Bitcoin’s dominance of the crypto market has been on the rise. This naturally comes with every downtrend in the market because although bitcoin takes a hit, the altcoins always record the worse losses, leaving them with less dominance of the market. Bitcoin’s dominance has however not stopped here. It has now spilled onto the derivatives market where the dominance of the pioneer cryptocurrency is even more apparent.
Bitcoin Open Interest Surges
The general open interest in the crypto market has been on a decline since the market took a hit in December. This is currently sitting at about $25 billion for the total market, down almost 50% from its peak in November at around $48 billion. This mirrors what has taken place in the crypto market over the same time period. However, when it comes to open interest, bitcoin has not fared as badly as the others.
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The digital asset now accounts for the majority of the global open interest in the crypto market. Bitcoin alone makes up 63% of all open interest in the market, meaning that the cryptocurrency commands more than $15 billion in open interest.
It is a step up from the month of April when Bitcoin’s open interest dominance had declined to 50%. With the recent increase in dominance, indicators point to a decrease in speculative interest when it comes to altcoins given their recent decline.
BTC dominates global open interest | Source: Arcane Research
This follows the general trend of the crypto market where bitcoin’s dominance has also grown, although by a smaller margin. If altcoins continue to perform badly, then BTC dominance may continue to rise over the next few weeks.
BTC Is Still King
Through the month of May, the losses in the crypto market have been apparent but some have provided more cover than others. Comparing the losses incurred by all the indexes for the month of May, bitcoin has proven to be the most effective investment.
All of the indexes had recorded double-digit growth for the red month. However, bitcoin had only seen 18% losses while all the other indexes saw losses above 20%. The Small Cap Index as always took the largest hit in the market with 33% losses. As for the Mid and Large Cap Indexes, the losses came out to 28% and 24% respectively.
BTC recovers above $31,000 | Source: BTCUSD on TradingView.com
The decline in the altcoins has triggered a rise in the bitcoin dominance. BTC’s dominance had been resting at 42.5% at the beginning of May and by the end of the month had risen and peaked as high as 46%, the highest it had been in six months.
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As the market ushers in a new month, it is unclear whether this dominance will continue. Given that the market has begun to recover, the altcoins may quickly reclaim what dominance they had lost to bitcoin in the last month.
Featured image from Yahoo! Sports, charts from Arcane Research and TradingView.com
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