Bitcoin’s dominance in the cryptocurrency market has reached new heights, leaving altcoins in the dust. According to data from Matrixport, a cryptocurrency financial services platform, Bitcoin’s dominance currently stands at 61.2%, up from a low of 54% in December. This rise in dominance is a clear indication that the recent altcoin rally was short-lived.

The altcoin rally, which lasted barely a month from November to December, was fueled by the US presidential election and a stronger-than-expected US jobs report. However, the market focus shifted towards a more hawkish Federal Reserve, causing altcoins to fade and Bitcoin to regain its dominance.

This trend is not uncommon, as Bitcoin’s dominance typically wanes towards the end of market cycles as capital rotates into altcoins. However, this time, the rise in Bitcoin’s dominance is also due to its resilience in the face of macroeconomic volatility. The US Federal Reserve’s decision to hold interest rates steady in January dealt a blow to both stocks and cryptocurrencies. Bitcoin’s spot price has dropped approximately 20% since the central bank’s announcement, but it has still outperformed the broader crypto market.

Altcoins, on the other hand, are more sensitive to macroeconomic volatility and have seen a significant decline in value. This has led savvy traders to rotate out of altcoins and into Bitcoin, which has proven to be a more stable investment.

The next leg of Bitcoin’s rally will depend largely on the Fed’s decision to hike interest rates to combat inflation. The recent Consumer Price Index, which measures US inflation, came in lower than expected, indicating a cooling down of inflation. This has led to expectations that the Fed will hold rates steady at its next meeting in March.

In the meantime, the cryptocurrency market continues to be dominated by Bitcoin, with altcoins struggling to keep up. As the market awaits the Fed’s decision, all eyes are on Bitcoin and its potential for further growth. Will it continue to dominate the market, or will altcoins make a comeback? Only time will tell.