Bitcoin Gains Ground Amid Economic Shifts
Bitcoin ’s market share has climbed to 61%, marking a new high for this cycle. Analysts attribute this shift to the Federal Reserve’s firm monetary policies and an unexpectedly strong U.S. labor market.
With interest rates expected to remain elevated for longer, investors have been pulling out of altcoins and turning to Bitcoin. Higher borrowing costs and tighter liquidity have made Bitcoin the preferred asset in an uncertain economic environment.
Altcoins Lose Traction After Initial Post-Election Gains
Matrixport data shows that Bitcoin’s dominance was 60.3% on November 5 before declining to 53.9% by December 9, as altcoins briefly outperformed. However, this shift was short-lived, and Bitcoin has since regained its position as investors reassess market risks.
Crypto Market Value Drops by $900 Billion
The cryptocurrency sector has seen a sharp contraction. In December, the total market valuation peaked at $3.8 trillion, with it making up 53% of the share. By early March, this value had dropped by $900 billion to $2.9 trillion, reflecting declining liquidity across the industry.
Despite the downturn, Bitcoin remains more stable than many altcoins. Over the past month, Bitcoin has lost 24% from its January high of $109,000, Ethereum has declined to $1,895, and Solana has suffered a 39% drop.
Federal Reserve’s Influence on Bitcoin ’s Trajectory
Federal Reserve policies continue to impact Bitcoin’s price action. Analysts warn that liquidity constraints may limit Bitcoin’s near-term price gains. However, as it continues to hold a dominant position, its long-term outlook will depend on macroeconomic changes and investor sentiment.
Bitcoin’s dominance is expected to remain strong as the market adapts to economic shifts and liquidity conditions.
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