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The Decline of Bitcoin Futures Dominance

The Decline of Bitcoin Futures Dominance:

  • The share of Bitcoin in the crypto futures market has dropped to 38%, its lowest point in two years.
  • Interest in altcoins is increasing, capturing a larger portion of the derivatives market.
  • This trend reflects a growing appetite for risk and diversification in the cryptocurrency market.

A Decline in Bitcoin (BTC) Derivatives Dominance

As we reach the end of 2023, the share of Bitcoin-related futures contracts on the market has experienced a significant decrease. The dominance of Bitcoin in the derivatives market has dropped to 38% of the total Open Interest, which represents the total value of active contracts (Long & Short) in the market, compared to nearly 50% two months ago.

In other words, of all the open positions in the market, only 38% are linked to Bitcoin.

It’s worth noting that this decline is the lowest proportion recorded in at least two years. Coinalyze data indicates that this decrease in Bitcoin dominance in futures contracts is a sign of a (temporary) shift in crypto traders’ preferences.

This development could be attributed to several factors, including the rise of Bitcoin since October and expectations surrounding the approval of Bitcoin-based exchange-traded funds (ETFs) by the SEC.

Altcoins on the Rise in the Market

Alongside the decline in Bitcoin’s share, altcoins have gained popularity. Their share in the derivatives market has increased, rising from 32% to 41%.

This clearly shows growing market interest in “alternative” cryptocurrencies, reflecting a diversification of trading strategies and an appetite for higher risk among investors. Ethereum maintains its position with a stable share of about 21%, while other altcoins, like Solana, are gaining significant ground.

As you can see, this marks a shift in the dynamics of the crypto futures market, where traders are now seeking opportunities beyond Bitcoin. However, it’s important to keep in mind that Bitcoin remains by far the cryptocurrency with the greatest impact on the entire cryptocurrency market.

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