According to BlockBeats, on May 9, Matrixport shared its weekly market report as follows: Over the past 18 months, global monetary policy has greatly changed the flow of capital into digital assets. With interest rates remaining high, traditional investors are beginning to reassess their risk allocations, making the Federal Reserve's policy communication particularly critical. The minutes from the November FOMC meeting, released on December 7, 2024, shattered market expectations of four rate cuts in 2025, lowering the expectation to two cuts.
On-chain data reveals the degree of market differentiation. Bitcoin's market dominance (measured as a percentage of the total market capitalization of the overall crypto market) has risen from 49% in the early ETF era to the current 64.5%, a level that has not been seen since the DeFi boom in 2021. This trend has brought the highest risk-adjusted returns among various core indicators of digital assets, reflecting a preference for quality assets.
Retail investor sentiment remains subdued, with trading volumes on CEX and DeFi protocols dropping to multi-year lows. Due to the lack of a clear market narrative—no new disruptive DeFi applications and a lack of significant breakthroughs in Layer-2 technology or widespread meme coin trends—retail investors generally choose to remain on the sidelines.
The summer in the Northern Hemisphere typically exacerbates this trend, as the vacation season leads to reduced trading activity. Since December 2024, discussions on social media regarding altcoins have decreased by more than 40%, while discussions related to Bitcoin remain strong, reflecting the market's ongoing interest in Bitcoin as a macro hedge asset. In the absence of significant catalysts, sentiment-driven rallies for altcoins are difficult to form.
Given that technical, macroeconomic, and market structure factors all negatively impact altcoins, the clearest current tactical position is to maintain a long position in Bitcoin through spot or perpetual futures, while using altcoin perpetual futures as a hedging tool. The funding rates for altcoin perpetual contracts remain low.
