Will Altcoins Continue to Underperform Bitcoin After FOMC?

Since the beginning of 2025, the altcoin market has largely underperformed Bitcoin, and experts believe that a similar scenario could continue after yesterday’s FOMC meeting, where Fed Chair Jerome Powell decided to keep interest rates unchanged at 4.25-4.5%. In this scenario, Bitcoin (BTC) is likely to continue to gain strength, extending its market dominance further.

How Will Altcoins Perform From Here?

At the FOMC meeting on May 7, Fed Chair Jerome Powell announced keeping interest rates unchanged, in line with the market expectations. However, the broader crypto market has reacted positively to this, with altcoins showing strength. Ethereum (ETH) price is up 6%, moving to $1945 levels after a successful Pectra upgrade implementation on mainnet. Other digital assets are also showing modest 3-5% gains.

However, market analysts are not confident whether this momentum could continue for the next altseason. The altcoin market has shown a stark contrast to Bitcoin’s performance, with the top 140 tokens averaging a 58% decline since their peak on December 7, 2024, while Bitcoin has remained relatively stable, down only 3%. On the other hand, the Bitcoin dominance has surged from 49% to now at 65%, in the overall crypto market.

Bitcoin Dominance Grows Amid Tightening Macro Conditions

Renowned crypto analyst Benjamin Cowen has also issued a cautious outlook for altcoins relative to Bitcoin, forecasting continued declines in altcoin-to-Bitcoin (ALT/BTC) pairs as quantitative tightening (QT) persists.

Cowen projected that Bitcoin dominance could soon rise to 66%, reflecting a potential shift in market capital toward Bitcoin at the expense of alts. “ALT/BTC pairs are likely to drop to 0.32 from their current level of 0.34, with an eventual target of 0.25,” Cowen stated.

Thus, amid the tightening macro conditions, Bitcoin turns out to be a preferred asset for trading among investors. Another crypto analyst, Rekt Capital, mentions that Bitcoin dominance is approaching a critical resistance level, expecting it to surge to 71%, before the altseason begins.

Traders are keeping a close eye on Bitcoin dominance as it edges closer to this pivotal level. It will be interesting to see whether alts can continue with this rally ahead.