On Tuesday, Bitcoin’s (BTC) hold over the crypto market was strengthened, as its dominance rose to a new four-year high. This surge occurred while crypto traders redirected their capital into the leading asset ahead of the upcoming Federal Reserve policy meeting scheduled for tomorrow.
A holding pattern has settled over the crypto markets, as capital rotation out of altcoins has driven Bitcoin’s market share to its highest level in four years.
Bitcoin (BTC) was maintained within the $94,000–$95,000 range, showing a slight 0.4% increase over the past 24 hours, while continuing the narrow trading pattern that has been observed since the weekend.
At the same time, a 0.7% decline was recorded in the broad-market index, influenced by downward pressure from Ethereum’s ether (ETH) and the native tokens of Sui (SUI), Aptos (APT), and Polygon (POL), which contributed to the benchmark’s dip.
An overview of traditional markets revealed consecutive losses in equities, as both the S&P 500 and the tech-focused Nasdaq ended the session down by approximately 0.7% to 0.8%, once again falling short in performance compared to Bitcoin (BTC).
Although significant price movements have remained absent, attention has been steadily shifting toward Bitcoin’s expanding portion of the total crypto market. The Bitcoin Dominance metric has surpassed 65%, marking its highest level since January 2021, according to data from TradingView. This indicates that capital is being consolidated into the asset regarded as the most resilient amid ongoing macroeconomic uncertainty.
The present market environment has been characterized as one of pause and anticipation by Joel Kruger, a market strategist at LMAX Group. He observed that “the cryptocurrency market has largely stayed stagnant since the weekly open, with prices entering a holding phase as market participants await a significant catalyst.” According to him, “this driving force could emerge from traditional markets, influenced either by developments related to tariff-induced economic effects or by the upcoming Federal Reserve FOMC decision scheduled for May 7.”
According to the CME FedWatch Tool, interest rates are widely anticipated to be kept unchanged by the Federal Reserve. However, traders remain cautious, closely watching for any change in the tone of Fed Chair Jerome Powell that could influence market risk sentiment.
Bitcoin Braces for Impending Volatility Surge
With Bitcoin’s recent price movement remaining notably flat, the upcoming FOMC meeting “is poised to trigger significant volatility,” according to Vetle Lunde, head of research at K33. In a report released on Tuesday, it was pointed out by Lunde that Bitcoin’s short-term volatility is “exceptionally compressed,” with the 7-day average reaching its lowest point in 563 days last week.
Lunde noted that “such periods of low volatility in BTC are typically short in duration.” He explained that “sharp bursts of volatility usually follow this kind of stability once price movement begins, as leveraged positions are forced to unwind and market participants are drawn back into trading activity.”
It was stated by Lunde that a major downward cascade appears unlikely, given that funding rates for perpetual swaps have remained consistently negative. He further noted that comparable conditions in the past have often presented favorable entry points for medium- to long-term investors, and expressed a preference for “aggressive spot exposure” moving forward.
 hold over the crypto market was strengthened, as its dominance rose to a new four-year high. This surge occurred while crypto traders redirected their capital into the leading asset ahead of the upcoming Federal Reserve policy meeting scheduled for tomorrow.){kind=link}