2 metrics signal that the $1.1 trillion market cap resistance will hold

Despite a handful of altcoins gaining 12 % or more in the past week, Tether's premium in Asia and activity in futures markets show that buyers still lack confidence. Cryptocurrencies have failed to break the resistance on the $1.1 trillion market cap chart that has been holding for the past 54 days. 

The market capitalization is holding below the $1.1 trillion resistance

The aggregate capitalization of crypto markets between July 29 and August 5 fell by 1 % to $1.07 trillion. The market was negative affected reports on August 4 that the US Securities and Exchange Commission (SEC) is investigating every crypto exchange in the US after the regulator accused former Coinbase employees from insider trading.

While the two leading cryptoassets were unable to post weekly gains, traders' appetite for altcoins was not affected. Investors were positively influenced by Coinbase's partnership with BlackRock and other news.

Coinbase Prime, a service offered to BlackRock clients, is an institutional trading solution that provides trading, custody, funding and staking on more than 300 digital assets.

FLOW rose by 48 % after Instagram announced Flow blockchain support via Dapper Wallet. The social network expands the integration of non-fungible tokens.

Filecoin (FIL) gained 38 % after of the August 2 v16 Skyr upgrade, which secured the protocol to avoid the vulnerability.

VeChain (VET) gained 16.5 % after some news sources incorrectly reported a partnership with Amazon Web Services (AWS).

Tether premium has slightly worsened

The premium for Tether (USDT) on OKX is a good measure of demand from small cryptocurrency traders in China. It measures the difference between peer-to-peer trades in China and the US dollar.

Excessive buying demand tends to push the indicator above fair value at and during bear markets the market supply of Tether is flooded causing a discount of 4 % or higher.

Currently, USDT is premium at 98.4 %, the lowest level since June 10th. While the indicator is far from a panic sell-off, it has shown a slight deterioration over the past week.

Futures markets show mixed sentiment

Perpetual contracts contain a rate usually charged every eight hours – the funding rate. Exchanges use this fee to avoid exchange rate imbalances.

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

The cumulative seven-day funding rate is either slightly positive or neutral for the largest cryptocurrencies by open interest. These figures indicate balanced demand between long leverage (buyers) and short positions (sellers).

All factors considered, traders still lack confidence.

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All content in this article is for informational purposes only and does not in any way serve as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.