The cryptocurrency market has been experiencing a 10-week losing streak, with the total market capitalization falling to $1.02 trillion on June 15, its lowest level in three months. The bearish trend has been fueled by regulatory uncertainty, with recent lawsuits brought by the Securities and Exchange Commission against crypto exchanges Binance and Coinbase, as well as delisting of certain cryptocurrencies by New York-based derivatives exchange Bakkt. Additionally, lack of transparency on stablecoins is causing discomfort, with reports on Tether reserves’ exposure to Chinese debt markets being cited as a reason for drop in its premium in Asian markets.
Despite the worsening crypto regulatory environment, two derivatives metrics indicate that bulls are not yet throwing in the towel. The seven-day funding rate for BTC and ETH is neutral, indicating balanced demand from leveraged longs (buyers) and shorts (sellers) using perpetual futures contracts. However, BNB was an exception, with traders paying up to 1% per week for short bets due to added risks after regulatory scrutiny over the Binance exchange.
While there has been a recent bounce from the support level, any gains above $1.12 trillion in capitalization (up 10% from the $1.02 trillion low) will likely be short-lived over the next few months. Therefore, with the Bitcoin halving still over 300 days away, bulls are currently pinning their hopes on a potential Bitcoin ETF approval and/or a Federal Reserve rate cut as potential bull market catalysts. However, readers should conduct their own research when making investment decisions, as every investment and trading move involves risk.