Bitcoin Dominance Sets New High

The dominance of Bitcoin in the crypto market has reached new highs as the recent altcoin rally fades, according to data from Matrixport, a cryptocurrency financial services platform.

As of March 12, Bitcoin dominance—measuring Bitcoin’s share of the total crypto market capitalization—stands at 61.2%, up from a cycle low of around 54% in December, according to Matrixport.

Rising Bitcoin dominance is “clear evidence that the altcoin rally was short-lived,” the platform stated in a post on X.

“It lasted barely a month, from [US President Donald] Trump’s election in November to early December, when a stronger-than-expected U.S. jobs report shifted market focus toward a more hawkish Federal Reserve,” Matrixport said.

Historically, Bitcoin’s dominance tends to decline at the end of market cycles as capital shifts into altcoins.

In January, the US Federal Reserve chose to keep interest rates unchanged instead of initiating a new round of cuts, citing strong US job market data.

The Fed’s hawkish stance negatively impacted both stocks and cryptocurrencies.

Since the central bank’s Jan. 29 announcement, Bitcoin’s price has dropped by approximately 20%.

As of March 12, Bitcoin is trading at around $82,750, down from its all-time high of over $109,000 in December.

Altcoins tend to be even more vulnerable to macroeconomic shifts than Bitcoin.

“Savvy traders have rotated out of altcoins and into Bitcoin, which, despite its own decline, has significantly outperformed the broader crypto market,” Matrixport noted.

The future of Bitcoin’s rally largely depends on whether the Federal Reserve decides to raise interest rates to combat inflation, Matrixport stated.

On March 12, the February Consumer Price Index (CPI), a key measure of US inflation, came in lower than expected at around 2.8%.

“This marks the first decline in both Headline and Core CPI since July 2024,” The Kobeissi Letter said in a post on X. “Inflation is cooling down in the US.”

Data from the CME Group, a US derivatives exchange, suggests that markets widely expect the Fed to maintain current interest rates at its next meeting in March.

Sources:

https://cointelegraph.com/news/bitcoin-dominance-reaches-new-highs-alts-fade

https://x.com/Matrixport_EN/status/1899716912151744554/photo/1

https://x.com/KobeissiLetter/status/1899800273775657058

https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html