"ETFs have seen net outflows, layer 1 activity has fallen or stagnated, and funding rates remain very low," analysts led by David Glass wrote. Funding rates are the difference between price of the perpetual futures and the spot price of digital assets. A positive funding rate indicates that perpetuals are trading at a premium to the spot price, indicating increased demand for bullish bets.
The cryptocurrency market has continued to underperform other risk assets amid weakening demand, and is expected to stay highly correlated with equities, Citi (C) said in a research report on Friday.
Recent weakness in digital assets has resulted in lower energy consumption by bitcoin (BTC) miners and "weaker production cost model outputs," the report said. Meanwhile, the market cap for stablecoin continues to grow, shrugging off the recent market weakness.
Looking forward, the bank said it expects the crypto market to remain highly correlated with equities amid the upcoming macro calendar, which kicks off with today's Nonfarm Payrolls report.
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