On Aug. 27, on-chain analytics provider Santiment reported that Bitcoin’s recent “mild” price drop was enough to cause a larger decline in total open interest on exchanges.
However, OI for Ethereum and Solana has barely declined, it added.
Open interest is a measure of the number or value of crypto derivatives contracts that have yet to be settled and remain open. It can also be used to gauge market sentiment for spot markets.
Capital Rotation?
Santiment made a few observations based on the OI changes. It stated that there is a “shifting focus to altcoins” as traders see increasing potential in ETH, SOL, and other recoveries since the market crash earlier this month.
Since the Aug. 5 dump, Ethereum has reclaimed around 23 of value, while Solana has recovered 45. Other altcoins, especially artificial intelligence-based ones, have surged even higher, with many jumping to pre-flush-out levels.
It also noted that the minor drop for BTC:
“Maybe a signal that a rotation of capital from Bitcoin into altcoins is occurring from large traders, who are diversifying risk and seeking higher returns.”
However, most of the altcoins have fallen by similar amounts today.
