Bitcoin takes 3 hits, but investors remain calm amid price drop

Investors have grown more confident about adding to altcoin positions after Bitcoin (BTC) suffered its third straight rejection. For Bitcoin, the $50,000 target appears to be more challenging than previously expected.

On March 14, the European Union rejected a proposed rule that could ban the energy-intensive proof-of-work (PoW) mining algorithm used by bitcoin and other cryptocurrencies, Euronews Next reported. Some EU lawmakers have been pushing to ban PoW mining due to energy concerns.

In terms of performance, the total market capitalization of all cryptocurrencies has remained relatively flat over the past seven days, inching up 0.4% to $1.77 trillion. However, the apparent underperformance of the overall market is not representative of some mid-cap altcoins gaining 17% or more in a week.

Bitcoin is up 2.5% over the past seven days, while ethereum (ETH) is up 3.6%. However, none of them can compare to the altcoin rally that has taken place. Here are the biggest gains and losses among the 80 largest cryptocurrencies by market capitalization.

THORChain (RUNE) rebounded after enabling synthetic tokens on March 10. These derivatives are pegged to the value of other underlying collateral assets. In THORChain's version, the project has chosen to back its composition with 50% base assets and 50% RUNE.

Privacy coins ZCash (ZEC) and Monero (XMR) rallied as U.S. President Joe Biden signed an executive order on March 9 focusing on creating a regulatory framework for cryptocurrencies, citing the potential for cryptocurrencies to circumvent possible role in sanctions.

Finally, Terra (LUNA) rallied after Terraform Labs donated $1.1 billion to the reserves of the Luna Foundation Guard (LFG) on March 11. LFG was launched in January as part of a broader effort to grow the Terra ecosystem and improve the sustainability of the network's stablecoin.

Fantom (FTM), on the other hand, led the worst performance after well-known Fantom Foundation team members Andre Cronje and Anton Nell announced their departure.

Meanwhile, Celo (CELO) suffered a hack of a third-party email service on March 10. A phishing email was sent to all 25,741 of its users, but the attack was quickly investigated and the Celo Foundation issued a warning on its social channels.

Tether Premiums Show Resilience From Retail Markets

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

Excessive buying demand tends to drive this metric above fair value, which is 100%. On the other hand, during bear markets, Tether’s market is overquoted, creating discounts of 4% or more.

Currently, Tether's premium is 100.7%, which is neutral. Still, there has been continued improvement over the past two months. This data suggests that retail demand is picking up, which is positive considering the total cryptocurrency market capitalization fell by 50% between January 1 and March 14.

Funding rates show a lack of excitement

Perpetual contracts, also known as inverse swaps, have implicit rates that are typically charged every eight hours. Perpetual futures are the derivatives of choice for retail investors because their prices tend to track the general spot market perfectly.

Exchanges use this fee to avoid imbalances in exchange exposure. A positive funding rate indicates that bulls (buyers) are demanding more leverage. However, the opposite happens when shorts (sellers) demand more leverage, causing the funding rate to turn negative.

Note that in most cases, the cumulative seven-day funding rate is flat. Such data suggests that the need for leverage is balanced between bulls (buyers) and sellers (shorts).

For example, Polkadot’s (DOT) negative 0.30% weekly funding rate equates to negative 1.2% monthly, which is not a burden for traders establishing futures positions. Normally, when there is an imbalance created by excessive pessimism, this rate can easily exceed 5% per month.

One could argue that the third failure of Bitcoin's price to sustain above $42,000 was a coup de grace for the bulls as Bitcoin failed to show signs of a surge amid global macroeconomic uncertainty and commodities Strong momentum.

However, judging by the Tether premium, there is still no sign of Asian retail bearishness, nor is there any sign of pressure on leveraged shorts (sellers) in the futures market.