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

As of March 12, Bitcoin dominance — a measure of Bitcoin’s share of crypto’s overall market capitalization — stands at 61.2%, 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’s dominance typically wanes near the end of market cycles as capital rotates into altcoins — digital assets besides 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 Federal Reserve opted to hold interest rates steady instead of starting another round of cuts, citing healthy US jobs data. 

The Fed’s hawkish tone dealt a blow to stocks and cryptocurrencies. Bitcoin’s spot price has dropped approximately 20% since the central bank’s Jan. 29 announcement. As of March 12, Bitcoin trades at roughly $82,750. It hit an all-time high of more than $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 depends largely on whether the Fed opts to hike interest rates to stave off inflation, Matrixport noted. 

On March 12, the February 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 the CME Group, a US derivatives exchange, indicates that markets overwhelmingly expect the Fed to hold rates steady at its next meeting in March.

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