Key Takeaways:
Bitcoin rebounded above $107K after a volatile weekend sparked by Middle East tensions.
Ethereum lagged behind, while BTC dominance remained high at ~66%.
Altseason remains elusive as capital fails to rotate into smaller altcoins.
Trump’s criticism of Fed Chair Powell pressured the US dollar, contributing to crypto strength.
Analysts eye rate cuts and macro liquidity as potential catalysts ahead.
Crypto Markets Stabilize After Middle East Tensions; Bitcoin Outperforms Ethereum
Cryptocurrency markets faced sharp weekend volatility as geopolitical tensions flared between Iran and Israel, sending Bitcoin as low as $98,000. However, by midweek, BTC had reclaimed key support and now trades above $107,000, highlighting its resilience amid global uncertainty. Ethereum followed a similar trajectory but showed deeper downside and a weaker recovery.
According to Binance Research, Bitcoin dropped 8.5% from Saturday to Monday before rebounding strongly, while Ethereum fell 17% before partially recovering. Despite the volatility, Bitcoin’s market dominance remained elevated, closing the week at approximately 66%.
A BlackRock study cited by Binance Research noted Bitcoin’s historic strength after geopolitical events, averaging a 37% gain in the 60 days that follow. Whether this trend continues depends on macro conditions, including inflation, liquidity, and investor sentiment.
Altcoin Season Delayed as Token Supply Dilutes Market Rotation
Despite Bitcoin’s recovery and a broader market rebound, altcoins have yet to experience a decisive breakout. Analysts point to a key structural shift: while Bitcoin wealth typically spills into altcoins during consolidation phases, the current cycle is diluted by a flood of new tokens and lack of fresh narratives.
Data from Dune Analytics shows the number of unique crypto tokens has surged nearly 10x over the past three years across eight major blockchains. This oversupply may be stalling capital rotation, weakening the typical “rising tide lifts all boats” phenomenon seen in previous bull runs.
Binance Research notes that unlike previous cycles driven by ICOs or DeFi innovations, the current market lacks a dominant theme. Concepts like meme coins, BitcoinFi, and DePIN are largely iterations of earlier trends. While AI has generated buzz, its real impact on crypto remains limited.
Trump-Fed Tensions Shake the Dollar, Support Crypto Rally
The U.S. Dollar Index (DXY) dropped to a three-year low after President Donald Trump publicly criticized Federal Reserve Chair Jerome Powell for not cutting rates. Trump hinted at replacing Powell before his term ends and is reportedly considering several candidates.
Fed officials remain split. While Powell adopted a cautious tone during testimony, Trump-appointed members Michelle Bowman and Christopher Waller suggested cuts could come as early as July. The mixed signals have triggered uncertainty in traditional markets but lent strength to crypto and risk assets.
As of Friday, U.S. 10-year Treasury yields had fallen to 4.27%, and the VIX volatility index dropped 20% to 16.8 — its lowest since February. These shifts have boosted sentiment across equities and crypto alike.
Bitcoin Cements Role as Macro Hedge, but Liquidity Eyes Are on Altcoins
With Bitcoin dominance holding strong and equities near all-time highs, the crypto market appears to be stabilizing. However, investors remain watchful for a potential altcoin breakout. Analysts suggest that without a strong narrative or unique catalyst, altseason may remain on hold.
Looking ahead, all eyes are on upcoming macro data, including inflation readings and central bank moves. Should monetary conditions ease further or ETF inflows persist, Bitcoin may continue to lead — but the broader altcoin market still needs a spark.
