Aptos

5 altcoins that produced double-digit gains as Bitcoin price rallied in January

Bitcoin’s strong monthly performance translated to outsized gains in APT, GALA, T, MANA and SOL, making them the top performing altcoins in January.

The rally in cryptocurrency markets started in early January with a spike in heavily-shorted altcoins and Ethereum (ETH) liquid staking derivative (LSD) tokens due to the upcoming network upgrade in March. Soon gains started to show across the board as buyers started to play catch up. 

The improving macroeconomic conditions, such as reduced inflation and a stable job sector in the United States, provided additional tailwinds for the positive rally. Bitcoin (BTC) is en route to its most impressive closing for January since 2013. Its price has gained 40% year-to-date from the opening value of $16,530.

Another important catalyst for January’s rally was a short squeeze across the crypto market. After the FTX debacle and the lack of bullish narratives for the niche space, most investors expected growth to slow down in 2023.

There are unresolved issues such as potential Digital Currency Group fallout, geopolitical tension between Russia and Ukraine and recession risks due to the Fed’s aggressive quantitative tightening policies. Thus, most traders didn’t expect strong price rallies so early inthe year.

As it turns out, negative sentiment and crowded positions in the futures market continued to fuel more upside. There’s a strong chance of a pullback soon after steep gains. It remains to be seen if the pullback levels are attractive enough for buyers to turn it into a medium-to-long-term bullish trend. Let’s take a look at the top performing cryptocurrencies for January.

Top crypto market gainers in January. Source: CoinMarketCap

Aptos (APT)

Launched in October, Aptos is a relatively new blockchain in the space that leverages the technology of Facebook/Meta’s discarded crypto project, Libra. It carries significant face value based on its executive team, composed of former Meta engineers who also built the Move programming language to make the chain scalable and decentralized.

While the project carries much reputation, its fundamentals do not justify the price. The disbelief among investors is part of the reason behind the APT price rally. A market capitalization of $3 billion for a four-month-old project has surprised many onlookers. There’s also suspected market manipulation in the APT/KRW pair on Upbit, giving rise to the Kimchi premium. It is difficult to pinpoint a specific factor driving its demand in South Korea.

APT/USD broke above its previous peak of around $10, recorded around its launch. Technically, the token is in price discovery mode right now. Thus, there are few sell-side resistance levels besides the latest peak of $20 and the psychological level at $25. Unless the positive catalysts in the negative funding rate for perpetual swaps and the Kimchi premium cool off, the rally may still have wings.

But the token’s relative strength index (RSI), a price momentum indicator, has spiked to oversold territory, suggesting the possibility of a pullback. The moving average convergence divergence (MACD) indicator shows a slight bullish deviation with a less steep rise in the metric compared to the price. Still, the presence of buying volume is reassuring for APT bulls. The support for the token lies at $14.75 and $10.40.

APT/USD daily price chart with RSI and MACD indicator. Source: TradingView

Gala (GALA)

Similar to Aptos, Gala (GALA) also benefited from the excess negative positioning in the futures market. The gain in GALA/USD from $0.02 to $0.07 can be primarily attributed to wipe out of short positions.

GALA price (yellow) and funding rate. Source: Coinglass

The token suffered significant inflation of around 17,123,286 GALA daily, which accounts for around $28.2 million monthly at current prices. This raises concerns that the recent price pump could be short-lived.

On Jan. 25, Gala’s team introduced a new roadmap of the project in which they seek to update the tokenomics to reduce inflation and introduce a new burn mechanism. They are working on an independent Gala chain, where GALA tokens will be used to pay transaction fees.

On top of that, the daily issuance of GALA may also reduce after a vote is passed to change the time-based halving schedule to a supply-based one, bringing the halving closer than July 21.

The upgrade announcements have added to the buying pressure in GALA/USD, evident in a spike in buying volume. The token is trading above its 200-day exponential moving average at $0.052. If buyers build support above this level, the price can run toward the July 2022 breakdown levels near $0.164.

GALA/USD daily price chart. Source: TradingView

Threshold (T)

Threshold was born from the merger of two projects, Keep Network and NuCypher, which have combined their technologies to build a decentralized bridge network. Node operators on the Threshold network stake the platform’s native T token and Ether to validate the transfers between Bitcoin and Ethereum. This technology was borrowed from Keep Network, while NuCypher adds a layer of privacy to the protocol.

In January, the project’s native token nearly tripled in price, benefiting from the v2 launch and Coinbase’s listing announcements. The upgraded version of the Threshold protocol will enable tBTC (threshold Bitcoin) mints on Ethereum, which are backed by Bitcoin and pegged 1:1 to the BTC price.

The beginning of tBTC mints on Ethereum via Threshold Network will likely increase the network’s total locked value (TVL), making Threshold nodes more valuable. Initially, the project will launch a semi-decentralized version, Optimistic Minting, and gradually move to a decentralized system of nodes.

There’s a significant market opportunity for Threshold after the dissolution of RenBTC. Wrapped Bitcoin (WBTC) currently commands a dominant share of 93.6% of the total Bitcoin bridged to Ethereum.

Still, the recent 190% increase is starting to show signs of a buy-the-rumor, sell-the-news type of event, especially factoring in the Coinbase-led rise. The support for buyers lies at $0.027, with the next level of resistance at $0.145.

Decentraland (MANA)

The metaverse-themed projects Decentraland (MANA) and The Sandbox (SAND) witnessed a revival of the VR narrative as Apple is rumored to be launching its VR headset collection this spring. More recently, the Decentraland team released its manifesto for the current year, with a focus on growing its developer and creator community.

While Decentraland is one of the earliest metaverse projects with a massive opportunity to capture the future Web3 market, the present rally is showing overbought characteristics in the short-term.

The RSI indicator shows a reading above its bullish resistance. The MACD indicator shows a divergence with little to no-change in the metric to complement the Jan. 28 surge of 16.5%.

MANA/USD daily price chart. Source: TradingView

Nevertheless, the breakout above 200-day moving average and resistance from the FTX breakdown levels at 0.70 is encouraging for technical buyers. It remains to be seen if the surge was a just stop hunt of short orders or stemming from actual demand. Support for the token lies at the 50-day EMA, current at $0.54, and 2022 lows of $0.27.

Solana (SOL)

Solana (SOL) benefited from excessive negative sentiment around the blockchain’s future. The price rally was a classic case of a short squeeze in the futures market. While the fundamentals pointed toward a death spiral in its price, the market played out differently. By leveraging low liquidity conditions, buyers were able to push the prices higher until few sellers remained.

The market maker and venture capitalist entity, Alameda Research, was the primary source of liquidity for Solana’s DeFi projects. It was also one of the largest backers of its ecosystem projects. The DeFi community will face significant challenges within Solana due to a lack of liquidity.

Solana developers and the foundation have been working hard to make the network stable and more decentralized. While the network remained stable through the FTX debacle, it appears to have lost the market’s trust thanks to frequent downtimes. Moreover, Alameda/FTX owns around 10.7% of the total supply of SOL, which will likely add to the selling pressure for the next few years.

Their NFT space, while placed second in terms of trading volume across blockchains, is starting to see the departure of top performers like DeGods, y00ts, and most recently, F Studio. It remains to be seen if the community can build back up. The task will be challenging without the support of its most prolific backers.

On long timeframes, the $30 level is a crucial resistance and support level for SOL/USD. If buyers consolidate above this level, the positive momentum in the token’s price will likely stretch into Q1 2023. However, given that the rally is mainly driven by a short-side wipeout in the futures market, there’s a higher likelihood for a significant correction, followed by a period of accumulation, until a meaningful run can take form.

Last but not least, the LSD-narrative tokens deserve a mention in the monthly winners list. The native tokens of Ethereum LSD platforms nearly doubled in price across the board thanks to the upcoming Shanghai upgrade.

The Frax DAO was the highest gainer among LSD tokens, benefiting from a strong rise in the staked Ether on its platform. The platform is able to attract liquidity by providing additional yield on staking ETH through leveraging its position on Curve Finance.

The Frax DAO is the largest owner of CVX tokens, which gives them priority control over Curve emissions. Currently, staking frxETH on Curve earns around 9-10% annual yield, which is two times higher than the average LSD yield of around 4%.

Given that Ethereum’s Shanghai upgrade is still a month away and there’s room for growth of LSD platforms, the attention toward LSD tokens could likely sustain through February.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

LTC, AVAX, APT and FTM prepare to rally as Bitcoin price targets $24K

Bitcoin bulls look to push BTC price to $24,000 and in doing so, LTC, AVAX, APT and FTM could extend their monthly gains.

Bitcoin (BTC) has rallied nearly 40% so far in January, which is the best start to the year since 2013. The sharp up-move has turned several on-chain signals bullish, according to on-chain analyst Cole Garner.

Usually, a sharp recovery from the market lows, driven by the leader, is a sign that strong hands may be buying aggressively. That could be because traders believe the selling may have been overdone in the near term or they found the valuation to be attractive.

Crypto market data daily view. Source: Coin360

After the initial runup, a swift correction could be expected, which will shake out the weak hands. The next fall will also confirm whether Bitcoin has formed a bottom or not. If the low is confirmed, several altcoins may start to outperform Bitcoin in the near term.

Which altcoins are showing promise in the near term? Let’s study the charts of Bitcoin and select altcoins to see which could extend their up-move in the next few days.

BTC/USDT

Bitcoin has been trading above $22,800 since Jan. 25, which suggests that bulls are trying to flip the level into support.

BTC/USDT daily chart. Source: TradingView

The upsloping 20-day exponential moving average ($21,558) indicates that bulls are in command but the relative strength index (RSI) in the overbought territory suggests that the rally may be overextended in the near term.

If buyers kick the price above $23,816, the BTC/USDT pair could start its northward march toward $25,211. This level may act as a formidable resistance.

On the downside, the 20-day EMA is an important level for the bulls to defend because if it cracks, the pair may fall to the psychological support at $20,000.

BTC/USDT 4-hour chart. Source: TradingView

The RSI on the four-hour chart is forming a negative divergence indicating that the buyers may be losing their grip. If bulls want to assert their dominance, they will have to push the price above the $23,816 resistance. That could start the next leg of the up-move.

Conversely, if the price turns down from the overhead resistance, the bears will try to yank the pair below the moving averages. There is a minor support at $22,715 but if this level collapses, the pair could retest $21,480.

LTC/USDT

Litecoin (LTC) has been in a strong uptrend for the past several days. After a brief consolidation, buyers propelled the price above the overhead resistance of $92, indicating that the up-move remains intact.

LTC/USDT daily chart. Source: TradingView

The LTC/USDT pair could rally to the psychological level of $100 where the bears may again try to erect a roadblock. If bulls do not give up much ground from this level, the pair may extend its journey to $107. The upsloping 20-day EMA ($86) and the RSI near the overbought territory indicate advantage to buyers.

This positive view could invalidate if the price turns down and slips below the 20-day EMA. The pair could then drop to $81 and later to $75.

LTC/USDT 4-hour chart. Source: TradingView

The break and close above the $92 level suggest that the consolidation resolved in favor of the buyers. If bulls sustain the price above $92, the pair could rise toward the pattern target of $98.

The bears are likely to have other plans. They will try to drag the price below the breakout level of $92 and trap the aggressive bulls. If they manage to do that, the pair could fall to $86. This is an important level for the bulls to defend because a break below it could shift the advantage in favor of the bears.

AVAX/USDT

Avalanche (AVAX) surged above the resistance line on Jan. 27 and reached the overhead barrier at $22 on Jan. 28.

AVAX/USDT daily chart. Source: TradingView

The bears are trying to stall the recovery at $22 but the bulls do not seem to be in a hurry to book profits. This increases the likelihood of a break above the overhead hurdle. If that happens, the AVAX/USDT pair could accelerate toward $30. There is a minor resistance at $24 but it is likely to be scaled.

Another possibility is that the price turns down and retests the resistance line. If the price rebounds off this level, it will suggest that the bulls have flipped it into support. That could enhance the prospects of a break above $22. The bears may gain the upper hand if the price dives below the 20-day EMA ($17).

AVAX/USDT 4-hour chart. Source: TradingView

The four-hour chart shows the pair has pulled back near the 20-dayEMA. If the price jumps from the current level, the bulls will again attempt to thrust the pair above the overhead obstacle at $22. If this level is scaled, the pair could rally to $24.

The first sign of weakness will be a break and close below the 20-EMA. That could present an opportunity for the bears to make a comeback. The sellers could gain the upper hand if they pull and sustain the pair below the resistance line.

Related: South Korea to deploy cryptocurrency tracking system in 2023

APT/USDT

Aptos (APT) has been having a dream run in the past few days. Usually, when an asset picks up momentum, it continues to move in the same direction for some time.

APT/USDT daily chart. Source: TradingView

The APT/USDT pair turned down from $20.40 on Jan. 26 but the bulls are trying to arrest the pullback at $16.62. The shallow correction shows that every minor dip is being purchased by the bulls. Buyers will try to drive the price above $20.40 and start the next leg of the uptrend. The pair could then soar to $24.

The risk to this assumption is that the RSI has been in the overbought territory for the past few days. This increases the risk of a short-term correction. If the price turns down and plummets below $16.60, the pair could slide to $14.57 and then to the 20-day EMA ($12.23).

APT/USDT 4-hour chart. Source: TradingView

The four-hour chart shows a negative divergence forming on the RSI. If the price breaks below the 20-EMA, the pair could test the 50-SMA. This is an important support to monitor because if it cracks, the pair could fall to $12.

Contrarily, if the price turns up and breaks above $20.40, it will indicate that bulls have reasserted their supremacy. That may invalidate the negative divergence developing on the RSI and resume the uptrend.

FTM/USDT

Fantom (FTM) has been in a stupendous run since breaking above the downtrend line. The sharp rally of the past few days suggests aggressive buying by the bulls.

FTM/USDT daily chart. Source: TradingView

The indicators signal that bulls are firmly in control. During strong up-moves, the corrections are short-lived as bulls buy on every minor dip. The bears are trying to stall the up-move near the psychological resistance at $0.50 but if bulls pierce this level, the FTM/USDT pair could soar to $0.56 and then to $0.63.

Sometimes, vertical rallies are followed by sharp declines. Therefore, traders must be careful as a break and close below $0.43 could sink the pair to the 20-day EMA ($0.37). This is the key level to watch out for on the downside because a break below it could signal that the uptrend may have ended in the near term.

FTM/USDT 4-hour chart. Source: TradingView

The pair turned down from the overhead resistance at $0.50 but found support at the 20-EMA. This indicates that the sentiment remains positive and traders are buying the dips. The bulls will again attempt to clear the overhead hurdle at $0.50 and resume the up-move.

The bears may have other plans as they will try to pull the price below the 20-EMA. This is an important level to keep an eye on in the short term as a break below it could open the doors for a possible drop to the 50-day simple moving average. If this level also cracks, the next stop could be $0.36.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

5 reasons why the Aptos (APT) rally could still have wings

Aptos’ star-studded founders and the market’s disbelief in the rally could further fuel the rise in APT price.

Aptos’ APT reached a new all-time high of $20.39 after posting gains exceeding 400% since the start of 2023. While the rally could just be a pump-and-dump event due to the perception of weak fundamentals, increasing negative sentiment toward the token will likely fuel the prices in the short term.

Let’s explore some of the factors that could be propelling the Aptos price rally.

A rich history and strong investor backing

Aptos is a byproduct of Facebook’s attempt with the Libra blockchain, which regulators forcibly shut down. Two of Libra’s leadership team members, Mo Shaikh and Avery Ching, later found Aptos, a decentralized version of the abandoned blockchain project.

The project is based on the Move programming language and introduces a new class of layer-1 blockchains that will compete against the likes of Solana and Cardano. The primary reasons behind the tailwinds for the APT token include investors’ hope for a technological breakthrough that could finally provide a scalable, secure, decentralized blockchain.

Aptos raised $350 million in 2022, which included a $200 million seed round led by Andreessen Horowitz and a $150 million Series A funding round led by FTX Ventures and Jump Crypto. Later, Binance made a follow-on strategic investment to help boost the Aptos ecosystem.

FTX Ventures’ prominence induces the risk of a sell-off from the defunct entity. In this regard, some investors might be reassured by the involvement of other venture capitalists like Multicoin Capital, Blocktower Capital and Coinbase Ventures. High-volume exchanges like Binance could also soften the blow dealt by FTX and Alameda Researc.

Steady ecosystem development

The Aptos blockchain was launched in October 2022 and is still in the nascent stages of ecosystem development. There are few decentralized finance or nonfungible token projects on the blockchain, and smart contract activity is currently limited. More than 94% of the blockchain transactions are for APT transfers, showing negligible decentralized application activity.

Aptos transaction volume by purpose of transactions. Source: Pinehearst

Development activity has been around average on the blockchain. The number of active developers on Aptos is more than Avalanche and Tezos but behind Solana, Polkadot, Cardano and Ethereum.

Number of active developers working on blockchains and dApps. Source: token terminal

Aptos is not the first project to build a hefty market capitalization without significant on-chain activity. Cardano and Polkadot are prominent examples, where the rise in their native token’s price is primarily led by the superior technology narrative.

However, even in this respect, the total size of the Aptos community is smaller than top layer-1 projects. Cardano and Polkadot have more than 1.3 million Twitter followers on their accounts. At the same time, Avalanche has over 855,600 followers, and Tezos has more than 470,000. Aptos is lagging behind, with a 364,500 follower count.

Moving forward, the efforts of the business development team of Aptos and the performance of the blockchain will likely catalyze future price movements.

Traders’ disbelief could push APT price higher

Given the lack of activity and limited ecosystem growth, the rally in APT has taken the market by surprise. It is not difficult to find tweets hinting at the overblown market capitalization of the token.

However, going against the trend can be risky for sellers. The short-side trade for APT perpetual swaps is getting crowded, as the token has surpassed its October 2022 peak of around $15, which is evident in the negative funding rate for APT.

Funding rate for APT perpetual swaps. Source: Coinglass

It provides an opportunity for buyers to hunt sellers’ liquidation levels by pushing the price up. And in crypto markets, the short squeeze of short orders is realized more often than not.

The sell pressure on APT is limited

APT’s tokenomics limits the selling pressure on the token for the first year from its launch in October 2022. The release schedule of APT delays investor unlocks until October 2023, after which there will be a steep rise in the circulating supply of APT tokens. Until the unlock begins, the only source of inflation is from staking rewards, which is 7% for staked tokens.

Initially, the foundation distributed 2% of the supply to early users and developers. In all probability, users who wanted to sell their APT would have already sold in the three months since its launch.

Kimchi premium

Significant buying interest for APT is coming from the South Korean won trading pair on the UpBit crypto exchange. The exchange constitutes nearly 40% of Aptos’ trading volume. The price of APT on Upbit is trading around 1%–3% higher than the market price, which indicates high demand in the region — hence, the same Kimchi premium.

Aptos spot trading data. Source: Coingecko

There’s a chance that the volumes of Upbit are inflated from wash trading, or it could be an attempt to manipulate the markets. The exchange’s owners have come under the purview of regulators many times in the past. Nevertheless, the buying pressure will likely persist until the Kimchi premium resolves.

While the prices may have started due to a broader positive trend in cryptocurrency prices, it’s taking the shape of a disbelief rally by proving sellers wrong. Until the negative sentiment and Kimchi premium dissolve, the chances of Aptos moving higher are considerable.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

US institutions account for 85% of Bitcoin buying in ‘very positive sign’ — Matrixport

Matrixport’s head of research and strategy suggests the industry will soon see layer 1 and other altcoins outperforming relative to Bitcoin.

Institutional investors are “not giving up on crypto,” with recent data pointing to as much as 85% of Bitcoin buying being the result of American institutional players, according to Matrixport’s chief strategist. 

Markus Thielen, the head of research and strategy at the financial services firm, told Cointelegraph the evidence shows that institutions are not “giving up on crypto” and is an indicator that we might be entering a new “crypto bull market now.”

The data was shared in a Jan. 27 report from Matrixport, which suggests that it can be distinguished whether a digital asset is more favorable by retail or institutional investors at any given time based on whether that asset is performing well in the United States or Asian trading hours.

The report stated that if an asset that trades 24 hours “performs well” during U.S. trading hours, it indicates that U.S. institutions are buying it, while an asset that sees growth during Asian trading hours indicates that Asian retail investors are buying it.

The report cited that Bitcoin (BTC) is up 40% this year, with 35% of those returns occurring during U.S. trading hours, meaning there is an “85% contribution” associated with U.S.-based investors, indicating that U.S. institutions are buyers of Bitcoin right now.

Thielen added that previous data shows that institutions typically first start buying Bitcoin before investing in other cryptocurrencies. He noted:

“If history is any guide, then we should see the outperformance of layer 1 and altcoins relative to Bitcoin.”

While the report highlighted that news regarding other projects positively impacted token prices such as Lido DAO (LDO) and Aptos (APT), the crypto rally only started once the U.S. inflation data was released on Jan. 12.

It was also mentioned that Ether (ETH) appears to be performing well during U.S. hours, indicating “institutional flows” into the cryptocurrency, however, APT is doing well around the clock.

“Aptos is seeing a mix of strong returns during U.S. trading hours AND during Asia trading hours.”

The report concluded that this “should be a very positive sign for Bitcoin” as institutional adoption continues.

Related: Data shows pro Bitcoin traders want to feel bullish, but the rally to $23K wasn’t enough

In earlier comments to Cointelegraph, economist Lyn Alden believes that Bitcoin is currently playing “a bit of catch-up,” getting back to where it would have beenwithout the FTX collapse occurring.

Alden warned that there is “considerable danger ahead” for the second half of 2023, citing liquidity conditions being “good right now” partly because of the U.S. as a significant factor.

Alden explained that as the U.S. Treasury is drawing down its cash balance to keep the country’s debt levels low, it pushes “liquidity into the financial system.”

Meanwhile, popular trader and market commentator TechDev posted a Twitter update on Jan. 26 showing the price correlation between Bitcoin and gold, stating that if Bitcoin continues to follow the price of gold, it might even “crack the $50,000 mark.”

Total crypto market cap closes in on $1T right as Bitcoin price moves toward $20K

Crypto traders chase after neutral-to-bullish options as Bitcoin price targets $20,000 and the total crypto market cap surges above $900 billion.

The total cryptocurrency market capitalization reached its highest level in over two months on Jan. 13 after breaking above the $900 billion mark on Jan. 12.

While the 15.5% year-to-date gain sounds promising, the level is still 50% below the $1.88 trillion crypto market cap seen before the Terra-Luna ecosystem collapsed in April 2022.

Crypto markets total capitalization, USD. Source: TradingView

“Hopeful skepticism” is probably the best description of most investors’ sentiment at the moment, especially after the recent struggles of recapturing a $1 trillion market capitalization in early November. That rally to $1 trillion was followed by a 27.6% correction in three days and it invalidated any bullish momentum that traders might have expected.

Bitcoin (BTC) has gained 15.7% year-to-date, but a different scenario has emerged for altcoins, with a handful of them gaining 50% or more in the same period. Some investors attribute the rally to the U.S. Consumer Price Index (CPI) data released on Jan. 12, which confirmed the thesis that inflation was continuing to drop.

While the macroeconomic conditions might have improved, the situation for cryptocurrency companies seems gloomy. New York-based Metropolitan Commercial Bank (MCB) announced on Jan. 9 that it would close its crypto-assets vertical, citing changes in the regulatory landscape and recent setbacks in the industry. Crypto-related clients accounted for 6% of the bank’s total deposits.

On Jan. 12, the U.S. Securities and Exchange Commission (SEC) charged cryptocurrency lending firm Genesis Global Capital and crypto exchange Gemini with offering unregistered securities through Gemini’s Earn program.

A final blow came on Jan. 13 after Crypto.com announced a new wave of staff layoffs on Jan. 13, reducing the global workforce by 20%. Other crypto exchanges that recently announced job cuts in the last month include Kraken, Coinbase and Huobi.

Despite the dreadful newsflow, the macroeconomic tailwinds favoring risk assets ensured that only UNUS SED (LEO) closed the first 13 days of 2023 in the red.

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

Lido DAO (LDO) gained 108% as investors expect the upcoming Ethereum Shanghai upgrade that enables staked Ether withdrawals to boost the demand for liquid staking protocols.

Aptos (APT) rallied 98% after some decentralized applications started to pick up volume, including Liquidswap decentralized exchange (DEX), Ditto Finance staking and yield and nonfungible token (NFT) marketplace Topaz Market.

Optimism (OP) gained 70% after the layer-2 network picked up activity and, combined with its competitor Arbiturm, surpassed Ethereum’s main chain transactions.

Leverage demand is balanced between bulls and bears

Perpetual contracts, also known as inverse swaps, have an embedded rate that is usually charged every eight hours. Exchanges use this fee to avoid exchange risk imbalances.

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

Perpetual futures accumulated 7-day funding rate on Jan. 13. Source: Coinglass

The 7-day funding rate was near zero for Bitcoin and altcoins, meaning the data points to a balanced demand between leverage longs (buyers) and shorts (sellers).

If bears are paying 0.3% per week to maintain their leveraged bets on Solana (SOL) and BNB (BNB), that adds up to a mere 1.2% per month — which is not relevant for most traders.

Related: Bitcoin price rallies to $19K, but analyst says a $17.3K retest could happen next

Traders’ demand for neutral-to-bullish options has spiked

Traders can gauge the market’s overall sentiment by measuring whether more activity is going through call (buy) options or put (sell) options. Generally speaking, call options are used for bullish strategies, whereas put options are for bearish ones.

A 0.70 put-to-call ratio indicates that put options open interest lag the more bullish calls by 30%, which is bullish. In contrast, a 1.40 indicator favors put options by 40%, which can be deemed bearish.

BTC options volume put-to-call ratio. Source: laevitas.ch

Between Jan. 4 and Jan. 6, the protective put options dominated the space as the indicator soared above 1. The movement eventually faded and the opposite situation emerged as the demand for neutral-to-bullish call options has been in excess since Jan. 7.

The lack of leverage shorts and demand for protective puts points toward a bull trend

Considering the 15.7% gain since the start of 2023, derivatives metrics reflect zero signs of demand from leverage shorts or protective put options. While bulls can celebrate that the $900 billion total market capitalization resistance faced little resistance, derivatives metrics show bears are still patiently waiting for an entry point for their shorts.

Considering the market’s bearish newsflow, the bulls’ main hope remains solely in the framework of a favorable macroeconomic environment, which largely depends on how retail sales data reports next week.

China is also expected to release its economic figures on Jan. 16 and the U.S. will do the same on Jan. 18. Another potential impact on price could be the United Kingdom’s CPI print which is set to be announced on Jan. 18.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The market is hot, but Solana is not — Data explains why SOL price is lagging

SOL price has been in a three-month downtrend, but recent newsflow and events could trigger a reversal.

Solana (SOL) has been in a steady downtrend for the past three months, but some traders believe that it may have bottomed at $26.80 on Oct. 21. Lately, there h been a lot of speculation on the causes for the underperformance and some analysts are pointing to competition from Aptos Network.

Solana price at FTX, USD. Source: TradingView

The Aptos blockchain launched on Oct. 17 and it claims to handle three times more transactions per second than Solana. Yet, after four years of development and millions of dollars in funding, the debut of the layer-1 smart contract solution was rather unimpressive.

It is essential to highlight that Solana presently holds an $11.5 billion market capitalization at the $32 nominal price level, ranking it as the seventh largest cryptocurrency when excluding stablecoins. Despite its size, SOL’s year-to-date performance reflects a lackluster 82% drop, while the broader global market capitalization is down 56%.

Unfortunate events have negatively impacted SOL’s price

The downtrend accelerated on Oct. 11 after a leading decentralized finance application on the Solana Network suffered a $116 million hack.

Mango Markets’ oracle was attacked due to the low liquidity on the platform’s native Mango (MNGO) token which is used for collateral. To put things in perspective, the hack represented 9% of Solana’s total value locked (TVL) in smart contracts.

Other negative news emerged on Nov. 2 as German data center operator and cloud provider Hetzner started blocking crypto-related activity. The company’s terms of service prohibit customers from running nodes, mining and farming, plotting and storing blockchain data. Still, Solana nodes have other cloud storage providers to choose from, and Lido Finance confirmed that the risk for their validators had been mitigated.

A potentially promising partnership was announced on Nov. 2 after Instagram integrated support for Solana-based nonfungible tokens (NFTs), allowing users to create, sell and showcase their favorite digital arts and collectibles. SOL immediately reacted with a 5.7% pump in 15 minutes but retraced the entire movement over the next hour.

To get a more granular view of what is going on with SOL price, traders can also analyze Solana’s futures markets to understand whether the bearish newsflow has affected professional traders’ sentiment.

Derivatives metrics show an unusual degree of apathy

Whenever there is relevant growth in the number of derivatives contracts currently in play, it usually means more traders are involved. In futures markets, longs and shorts are balanced at all times, but having a larger number of active contracts — open interest — allows the participation of institutional investors who require a minimum market size.

Solana futures open interest, USD. Source: Coinglass

In the past 30 days, the total open interest on Solana has been reasonably steady at $440 million. As a comparison, Polygon (MATIC) aggregated futures position soared to $415 million from $153 million on Oct. 3.

BNB Chain’s token, BNB (BNB), displayed a similar trend reaching $485 million, up from $296 million on Oct. 3.

With that said, open interest doesn’t necessarily mean that professional investors are bullish or bearish. The futures annualized premium measures the difference between longer-term futures contracts and the current spot market levels.

The futures premium (basis rate) indicator should run between 4% to 8% to compensate traders for “locking in” the money until the contract expiry. Thus, levels below 2% are bearish, while numbers above 10% indicate excessive optimism.

Solana annualized 3-month futures premium. Source: Laevitas.ch

Data from Laevitas shows that Solana’s futures have been trading in backwardation for the past 30 days, meaning the futures’ contract price is lower than regular spot exchanges.

Ether (ETH) futures are trading at a 0.5% annualized basis, while Bitcoin’s (BTC) stands at 2%. The data is somewhat concerning for Solana since it signals a lack of interest from leverage buyers.

Rumors about Alameda Research could create more pressure

It is hard to pinpoint the reason for so much apathy about Solana and even the complete dominance of leverage short demand. Even more curious is Alameda Research’s influence on Solana projects. Alameda is the digital asset trading company spearheaded by Sam Bankman-Fried.

Recently, trader and Crypto Twitter influencer Hsaka raised concerns about whether the firm has been suppressing SOLs price even after bullish catalysts emerged.

It’s probably highly unlikely that market participants will really find out Alameda Research’s impact on SOL price. Still, the theory raised by Hsaka could explain the rather unusual steady demand for leverage shorts and the negative basis rate. The arbitrage and market-making firm could have used derivatives instruments to reduce their exposure without selling SOL on the open market.

There are no signs that short sellers using SOL futures instruments are nearing liquidation or exhaustion, so their upper hand remains until the broader cryptocurrency market shows signs of strengthening.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

‘Performing as expected’ — Aptos Labs defends day 1 criticism

Aptos’ blockchain claims to handle three times the amount of transactions per second than Solana but day one of its launch saw the network transacting a much lower amount.

After four years of development and millions in funding, the layer-1 blockchain Aptos (APT) finally launched its mainnet on Oct. 17, albeit to somewhat mixed reception.

The proof-of-stake (PoS) blockchain has seen millions invested in it from venture capital firms and has previously claimed the ability to process 160,000 transactions per second (TPS).

However, some members of the community have pointed out that the claimed TPS is falling far short of expectations on the mainnet.

According to Aptos’ blockchain explorer, the network is seeing around 4 TPS at the time of writing, while some users on Twitter have reported not being able to send transactions.

Others on Twitter noticed the Aptos Discord was closed for a few hours after the launch of the mainnet, accusing the team was attempting to stop discussion around potential launch issues.

Cointelegraph reached out to Aptos for comment and was directed to a “Day one update” tweet by Aptos on Oct. 18. 

In the tweet, Aptos said the network is “performing as expected” with activity increasing as more ecosystem participants join. Cointelegraph was able to view a variety of transactions from users using its blockchain explorer.

Aptos also said it closed comments on its Discord and Telegram channels to “protect the community from scams” and they will “return to normal when appropriate.”

The tokenomics of Aptos is not yet publicly available, leading some to cite concerns that cryptocurrency exchanges such as Binance and FTX are listing its token without such information available to their customers.

Related: Court partially denies Aptos Labs’ motion to dismiss Glazer’s $1 billion lawsuit

Aptos has seen millions invested from venture capital firms, with the most recent round of funding in July netting Aptos Labs $150 million. A prior round in March raised $200 million with participants including Andreessen Horowitz (a16z), FTX Ventures and Coinbase Ventures.

Aptos Labs was created by former Meta employees Mo Shaikh and Avery Ching, who were involved in the failed Diem blockchain project, which wound down ​​in February of this year and sold its intellectual property and other assets.

The blockchain is built on a programming language originally developed for the defunct Meta-built Diem blockchain.