The data shows that the altcoin index, which got off to a great start to 2023, recently rebounded sharply against Bitcoin.
Large- and small-cap altcoins have seen flat returns over the past month
According to Arcane Research’s latest weekly report, several alts have experienced a major short squeeze in recent days. “Altcoin Index” here refers to a group of coins grouped together on the basis of market capitalization criteria. The advantage of these indices is that they can be used to easily track the performance of various market sectors.
The three main indicators are small cap, mid cap and large cap. As the name already suggests, these each represent his three main sizes of altcoins.
Here’s a graph showing how these alternative indices performed against each other and against Bitcoin over the past 30 days.
Looks like the alts were deep inside negative territory not too long ago | Source: Arcane Research's Ahead of the Curve - January 10
As shown in the chart above, the past month has been largely flat for Bitcoin as it recorded just 1% of profits during this period. During this time, BTC hardly fell, staying almost near the 0% line. Altcoin indices, on the other hand, have strayed far from the flat curve, all dropping more than 5% in the middle of this period (coinciding with the end of 2022).
However, these coins are doing very well so far in 2023 and recovering from these losses. Large and mid-cap stocks will soon rebound in Bitcoin as the last 30 days return is currently 0%.
Small-caps were hit especially hard by the end of last year, so even a strong performance in 2023 wasn’t enough to erase the losses.
Still, there has been a noticeable recovery in all altcoin indices recently. “Essentially, the sharp rise seen in various altcoins last week was largely driven by illiquid markets and short-term structural pressure,” the report explains.
The chart below shows daily short-selling volume data for the crypto derivatives market over the past few months.
The value of the metric seems to have spiked in recent days | Source: Arcane Research's Ahead of the Curve - January 10
From the chart, it’s clear that short liquidation volumes weren’t as high in December, but we’ve seen consistent and frequent squeezes over the last few days.
At the time of writing, Bitcoin is trading around $17,300, up 3% over the past week.
The crypto has seen an overall uptrend in the last few days | Source: BTCUSD on TradingView
Kanchanara Featured Image on Unsplash.com, Chart on TradingView.com, Arcane Research