Bitcoin Dominance Holds at 59% as Crypto Markets Shift Toward Protective Structures

Crypto markets have entered 2026 with lower leverage and more disciplined risk positioning following last year's deleveraging event, according to a report from Coinbase and on-chain analytics firm Glassnode.

The Q1 Market Outlook Report, published on January 27, found that Bitcoin retained its structural leadership as its dominance held near 59%, even while mid- and small-cap assets failed to sustain gains from earlier rallies.

The report noted a shift in market positioning, with options open interest now exceeding perpetual futures following October's deleveraging event. Positions have shifted toward protective structures as participants hedge against further downside rather than exiting risk entirely.

Ethereum appears to be approaching the later stages of its current performance cycle, which began from June 2022 lows, according to the report. Structural changes to Ethereum's ecosystem, including fee compression on Layer 2s and evolving network economics, have diluted the predictive power of traditional cycle frameworks.