Bitcoinâs (BTC) dominance has crested new highs as altcoinsâ short-lived rally fizzles, according to data from Matrixport, a cryptocurrency financial services platform.Â
As of March 12, Bitcoin dominance â a measure of Bitcoinâs share of cryptoâs overall market capitalization â stands at 61.2%, according to Matrixport. This is up from a cycle low of around 54% in December.Â
Rising BTC dominance is âclear evidence that the altcoin rally was short-lived,â Matrixport said in a post on the X platform.Â
âIt lasted barely a month, from [US President Donald] Trumpâs election in November to early December, when a stronger-than-expected U.S. jobs report shifted market focus toward a more hawkish Federal Reserve,â Matrixport said.Â
Bitcoinâs dominance typically wanes near the end of market cycles as capital rotates into altcoins â digital assets besides Bitcoin.Â
Bitcoin dominance is back. Source: Matrixport
Related: Bitcoin battles US sellers as CPI inflation sees first drop since mid-2024
Eyeing interest rates
In January, the US Federal Reserve opted to hold interest rates steady instead of starting another round of cuts, citing healthy US jobs data.Â
The Fedâs hawkish tone dealt a blow to stocks and cryptocurrencies. Bitcoinâs spot price has dropped approximately 20% since the central bankâs Jan. 29 announcement. As of March 12, Bitcoin trades at roughly $82,750. It hit an all-time high of more than $109,000 in December.Â
Altcoins are even more sensitive to macroeconomic volatility than Bitcoin. âSavvy traders have rotated out of altcoins and into Bitcoin, which, despite its own decline, has significantly outperformed the broader crypto market,â Matrixport said.Â
The next leg of Bitcoinâs rally depends largely on whether the Fed opts to hike interest rates to stave off inflation, Matrixport noted.Â
On March 12, the February Consumer Price Index â a measure of US inflation â came in lower than expected at around 2.8%.Â
âThis marks the first decline in both Headline and Core CPI since July 2024,â The Kobeissi Letter said in an X post. âInflation is cooling down in the US.â
Data from the CME Group, a US derivatives exchange, indicates that markets overwhelmingly expect the Fed to hold rates steady at its next meeting in March.
Magazine: Ethereum L2s will be interoperable âwithin monthsâ: Complete guide