Due to the high volatility that affected the cryptocurrency market, investors started to exit their positions on altcoins. Compared to bitcoin, the fall in these assets was more brutal. On the other hand, altcoins have become the top performing asset on the recovering chain due to the rising tide. This has prompted investors to rush back into these assets.
Altcoins Show More Gains
It has been known that altcoins tend to perform poorly in any market. Similar to how they do when it comes to bringing losses, they also have the same trait when it comes to making a profit. That is why investors have clamored for them to take advantage of the gains.
Altcoins have been performing well during August, and the Small Cap Index is starting to show signs of life. During the last 10 days, the index has gained 9%. That is a huge boost for the index, which had suffered greatly during the previous downtrend.
The Small Cap Index closely follows the Mid Cap Index. Although it did not perform as well as its smaller counterpart, it gained 7% during the period. It also exhibited similar performance to the Large Cap Index.
The positive signs for the market are the increasing number of investors who believe that the market is starting to turn around. That is because the increasing number of people exposed to altcoins is causing prices to surge.
Bitcoin Follows Positive Trend
In addition to cryptocurrencies, other digital assets also experienced positive growth during the first week of August. Although the sentiment in the market has been positive, different digital assets have experienced varying degrees of impact.
Although Bitcoin experienced lesser gains than its altcoin competitors, it still managed to gain 2%. That is still considered to be the lowest return among the major digital assets so far. Despite this, it is still considered the market leader in market dominance. In the past two months, it has lost around 7%.
The shift in the market’s focus from bitcoin to altcoins has shown that investors are no longer satisfied with digital asset safety. They are now focusing on other cryptocurrencies. This move has also affected the market dominance of stablecoins.
The dominance of ETH increased by 0.89% during the week ended August 2. On the other hand, Bitcoin lost between 0.12% and 0.96%. This new hunger for risk could be rewarded or cause investors to get burned if the market goes back.
Neutral to Bearish Sentiments Evident in Bitcoin Derivatives Metrics
The number of long positions in Bitcoin decreased on June 1. This move is not surprising, given that the asset has been down 51% in the past year. However, the 2% reading is not overly worrying.
Aside from the price, other factors such as the delta skew are also considered when analyzing Bitcoin options markets. This indicator suggests that market makers and arbitrageurs are overcharging for protection.
The bullishness of the delta skew indicator is indicated by the number of long positions afraid that the price will crash. However, generalized excitement is seen in the negative 12%.
The data shows that the delta skew indicator has fluctuated between 3% and 5% since August 5, which is considered a neutral area. Although options traders might not be as excited about the current market price, they have started to abandon their fear-based strategies.
Despite the lack of buying interest in Bitcoin, the asset’s ascending channel pattern suggests that the lack of demand is not a major issue. Although there are some signs of skepticism in the derivatives markets, the path to a potential $29,000 price is still clear if employment and inflation remain stable.