The Bitcoin dominance chart indicates a potential recovery amid macroeconomic signals

Cryptocurrency markets have entered a challenging period where every price movement reflects deep macroeconomic changes. After significant declines in recent weeks, Bitcoin dominance indicators and traditional financial instrument behaviors are beginning to send mixed but potentially positive signals for recovery. ING data shows growing open interest in bullish options on US Treasury bonds, which could signal a turning point for both bond markets and cryptocurrency assets.

Bitcoin Dominance Collapse Amid Risk Reassessment

In Asian trading sessions, volatility peaked: Bitcoin’s price temporarily dropped below $90,000 for the first time in seven months before stabilizing around $91,000. This represented a roughly 4.5% decline over a 24-hour period. At the same time, Bitcoin’s dominance in the crypto market faced pressure, showing a pullback of speculative capital into alternative assets.

Major altcoins performed relatively better: XRP traded around $1.66, BNB stayed above $779, and Solana (SOL) hovered around $105.51. However, most of the top 100 coins were in the red zone, with few exceptions including ASTER, HYPE, KYPE, and ICP. This pattern indicates selective investor risk appetite, where Bitcoin dominance reflects broader fluctuations in risk sentiment.

Wintermute analysts explain the two-digit monthly decline in Bitcoin mainly by weakening expectations of a Federal Reserve rate cut in December. The probability of a cut fell from about 70% to 42% in just a week. According to their assessment, Fed Chair Jerome Powell’s refusal of an almost guaranteed cut in December caused investors to reassess the preferences of FOMC members, revealing that such a cut is far from consensus.

Bonds Signal Positivity, Dollar Weakening on the Horizon

Despite current pressure, the picture on longer timeframes looks different. ING data revealed a significant increase in open interest in bullish options on US Treasury bonds. This indicates traders are betting on rising bond prices and falling yields. Interpreting this position suggests market participants expect weaker macroeconomic data, which could revive hopes for faster rate cuts by the Federal Reserve.

ING noted that considering only 15 basis points of potential rate cuts in December, there is substantial room to influence short-term rates and the dollar’s dynamics. Historically, dollar weakness has created favorable conditions for crypto and risk asset recovery. Falling bond yields typically lead to capital flows into alternative assets, including gold, growth stocks, and digital assets.

Currently, the US Dollar Index (DXY) remains steady at 99.60 and is poised to continue its rebound toward 100.25, which earlier this month served as a strong resistance level (August 1 high). A clear breakout above 100.25 could increase pressure on risk assets, while a rebound from these levels would open space for recovery. The interaction of price with these critical levels will be crucial for market observers.

VIX and DXY Analysis: When Will the Chart Turn in Favor of Bulls

The VIX index, tracking 30-day implied volatility in the S&P 500, is breaking out of a prolonged range, which may indicate a time for increased volatility on Wall Street. Historical behavior shows that rising volatility in equities often spreads to cryptocurrencies, further amplifying already high fluctuation levels. However, it remains unclear whether this breakout will hold or fade again, as it did last month.

The Bitcoin dominance chart, reflecting its share of the crypto market, shows complex dynamics. As volatility increases, speculative capital begins reallocating among assets. Current levels of Bitcoin dominance suggest the market is still subject to significant overvaluation. Nonetheless, if forecasts of dollar weakening and bond yield declines are confirmed, the Bitcoin dominance chart could potentially turn upward along with renewed demand for the main crypto asset.

Technical support levels remain critical: a drop below $75,680 could deepen the correction, while consolidation above $80,000 would start restoring market confidence and support Bitcoin dominance recovery.

Main Assets and Bitcoin Statistics at a Glance

As of the latest data, Bitcoin trades around $78.73K, down 4.84% over 24 hours. Ethereum (ETH) decreased by 7.92% to $2.42K, reflecting weaker results for alternative assets compared to Bitcoin. dYdX trades at $0.14, and Ether.fi is at $0.50.

The CoinDesk 20 index and the Ethereum staking composite rate (CESR) at 2.91% indicate ongoing market volatility. Spot Bitcoin ETFs experienced daily net outflows of $254.6 million, reflecting investor reluctance amid current uncertainty. Total net flows into spot BTC ETFs remain positive at $58.58 billion with total holdings around 1.32 million BTC.

Bitcoin statistics show dominance at 58.96% (down 0.8%), confirming capital flows into alternative coins. Hashrate remains stable at 1,103 EH/s (seven-day moving average), indicating continued network activity despite price fluctuations. The Ether-to-Bitcoin ratio is 0.03351, demonstrating Ethereum’s relative weakness.

What’s Next for Cryptocurrency: Calendar of Events and Recovery Outlook

For bullish Bitcoin holders hurt in recent times, these forecasts could signal a potential turning point. Falling bond yields and dollar weakening have historically created favorable conditions for crypto recovery. The key question remains: when will this soft reassessment of Treasury prices spread to risk assets, allowing Bitcoin and the broader crypto market to stabilize?

In the coming week, investors should watch several key events: the launch of Solana ETFs under tickers FSOL on NYSE Arca and SOLC on Nasdaq, ADP employment report, Fed Board member Michael S. Barr’s speech on banking supervision. Additionally, votes are underway in the Render (RENDER) community on expanding computing programs, and analytical sessions for dYdX and Ether.fi to discuss economic parameters.

The Open Network (TON) token will be listed on Coinbase with the TON/USD pair, Horizen (ZEN) will appear on OKX, and Datagram (DGRAM) will begin trading on Bitget. The series of crypto conferences includes summits on banking sector transformation in Charlotte, the AFC policy in Washington, and the Euro Stablecoin Forum in Frankfurt.

The recovery chart depends on confirmation of these macro signals. If bond markets indeed turn toward rising prices and falling yields, and the dollar weakens, the Bitcoin dominance chart will gain support for recovery. The market is at a critical juncture where upcoming economic data and Fed decisions will determine whether the long-awaited crypto rebound begins or pressure persists.