On-chain data from Glassnode shows market participants averting risk and seeking shelter in stablecoins and Bitcoin as the crypto market nears a decisive move. The analysis of Uniswap and futures trading volumes reveals that the uptrend that started in the first quarter of 2023 began to slow down in April, with regulatory concerns and a lack of liquidity promoting risk-off tendencies among traders.
Although it may seem that memecoins caused a surge in Uniswap’s trading volume, deeper inspection of Uniswap’s pools reveals that the majority of volume was for top cryptocurrencies in Wrapped BTC, ETH, and stablecoins. In addition, sandwich attacks and bot trading accounted for a significant amount of this trading activity. The futures trading volumes for Ethereum on centralized exchanges contracted in May, with 30-day average trading volumes dropping to $12 billion per day against a yearly average of $21.5 billion.
The market share for Bitcoin perpetuals versus their Ethereum counterparts shows a huge discrepancy, with 65.5% dominance for Bitcoin. In 2022, the two assets had equal shares in the perpetual swap space. However, the trend has shifted significantly in the last year.
The current crypto market trends demonstrate capital rotation happening away from high-risk altcoins toward low-risk assets like stablecoins and Bitcoin. Bitcoin’s dominance percentage over the crypto market, which measures the share of Bitcoin’s market capitalization in the total crypto valuation, experienced an uptrend in 2023 before encountering resistance at the 48.35% level. This resistance could lead to an altcoin rally relative to Bitcoin if buyers are unable to break out above it.
On the other hand, the market capitalization of cryptocurrencies excluding Bitcoin is bound by a bearish descending triangle pattern with lower highs and a parallel support level of $433.39 billion. The selling would likely accelerate below this level. If buyers push higher by building support above the parallel resistance at $616.35 billion by weekly closing, altcoins could continue to head higher over the next few weeks.
It is important to note that this article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of others. This article does not contain investment advice or recommendations; every investment and trading move involves risk, and readers should conduct their own research when making a decision.