Bitcoin’s recent gains have traders calling it a bottom, but various indicators remain bearish

On May 30, the total cryptocurrency market capitalization rose 4% and is now nearing a market cap of $1.3 trillion. The move was enough to wipe out the losses of the first 7 days, mainly driven by Bitcoin (bitcoin) rose 4.9% over the period.

The total market capitalization of cryptocurrencies, in billions of dollars. Source: TradingView

Besides Bitcoin, Cardano (ADA) was the only large-cap cryptocurrency to close with a positive 4.5% gain. At the same time, the ether (Ethereum), BNBripple (Ripple) and Solana (Sol) does not present weekly earnings.

Bitcoin’s turnaround comes after U.S. stocks posted their first gains after seven straight weeks of losses. The S&P 500 posted its longest losing streak in more than 10 years before closing up 6.6% on May 22.

According to Yahoo!Financial, “A batch of favorable quarterly results from major retailers helped at least temporarily ease Concerns about fees [that …] Inflation headwinds could impact margins. For example, Macy’s (M) was up 29.1% for the week, followed by Nordstrom (JWN) up 25.4% and Ross (ROST) up 21.5%.

Curiously, JPMorgan issued a research note to clients on May 25, claiming that $38,000 is the fair value of Bitcoin. The global investment bank also stated that Terra’s (Luna) crash didn’t hurt demand for crypto VCs.

On May 23, during the World Economic Forum (WEF) in Davos, Switzerland, PayPal Vice President Richard Nash said the company intends to Embrace all possible crypto and blockchain services. After launching bitcoin trading in the US in 2020, PayPal continues to expand Its products related to digital currency.

Here are the winners and losers of the past 7 days. While the leading cryptocurrencies were modest, some mid-cap altcoins showed high volatility.

Weekly winners and losers in the top 80 coins.Source: Economics

Synthetix (SNX) jumps 15.8% after zero-slippage derivatives trading app Kwenta power Synthetix’s trading volume reached $325 million.

Helium (HNT) gained 15.2% following the release of details on Improvement Proposal #51 on May 27. introduce A framework that enables subnets to have their own tokens and governance.

STEPN governance (GMT) fell 14.6% Block users in mainland China from its mobile app.

Terra Luna Classic (LUNC), formerly LUNA, fell 12.2%. South Korean authorities summon all employees at Terraform Labs as part of a comprehensive survey.

With the mixed performance of the altcoin market, it is worth looking at how traders are positioned based on trading and derivatives metrics.

Tether premium indicates lack of retail demand

OKX Tether (USDT) premium is a good indicator of cryptocurrency demand from retail traders in China. It measures the difference between peer-to-peer (P2P) transactions in China and the U.S. dollar.

Excessive buying demand tends to stress indicators above fair value. On the other hand, during a bearish market, Tether’s market quotes were flooded, resulting in discounts of 4% or more.

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

Between May 23 and 30, the tether premium in RMB terms averaged 2% discount, indicating a lack of retail demand. What’s more, a 4% rally in cryptocurrency market capitalization on May 30 didn’t change investor sentiment.

related: Crypto’s Youngest Investors Hold on to Headwinds and Headlines

Derivatives indicators slightly bearish for altcoins

Perpetual contracts, also known as inverse swaps, have embedded rates that are typically charged every eight hours. Exchanges use this fee to avoid exchange risk imbalances.

A positive funding rate indicates that bulls (buyers) need more leverage. However, when the shorts (sellers) need additional leverage, the opposite happens, causing the funding rate to go negative.

Accumulated perpetual contract financing rate on May 30. Source: Coinglass

Perpetual contracts reflect mixed sentiment as Bitcoin and Ethereum hold slightly positive (bullish) funding rates, but altcoins show the opposite. For example, Solana’s negative rate of 0.20% per week equals 0.8% per month, which is irrelevant for most derivatives traders.

The data suggests that investors are in no rush to confirm that the recent price recovery represents a trend change. While the total cryptocurrency market capitalization has breached support at $1.3 trillion, traders are pricing in a higher chance of a downturn. So far, there are no clear signs of a market bottom, according to trading indicators.

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