Bitcoin Slides as Altcoins Rally Hard Amid Macro Pressure

The crypto market is showing two distinct trends. Bitcoin has dropped by 8% over the past week, trading at $84,097 and slightly negative for the year at -3.90%. On the other hand, several altcoins are rallying hard, with XRP up 15.72%, Cardano (ADA) increasing by 16.57%, Chainlink rising by 15.13%, and Dogecoin adding 13.19% on the week.

The macro backdrop is contributing to Bitcoin's decline. Rising bond yields and a stronger dollar have taken the wind out of both Bitcoin and gold. However, institutions are buying the dip, with US spot Bitcoin ETFs flipping back into accumulation mode and adding around $347 million in a single day.

Altcoins are benefiting from capital rotation, with derivatives data showing that altcoin futures open interest has overtaken Bitcoin's for the first time since 2024. This suggests that traders are positioning themselves in alts rather than hiding in BTC. The caveat is that rotations built on leverage can unwind just as fast.

Privacy coins are also performing well, with Zcash (ZEC) up 6.30% this week and an eye-watering 207% year to date, making it comfortably the best performer in the top ten. Several factors are feeding this rally, including Grayscale's conversion of its Zcash Trust into a US spot ETF and the growing share of ZEC locked in the fully private shielded pool.

The short-term script is written by the Fed, with markets pricing in more rate hikes. As long as this continues, Bitcoin will struggle to reclaim its September highs, and the $82,800 level is the support bulls need to defend to keep the structure intact.