BTC and altcoins took a hard hit on December 13, but derivative data shows traders are viewing USD 46,000 as a signal as to whether the current market structure will hold up. .

December 13th is likely to be remembered as “Bloody Monday” after Bitcoin (BTC) price lost support at $ 47,000 and altcoin prices fell as much as 25% in a split second.

When the move happened, analysts quickly concluded that Bitcoin’s 8.5% correction was directly related to the Federal Reserve’s Open Market Committee (FOMC) meeting, which begins May 15-12.

Investors fear that at some point the US Federal Reserve will begin easing, in simple terms, a reduction in the US Federal Reserve’s bond purchase program. The logic is that changing existing monetary policy will have a negative impact on riskier assets. While there is no way to be certain of such a hypothesis, Bitcoin has seen a 67% gain year-to-date through December 12th. It is therefore up to investors to pocket those gains before those gains in the context of the current correction in BTC price.

Bitcoin price is down 8.2% over the past week but has also outperformed the broader altcoin market. This is in stark contrast to the last 50 days, when the market share of the leading (dominant) cryptocurrency fell from 47.5% to 42%. Investors can easily escape to Bitcoin due to the relatively lower risk compared to altcoins.

Tether discount hits bottom at 4%

OKEx Tether (USDT) Premium or Discount measures the difference between peer-to-peer (P2P) transactions in China and the official US currency. Metrics above 100% show excessive demand for crypto investments. On the other hand, a 5% discount usually indicates hot sales activity.

The tether indicator bottomed at 96% on December 13, which is a slight, but not alarming, drop for the overall 10% decline in crypto market cap. However, it has been more than two months since the metric exceeded 100%, indicating a lack of enthusiasm among traders in China.

To further demonstrate that the Dec. 13 decline had little impact on investor sentiment, the total 24-hour liquidation was $ 400 million.

More importantly, only $ 300 million in long leveraged contracts had to be canceled due to insufficient margin. That number looks insignificant compared to the December 3 crash when leveraged buyers valued at $ 2.1 billion closed their positions.

There is currently no excessive demand from Bitcoin bears

To further show that the market structure for cryptocurrencies is not strongly influenced by a sharp drop in prices, traders should analyze perpetual futures contracts. These contracts have a fixed rate and typically charge a fee every 8 hours to offset the risk of the stock market.

A positive coverage ratio indicates that buyers (buyers) are demanding more leverage. However, the reverse situation occurs when the short seller (seller) needs more leverage and this causes the funding rate to go negative.

Given that most cryptocurrencies suffered significant losses on December 13th, the overall market structure was well organized. If the demand is too great to drop below $ 46,000 for those betting on the Bitcoin price, the 8-hour funding for perpetual futures contracts will drop below 0.05%.

Trading Tether at a 4% discount in China-based markets, $ 300 million on long-term contract cancellations, and neutral funding rates are not signs of a bear market. Unless these fundamentals change dramatically, there is no reason to ask for a Bitcoin price of $ 42,000 or less.

The views and opinions expressed here are solely those of author and do not necessarily reflect the views of Cointelegraph. Every investment and trading movement involves risks. You should do your own research when making a decision.