Crypto traders are shifting their focus to alternative cryptocurrencies as 2023 comes to a close, according to data tracked by Coinalyze. The dollar value locked in active futures contracts tied to bitcoin now represents only 38% of the market-wide notional futures open interest, which is the lowest it has been in at least two years.
Coinalyze suggests that “all” the money is now flowing into altcoins, explaining the decline in bitcoin’s dominance by open interest in futures. This data indicates a renewed risk appetite in the crypto market, a trend often observed after a significant uptrend in bitcoin.
Bitcoin, the leading cryptocurrency by market value, has experienced a surge of over 60% since October 1, reaching $43,100. This increase can be attributed to diminishing Treasury yields and expectations that the U.S. Securities and Exchange Commission (SEC) would soon approve one or more spot BTC exchange-traded funds (ETFs).
As of the time of writing, bitcoin has seen a year-to-date increase of 161%, while ether, the second-largest cryptocurrency, has risen by 88%. However, bitcoin’s dominance by open interest has declined from nearly 50% to 38% in just two months, according to Coinalyze data.
In late October, bitcoin’s dominance by futures open interest stood at nearly 50%, but it has now dropped to 48%. On the other hand, ether’s dominance has remained relatively stable at around 21%. Meanwhile, the share of altcoins has increased from 32% to 41%.
This shift in dominance and increased interest in altcoins suggests that traders are diversifying their portfolios and seeking opportunities beyond bitcoin. Altcoins, which refer to any cryptocurrency other than bitcoin, have gained traction as investors look for potentially higher profits.
The decline in bitcoin’s dominance by open interest in futures can be seen as a reflection of the evolving crypto market landscape. While bitcoin remains the most well-known and widely adopted cryptocurrency, traders are recognizing the potential of other digital assets.
It is important to note that this data and analysis come from Coinalyze, a prominent platform for tracking and analyzing cryptocurrency market trends. Coinalyze’s insights provide valuable information for traders and investors looking to navigate the ever-changing crypto landscape.
As the crypto market continues to evolve, it will be interesting to see how the balance of power between bitcoin and altcoins shifts. Traders will likely keep a close eye on market trends and adjust their strategies accordingly to capitalize on emerging opportunities.