Bitcoin Strengthens Market Position as Altcoin Struggles Persist

Bitcoin Strengthens Its Lead in the Crypto Market

Bitcoin ’s market dominance has risen to 61% amid shrinking liquidity in the broader cryptocurrency space. Matrixport suggests that the Federal Reserve’s hawkish stance, coupled with a strong U.S. job market, has influenced this shift.

Higher employment figures indicate economic strength, raising the likelihood of prolonged high interest rates. With borrowing becoming more expensive and liquidity drying up, investors have rotated out of altcoins and into Bitcoin, reinforcing its status as the go-to asset in turbulent macroeconomic conditions.

Altcoins Lose Ground as Bitcoin Recovers Market Share

According to Matrixport data, Bitcoin held 60.3% market dominance on November 5 before dropping to 53.9% by December 9, as altcoins experienced a brief surge following the U.S. elections. However, this uptick was short-lived, with Bitcoin reclaiming lost ground as investors adapted to economic realities.

Crypto Market Shrinks by $900 Billion

The overall cryptocurrency market has taken a significant hit. In December, total market capitalization peaked at $3.8 trillion, with Bitcoin holding a 53% share. By early March, this figure had plummeted by $900 billion to roughly $2.9 trillion, marking a decline in liquidity, particularly for altcoins.

Despite the downturn, Bitcoin has remained more resilient than other assets. Over the last month, BTC has dropped 24% from its January peak of $109,000, ETH has declined to $1,895, and SOL has suffered a steep 39% loss.

Federal Reserve Policy and Bitcoin’s Trajectory

The Fed’s monetary policy remains a key factor in Bitcoin’s price action. Analysts caution that liquidity issues will continue to restrict Bitcoin’s ability to make rapid gains. While Bitcoin has demonstrated resilience, sustained growth will depend on how Fed policies evolve and impact market liquidity.

Bitcoin’s dominance is likely to persist in this recalibrating market, with its future performance tied closely to shifts in investor sentiment and interest rate expectations.

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