Any dip buyers left? Bulls are largely absent as the total crypto market cap drops to $1.65T

The total crypto market capitalization has been trading within a descending channel for 24 days and the $1.65 trillion support was retested on May 6. The drop to $1.65 trillion was followed by Bitcoin (BTC) reaching $35,550, its lowest price in 70 days.

In terms of performance, the aggregate market capitalization of all cryptocurrencies dropped 6% over the past seven days, but this modest correction in the overall market does not represent some mid-capitalization altcoins which managed to lose 19% or more in the same time frame.
As expected, altcoins suffered the most
In the last seven days, Bitcoin price dropped 6% and Ether (ETH) declined by 3.5%. Meanwhile, altcoins experienced what can only be described as a bloodbath. Below are the top gainers and losers among the 80 largest cryptocurrencies by market capitalization.
Tron (TRX) rallied 26.9% after TRON DAO rolled out a USDD, a decentralized stablecoin, on May 5. The algorithmic stablecoin is connected to the Ethereum and BNB Chain through the BTTC cross-chain protocol.
1inch (1INCH) gained 5.6% after the decentralized exchange governance application became Polygon’s network leader by completing 6 million swaps on the network.
STEPN (GMT), the native token of the popular move-to-earn lifestyle app, declined 35.7%, adjusting after a 70% rally between April 18 and April 28. A similar movement happened to Apecoin (APE) after the token pumped 94% between April 22 and April 28.
The Tether premium flipped negative on May 6
The OKX Tether (USDT) premium gauges China-based retail demand and it measures the difference between the China-based peer-to-peer trades and the United States dollar.
Excessive buying demand puts the indicator above fair value at 100%. On the other hand, Tether’s market offer is flooded during bearish markets, causing a 4% or higher discount.
The OKX Tether premium peaked at 1.7% on April 30, indicating some excess demand from retail. However, the metric reverted to a 0% premium over the next 5 days.
More recently, in the early hours of May 6, the OKX Tether premium flipped to -1% negative. Data shows retail sentiment worsened as Bitcoin moved below $37,000.
Futures markets show mixed sentiment
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.
As shown above, the accumulated seven-day funding rate is slightly positive for Bitcoin and Ether. Data indicates slightly higher demand from longs (buyers), but nothing that would force traders to close their positions. For instance, a positive 0.15% weekly rate equals 0.6% per month, thus unlikely to cause harm.
On the other hand, altcoins’ 7-day perpetual futures funding rate was -0.30%. This rate is equivalent to 1.2% per month and indicates higher demand from shorts (sellers).
Signs of weak retail demand as indicated by OKX Tether data and the negative funding rate on altcoins are a signal that traders are unwilling to buy at the critical $1.65 trillion crypto market capitalization. Buyers seem to be waiting for further dips before stepping in, so further price corrections will likely follow.
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