Bitcoin’s dominance in the cryptocurrency market has been on the rise. This naturally comes with every downtrend in the market because even though bitcoin is taking a hit, altcoins are always posting the worst losses, making them less dominant in the market. However, the dominance of Bitcoin did not stop here. It has now extended to the derivatives market where the dominance of the leading cryptocurrency is more evident.
Bitcoin open interest surges
Public open interest in the cryptocurrency market has been declining since the market took a hit in December. That’s currently about $25 billion for the overall market, down about 50% from its November peak of about $48 billion. This reflects what happened in the crypto market during the same time period. However, when it comes to open interest, bitcoin has not performed as badly as the others.
Related reading | Bitcoin outflows indicate that investors are starting to accumulate
Digital asset now accounts for the majority of open global interest in the crypto market. Bitcoin alone accounts for 63% of all open interest in the market, which means that the cryptocurrency requires more than $15 billion in open interest.
It’s a move up from April when open interest dominance in Bitcoin dropped to 50%. With the recent increase in dominance, indications are that speculative interest has decreased when it comes to altcoins due to its recent decline.
BTC dominates global open interest | Source: Arcane Research
This follows the general trend of the cryptocurrency market where Bitcoin dominance has also grown, albeit by a smaller margin. If altcoins continue to do poorly, BTC’s dominance may continue to rise over the next few weeks.
BTC is still king
During the month of May, losses in the cryptocurrency market were evident, but some provided more coverage than others. Comparing the losses incurred by all indicators for the month of May, Bitcoin has proven to be the most effective investment.
All indicators recorded double-digit growth for the red month. However, Bitcoin saw only 18% losses while all other indicators saw losses above 20%. The small cap index as always took the biggest hit in the market with losses of 33%. As for the medium and large index, the losses were 28% and 24%, respectively.
BTC recovers above $31,000 | Source: BTCUSD on TradingView.com
The decline in altcoins led to a rise in the dominance of bitcoin. BTC’s dominance was stabilizing at 42.5% at the beginning of May and by the end of the month it surged and peaked at 46%, the highest it has been in six months.
Related reading | Billionaire Tim Draper on What Will Lead to the Next Bitcoin Bull Market
As the market enters a new month, it is unclear whether this dominance will continue. Given that the market has begun to recover, altcoins may quickly regain the dominance they lost to Bitcoin last month.
Featured image from Yahoo! Sports, charts from Arcane Research and TradingView.com
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