The total cryptocurrency market cap has risen above $1 trillion, and the data suggests there is more upside in store

Despite the recent negative outpourings of cryptocurrency and macroeconomic news, the total market cap of cryptocurrencies crossed $1 trillion on January 21st. An encouraging sign is that derivatives metrics are not showing increased demand from bearish traders at the moment.

Total market capitalization of cryptocurrencies in USD, for one day. Source: TradingView

bitcoin (BTCThe price is up 8% over the course of the week, and settled near the $23,100 level at 18:00 UTC Jan 27 as markets were weighing in on the potential impact of Genesis Capital bankruptcy it is january. 19.

One area of ​​concern is Genesis Capital’s largest debtor is Digital Currency Group (DCG), which also happens to be the parent company. Thus, the management of Grayscale Funds may be at risk, so investors are not sure whether the Grayscale Bitcoin Trust (GBTC) assets could be subject to liquidation. The investment vehicle currently holds over $14 billion in Bitcoin positions to its owners.

A United States Court of Appeals has been appointed to hear arguments for Grayscale Investment Case before the Securities and Exchange Commission (SEC) on March 8. The fund manager questioned the SEC’s decision to refuse to launch its asset-backed exchange-traded fund (ETF).

Regulatory concerns also negatively affected the markets after the South Korean plaintiffs requested Arrest warrant on owner of Bithumb Exchange Kang Jung Hyun. On January 25, Kang and two Bithumb executives were sentenced by the Second Financial Investigation Department of the Seoul South District Prosecutor’s Office for conducting illegal fraudulent transactions.

The weekly increase of 7% in the total market capitalization was delayed by Ether (ETH) 0.3% negative price move. However, bullish sentiment has weighed heavily on altcoins, with 11 of the top 80 altcoins gaining 18% or more in the period.

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

suitable (suitable) increased by 91% after the total value of the locked smart contract (TVL) network reached a record high of $58 million, backed by PancakeSwap DEX.

a ghost (FTM) increased by 50% after the announcement of the new database system, Carmen, and A New Fantom virtual machineTosca.

Optimism (OP) experienced a 21% gain after a sharp increase in transaction volumes during an NFT incentive program called Optimism Quest.

Leverage favors bulls a bit

Perpetual contracts, also known as reverse swaps, have a built-in rate that is usually charged every eight hours. Exchanges use these fees to avoid imbalances in exchange risk.

A positive funding ratio indicates that long contracts (buyers) require more leverage. However, the opposite situation occurs when short positions (sellers) require additional leverage, causing the financing rate to turn negative.

Perpetual futures contracts accumulated at a 7-day funding rate on January 27. Source: Coinglass

The 7-day funding rate was positive for Bitcoin and Ethereum, which means that the data indicates a slight increase in demand for long positions (buyers) versus short positions (sellers). However, a weekly financing cost of 0.25% isn’t enough to discourage buyers.

Interestingly, Aptos was the only exception as the altcoin offered a negative 0.6% weekly funding cost – meaning that short sellers were paying to keep their positions open. This move can be explained by up 91% in 7 days and it indicates that the sellers are expecting some kind of technical correction.

The put/call options ratio shows no signs of fear

Traders can gauge overall market sentiment by gauging whether more activity is going through with buying (going long) or selling (selling) options. In general, call options are used for bullish strategies, while call options are used for bearish strategies.

A ratio of 0.70 to long indicates that the open interest of the put options lags the bullish call increase by 30% and is therefore bullish. In contrast, the indicator 1.40 favors put options by 40%, which can be considered bearish.

BTC options volume buy-to-order ratio. Source:

Although bitcoin price failed to break the $23,300 resistance, demand for the bullish call option has outpaced the neutral call option since January 6th.

Currently, the buy-to-buy volume ratio stands near 0.50 as the options market is more aggressively filled with neutral to bullish strategies, and put (call) options are favored by 50%.

Related: Bitcoin Will Reach $200K Before Next Cycle $70K “Bear Market” – Forecast

Derivatives markets point to further upside potential

After a third straight week of gains, which hit 40% year-to-date when excluding stablecoins, there are no signs of demand from short sellers. Most importantly, leverage indicators show that the bulls do not use excessive leverage.

The derivatives market points to more upside potential, and even if the market revisits the $950 billion market cap as of January 18, there is no reason to panic. Currently, the Bitcoin options market shows that whales and market makers prefer neutral to bullish strategies.

Ultimately, the odds favor those who bet that the total market capitalization of $1 trillion will hold steady, opening up room for further gains.