Bitcoin’s (BTC) dominance has reached new heights as the short-lived rally of altcoins has waned, as per data from Matrixport, a financial services platform focused on cryptocurrency.
As of March 12, Bitcoin dominance—an indicator of Bitcoin’s proportion of the total cryptocurrency market capitalization—now sits at 61.2%, according to Matrixport. This marks an increase from a cycle low of approximately 54% in December.
The uptick in BTC dominance is “clear evidence that the altcoin rally was fleeting,” Matrixport mentioned in a post on the X platform.
“It lasted for just about a month, from [US President Donald] Trump’s election in November to early December, when a stronger-than-expected U.S. jobs report redirected market attention towards a more hawkish Federal Reserve,” Matrixport elaborated.
Typically, Bitcoin’s dominance diminishes toward the conclusion of market cycles as capital shifts into altcoins—digital assets other than Bitcoin.
Bitcoin dominance is back. Source: Matrixport
Related: Bitcoin faces US sellers as CPI inflation sees its first decline since mid-2024
Monitoring Interest Rates
In January, the US Federal Reserve decided to keep interest rates unchanged instead of initiating another series of cuts, citing robust US jobs data.
The Fed’s hawkish stance negatively impacted stocks and cryptocurrencies. Since the central bank’s announcement on January 29, Bitcoin’s spot price has fallen by approximately 20%. As of March 12, Bitcoin is trading at around $82,750, down from an all-time high exceeding $109,000 in December.
Altcoins react even more sensitively to macroeconomic fluctuations than Bitcoin. “Intelligent traders have shifted away from altcoins and into Bitcoin, which, despite its own downturn, has significantly outperformed the wider crypto market,” remarked Matrixport.
The next phase of Bitcoin’s rally largely hinges on whether the Fed decides to raise interest rates to combat inflation, as noted by Matrixport.
On March 12, the February Consumer Price Index—a metric for US inflation—was reported lower than anticipated at around 2.8%.
“This marks the first decrease in both Headline and Core CPI since July 2024,” stated The Kobeissi Letter in a post on X. “Inflation is on the decline in the US.”
Data from the CME Group, a US derivatives exchange, suggests that market expectations are heavily leaning towards the Fed maintaining steady rates at its next meeting in March.
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