Bitcoin dominates the derivatives market to end May on a high note


Bitcoin’s dominance in the crypto market has been on the rise. This naturally comes with every downtrend in the market because even though Bitcoin takes a hit, altcoins always post the worst losses, leaving them with less market dominance. However, the dominance of Bitcoin has not stopped here. It has now spread to the derivatives market, where the dominance of the pioneering cryptocurrency is even more apparent.

Bitcoin Open Interest Surge

Overall open interest in the crypto market has fallen since the market took a hit in December. Currently, it stands at around $25 billion for the total market, down almost 50% from its peak in November at around $48 billion. This mirrors what has transpired in the crypto market over the same period of time. However, when it comes to open interest, bitcoin hasn’t fared as badly as the others.

Related Reading | Bitcoin Exchange Outflows Suggest Investors Are Starting to Hoard

The digital asset now accounts for the majority of global open interest in the crypto market. Bitcoin alone accounts for 63% of all open interest in the market, meaning the cryptocurrency generates over $15 billion in open interest.

It’s a step up from the month of April, when Bitcoin’s open interest dominance had dropped to 50%. With the recent rise in dominance, indicators point to a decline in speculative interest when it comes to altcoins due to their recent decline.

bitcoin open interest domain

BTC dominates global open interest | Source: Arcane Research

This follows the general trend of the crypto market, where bitcoin dominance has also grown, albeit by a smaller margin. If altcoins continue to perform poorly, then BTC dominance may continue to rise in the coming weeks.

BTC is still king

During the month of May, the losses in the crypto market have been evident, but some have provided more coverage than others. Comparing the losses suffered by all indices during the month of May, bitcoin has proven to be the most effective investment.

All indices had posted double-digit growth for the red month. However, bitcoin had only seen 18% losses, while all other indices saw losses greater than 20%. The small-cap index, as usual, took the biggest hit in the market with losses of 33%. For the mid-cap and large-cap indices, the losses were 28% and 24%, respectively.

Bitcoin price chart from TradingView.com

BTC recovers above $31,000 | Source: BTCUSD on TradingView.com

The decline in altcoins has caused a rise in bitcoin dominance. BTC dominance had been resting at 42.5% in early May and by the end of the month it had risen and peaked at 46%, the highest in six months.

Related Reading | Billionaire Tim Draper Talks What Will Trigger the Next Bitcoin Bull Market

As the market ushers in a new month, it is unclear if this dominance will continue. As the market has started to recover, altcoins can quickly regain the dominance they had lost to bitcoin in the past month.

Featured image from Yahoo! Sports, charts from Arcane Research and TradingView.com

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