December 13 may be remembered as the “Bloody Monday” after Bitcoin (Bitcoin) The price lost the support of USD 47,000, and the price of altcoins dropped by 25% in a short period of time.

When this happened, analysts quickly inferred that Bitcoin’s 8.5% pullback was related to Federal Open Market Committee (FOMC) meeting, Starting on December 15th.

Investors worry that the Fed will eventually start to scale down. Simply put, it is to reduce the Fed’s bond repurchase program. The logic is that the current monetary policy revision will have a negative impact on riskier assets. Although it is impossible to determine such a hypothesis, as of December 12, Bitcoin’s year-to-date gains were 67%. Therefore, it makes sense for investors to collect these profits before market uncertainty, which may be related to the current correction in the BTC price.

Weekly performance of top cryptocurrencies on December 13. Source: Nomics

Bitcoin prices have fallen by 8.2% in the past week, but they have also outperformed the broader altcoin market. This is in stark contrast to the past 50 days, as the market share (dominance) of the leading cryptocurrency dropped from 47.5% to 42%. Since Bitcoin is less risky than altcoins, investors could have fled directly to Bitcoin.

Tether’s discount bottoms out to 4%

OKEx Tether (USDT) The premium or discount is based on the difference between China’s peer-to-peer (P2P) transactions and the official US dollar currency. Figures above 100% indicate excessive demand for cryptocurrency investment. On the other hand, a 5% discount usually indicates a lot of sales activity.

The point-to-point premium of OKEx USDT is relative to the U.S. dollar. Source: OKEx

The Tether indicator reached the bottom of 96% on December 13, which is slightly bearish, but the 10% drop in the total market value of cryptocurrencies is not worrying. However, it has been more than two months since this indicator has exceeded 100%, which shows the lack of excitement among Chinese traders.

To further prove that the price plunge on December 13 had little impact on investor sentiment, the total amount of liquidation within 24 hours was US$400 million.

The total amount cleared on the derivatives exchange on December 13. Source: Coinglass.com

More importantly, only $300 million long leveraged contracts were forcibly terminated due to insufficient margin. This figure is insignificant compared to the crash on December 3, when leveraged buyers of $2.1 billion closed their positions.

There is currently no excessive demand for Bitcoin shorts

To further prove that the structure of the crypto market is not strongly affected by the sharp drop in prices, traders should analyze perpetual contracts. These contracts have built-in interest rates, and fees are usually charged every eight hours to balance the risks of the exchange.

A positive funding rate indicates that longs (buyers) need more leverage. However, when the short (seller) needs additional leverage, the opposite will happen, which will cause the funding interest rate to turn negative.

Bitcoin Perpetual Futures 8-hour financing interest rate. Source: Coinglass

Considering that most cryptocurrencies suffered considerable losses on December 13, the overall market structure remained sound. If there is too much short demand to bet that the price of Bitcoin falls below $46,000, the eight-hour perpetual futures funds will be less than 0.05%.

Tether’s 4% discount in the Chinese market, $300 million in long contract settlements and neutral financing rates are not signs of a bear market. Unless these fundamentals change significantly, there is no reason to demand a Bitcoin price of $42,000 or less.

The views and opinions expressed here only represent author It does not necessarily reflect the views of Cointelegraph. Every investment and transaction involves risks. When making a decision, you should conduct your own research.