated in mid-January provided room for a 10% correction to $1 trillion without breaking the bullish formation.

Investors reacted positively to the 5.6% year-over-year inflation increase in the US consumer price index on February 14 and the 3% monthly growth in retail sales on February 15. its price gained 12.5% ​​on the week.

One area of ​​concern is a Feb. 16 post about Binance.US’ financial dealings with Merit Peak, a trading firm managed by CEO Changpeng Zhao. Interestingly, Reuters reported that a Binance.US spokesperson said Merit Peak “does not trade or provide any type of service on the Binance.US platform.”

The 10.1% weekly increase in total market capitalization was dampened by the modest 1.8% gains in BNB (BNB) and the 2.5% rise in XRP (XRP) prices. In contrast, only three of the top 80 cryptocurrencies ended the week with negative performance.

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

Decentralized storage solution Filecoin (FIL) gained 59% and Internet Computer (ICP) soared 52% as Bitcoin blockchain demand for listing non-fungible tokens (NFTs) dramatically increased block space .

GMX rose 34% as the protocol received $5 million in transaction fees in a single day.

Lido DAO’s LDO gained 34% as stakeholders evaluated proposals for managing the 20,300 Ether (ETH) held by the company’s treasury.

Leverage demand balanced despite broad rally

Perpetual contracts, also known as reverse swaps, have an embedded rate that is typically charged every eight hours. Exchanges use these fees to avoid currency risk imbalances.

A positive funding rate indicates that longs (buyers) require more leverage. However, the opposite situation occurs when the shorts (shorts) require additional leverage, causing the funding rate to become negative.

Perpetual futures accumulated the 7-day funding rate on February 17. Source: Coinglass

The seven-day funding rate was near zero for Bitcoin and Ether, meaning the data points to balanced demand between longs (buyers) and shorts (sellers).

Interestingly, BNB is no longer one of the top six cryptocurrencies ranked by futures open interest, as investor demand for Polygon’s MATIC (MATIC) markets increased by 70% in February.

The put/call options ratio remains optimistic

Traders can gauge overall market sentiment by measuring whether more activity is going through call options (buy) or put options (sell). Generally speaking, call options are used for bullish strategies, while put options are used for bearish strategies.

A put-call ratio of 0.70 indicates that the open interest of put options lags the most bullish calls by 30% and is therefore bullish. On the other hand, an indicator at 1.40 favors put options by 40%, which can be considered bearish.

Related: Bitcoin Price Derivatives Seem A Bit Overheated, But Data Suggests There Are More Bears

Put-call ratio of BTC options volume. Source: Laevitas

Even though Bitcoin price failed to break through the $25,000 resistance, demand for bullish calls has outpaced neutral to bearish puts since Feb. 14.

Currently, the put-to-call volume ratio is approaching 0.40 as the options market is more heavily populated with neutral to bullish strategies, favoring 2x call options.

From a derivatives market perspective, there are no signs of demand from short sellers, while leverage indicators show that bulls are not using excessive leverage. Ultimately, the odds are in favor of those betting that the $1.13 trillion total market cap resistance will break, paving the way for further gains.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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