The largest cryptocurrency, Bitcoin, is experiencing a decline in its price after a seven-month period of growth, dropping by 11% in the past month. This marks the first decrease since August 2023, bringing Bitcoin's trading price to $63,200.

Factors Contributing to Bitcoin's Price Drop

Various factors have influenced the recent decrease in Bitcoin's price. One main factor is the reduced demand for U.S.-based spot Bitcoin exchange-traded funds (ETFs) and the Federal Reserve's (Fed) indication of not lowering interest rates. Additionally, a shift away from risk in broader financial markets has also impacted Bitcoin's bullish trend this month.

Despite these challenges, the increasing market value of stablecoins like USDT and USDC has offered some support to the market.

Analysts are paying close attention to the U.S. Treasury's Quarterly Refunding Announcement scheduled for May 1. Analysts believe that issuing more short-term U.S. bonds could inject liquidity into the market, potentially benefiting risky assets like Bitcoin. The Treasury's plans to borrow more during the April-June quarter could lead to an increase in bond supply and yields, affecting investors' attitudes towards riskier assets.

Potential Rise in Bitcoin Dominance

Despite the recent drop in price, Bitcoin's dominance in the cryptocurrency market has reached 57%, its highest level in three years. This breakout from a six-month consolidation pattern suggests that Bitcoin may outperform altcoins in the upcoming months.

Fairlead Strategies, in its recent client report published on April 29, observed that the increase in Bitcoin's dominance signals a preference for the leading cryptocurrency over altcoins in the medium term. This observation is supported by the weekly Relative Rotation Graph (RRG), which indicates a downward trend for most altcoins. Fairlead Strategies also noted that Bitcoin's dominance breakout suggests a continuation of a long-term recovery phase, with altcoins losing most of the gains accumulated since early 2021.