Bitcoin’s market dominance has hit a four-year high as traders rotate back to BTC, with prices around $95,000. Meanwhile, major altcoins have dipped slightly and traditional stocks are struggling as well. Analysts warn of an impending volatility burst following the Federal Reserve meeting, with suggested aggressive spot exposure for investors in the current environment.
In recent days, the cryptocurrency market appears to be in a kind of limbo. Bitcoin (BTC), often seen as a stabilising force in the sector, is seeing its dominance rise sharply, hitting a four-year peak as many traders shift their focus back to it. It’s maintaining a price range around $95,000 while a number of major altcoins like Ethereum (ETH), Sui (SUI), and Aptos (APT) have experienced minor dips. Meanwhile, traditional stocks haven’t fared much better, facing consecutive losses.
In the latest updates, bitcoin is performing at around 0.6% higher than last day’s valuation, hanging steady since the weekend. In comparison, the CoinDesk 20 Index dipped by 0.3%, with significant low performance from major coins such as ETH and others. Stock indices, notably the S&P 500 and Nasdaq, both ended the day down by about 0.7% to 0.8%, struggling against BTC’s relatively stable performance.
A notable trend is the rise of Bitcoin’s market share, or dominance, now over 65%. This is the highest level we’ve seen since January 2021, a movement that suggests market participants are favouring bitcoin, which is generally viewed as a safer option amid the current economic uncertainty, as shown by the data from TradingView.
Market strategist Joel Kruger from LMAX Group highlights this moment of ‘pause and anticipation’ within cryptocurrency trading. He observed that since the start of the week, the market has been somewhat flat, waiting for what could be a major trigger, possibly related to the Federal Reserve’s upcoming meeting on May 7. This meeting may provide updates that could change the tide on issues like tariffs and interest rates.
The consensus is that the Federal Reserve is likely to keep interest rates steady during this upcoming meeting, according to insights from the CME FedWatch Tool. However, traders remain on high alert for any shifts in the language used by Fed Chair Jerome Powell, which could affect market risk perception.
Looking ahead, analysts like Vetle Lunde from K33 predict that bitcoin’s recent low price volatility is poised for a significant change. He remarked that because BTC’s short-term price has become so stable, a ‘volatility burst’ is likely on the way. Currently, the 7-day average volatility has dropped to its lowest point in over a year, being the least active for 563 days.
Lunde notes that periods of low volatility tend to be followed by sharp moves in price. When things finally stop being quiet, traders who are leveraged often get caught unprepared, leading to a flurry of activity. However, he suggests it’s unlikely to see a drastic drop in BTC’s price since the current environment for perpetual swaps remains consistently in the negative, hinting at a strong buying opportunity. As a result, Lunde advises crypto investors to consider “aggressive spot exposure” in anticipation of what’s to come.
Krisztian Sandor, a US markets reporter focused on stablecoins and tokenization among others, brings insights into these crypto dynamics. With a background in business and economic reporting from New York University, he has his eye on various cryptocurrencies, including BTC, SOL, and ETH.
