Bitcoin’s (BTC) dominance has reached new peaks as altcoin gains quickly diminish, based on insights from a cryptocurrency financial services platform.
As of March 12, Bitcoin dominance — which reflects Bitcoin’s share of the total cryptocurrency market capitalization — has risen to 61.2%, a significant climb from a cycle low of approximately 54% in December.
The increase in BTC dominance indicates that the altcoin rally was brief and fleeting, as noted in a post on social media.
“It lasted for just about a month, from [US President Donald] Trump’s election in November through early December, when a stronger-than-anticipated U.S. jobs report redirected market attention toward a more hawkish Federal Reserve,” the platform highlighted.
Typically, Bitcoin’s dominance decreases towards the conclusion of market cycles as capital shifts towards altcoins — any digital assets other than Bitcoin.
Bitcoin dominance is on the rise again. Source: Source
Related: Bitcoin contends with U.S. sellers as CPI inflation experiences its first drop since mid-2024
Monitoring Interest Rates
In January, the U.S. Federal Reserve opted to keep interest rates unchanged rather than initiate another round of cuts, citing robust U.S. jobs data.
The Fed’s hawkish stance negatively impacted both stocks and cryptocurrencies. Bitcoin’s spot price has seen a reduction of about 20% since the central bank’s announcement on January 29. As of March 12, Bitcoin is trading around $82,750, compared to its all-time high of over $109,000 in December.
Altcoins are particularly vulnerable to macroeconomic fluctuations compared to Bitcoin. “Experienced traders have shifted their investments from altcoins to Bitcoin, which, despite its own decline, has notably outperformed the broader cryptocurrency market,” the platform stated.
The future trajectory of Bitcoin’s rally hinges largely on the Federal Reserve’s decisions regarding potential interest rate hikes to manage inflation, as per the platform.
On March 12, the February Consumer Price Index — an indicator of U.S. inflation — was reported lower than expected, at approximately 2.8%.
“This represents the first decrease in both Headline and Core CPI since July 2024,” noted another source on social media. “Inflation is subsiding in the U.S.”
Data from a major U.S. derivatives exchange indicates that there is a strong expectation among markets for the Fed to maintain current rates at its upcoming meeting in March.
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