Bitcoin (BTC) dominance crests new highs as altcoins' short-lived rally fizzles

Bitcoin's (BTC) dominance has crested new highs as altcoins' short-lived rally fizzles, according to data from Matrixport, a cryptocurrency financial services platform.

Bitcoin (BTC) dominance has hit new highs as altcoins' brief rally fizzles, cryptocurrency financial services platform Matrixport said.

A measure of Bitcoin's share of crypto's overall market capitalization, BTC dominance now stands at 61.2%, as of March 12, according to Matrixport. This is up from a cycle low of around 54% in December.

Rising BTC dominance is "clear evidence that the altcoin rally was short-lived," Matrixport said in a post on the X platform.

"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.

Bitcoin dominance typically declines toward the end of market cycles as capital flows into altcoins — digital assets other than Bitcoin.

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 central bank opted to keep interest rates unchanged instead of starting another round of reductions, citing healthy US jobs data.

The Fed's hawkish tone dampened the outlook for stocks and cryptocurrencies. Bitcoin's spot price has dropped around 20% since the central bank's announcement on Jan. 29.

As of March 12, Bitcoin trades at roughly $82,750. It hit a record high of over $109,000 in December.

Altcoins are even more sensitive to macroeconomic volatility 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 said.

The next leg of Bitcoin's rally largely depends on whether the Fed opts to raise interest rates to keep inflation in check, Matrixport added.

On March 12, February's Consumer Price Index — a 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 an X post.

"Inflation is cooling down in the US."

Data from CME Group, a US derivatives exchange, shows that markets are largely expecting the Fed to keep rates unchanged at its next meeting.