Bitcoin Dominance Surges Past 61% Amid Declining Crypto Trading Volume
In a sign of shifting market dynamics, Bitcoin’s dominance in the cryptocurrency market has reached 61.2% as overall trading volumes continue to decline, pointing to potential trader exhaustion and weakening market momentum.
Data from financial services platform Matrixport shows that from its cycle low of 54% in December, Bitcoin’s proportion of the global cryptocurrency market capitalization has climbed noticeably. With total market value declining by almost $900 billion (25%) since early February, this increase in dominance coincides with a significant decline in the wider crypto market.
From a yearly high of $420 billion to roughly $163 billion on March 12, daily trade activity across cryptocurrencies has dropped 63% since February, according industry analytics company Santiment reported on March 13. Data from CoinMarketCap supports this trend with a 52% drop in trading activity.
“When trading volume for major cryptocurrencies consistently drops, even during slight price recoveries, it usually points toward declining trader enthusiasm,” Santiment said, noting that present trader behavior “indicates a mix of exhaustion, hopelessness, and capitulation.”
Why the Downturn in Crypto Markets?
The downturn coincides with more general macroeconomic issues including growing global trade tensions and recession concerns in the United States. Notwithstanding these obstacles, Bitcoin BTC/USD has outperformed other cryptocurrencies; its price has dropped around 20% since the Federal Reserve decided to keep interest rates same on January 29. At present, Bitcoin trades above $83,000, much below its December all-time high of more over $109,000.
Following stronger-than-expected U.S. job data that refocused attention toward a possibly more hawkish Federal Reserve, market analysts believe the brief currency surge started with Donald Trump’s election victory in November waned by early December.
Given February’s Consumer Price Index came in lower than predicted at 2.8%, indicating the first drop in both headline and core CPI since July 2024, the most recent inflation figures should provide some respite. CME Group data indicates that market expectations point to the Federal Reserve keeping current interest rates at its forthcoming March conference.
Reflecting continuous investor concern in the cryptocurrency market, the Crypto Fear & Greed Index stays in “fear” area and has been thus since February 21.
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