Bitcoin Reclaims $110K as Softer Inflation Data Boosts Sentiment; Altcoins Fail to Follow

Bitcoin Reclaims $110K as Softer Inflation Data Boosts Sentiment; Altcoins Fail to Follow

Bitcoin ($BTC$) reclaimed the crucial $110,000 level on Friday, leading a selective market rally after U.S. inflation data came in cooler than anticipated, boosting risk appetite. While Bitcoin and Ether ($ETH$) showed strength, the vast majority of the altcoin market failed to participate, signaling a clear divergence in investor conviction and a flight to quality.

Macro-Driven Relief Fuels Bitcoin

The primary catalyst for the move was a softer-than-expected Consumer Price Index (CPI) report, which has eased fears of a more hawkish Federal Reserve. This macroeconomic relief was immediately reflected in Bitcoin’s price, which jumped from earlier lows to trade firmly at $111,738. Ether followed suit, moving back toward the $4,000 psychological level.

This price action was mirrored in the derivatives market, where anxiety from last week’s brutal sell-off rapidly subsided. Bitcoin’s 30-day implied volatility, a key measure of market fear, dropped from 52% to 45% in just two days. Options data further suggests a return to calm, though with lingering caution. While dealers have built up a positive gamma position between $112,000 and $120,000—which tends to dampen volatility in that range—bearish put options continue to trade at a premium to bullish calls across all timeframes.

Altcoin Market Enters ‘Bitcoin Season’

The most significant trend is the stark underperformance of altcoins, which have been decoupled from Bitcoin’s recovery. CoinMarketCap’s “altcoin season” index has slumped below 25/100 for the first time in over 90 days, officially signaling a “Bitcoin season.” This indicates that market gains are heavily concentrated in Bitcoin rather than being distributed across the broader market.

This weakness is reflective of a deeper, structural issue for altcoins, which suffered catastrophic losses during the recent liquidation cascade. While Bitcoin has stubbornly held its range between $100,000 and $126,000 since July, many alt-layer tokens and meme coins have seen their market structures break. Assets like FET, BONK, and WIF remain down more than 50% over the past three months, and a lack of retail demand has been unable to absorb selling pressure, even in the face of significant investments from Digital Asset Treasury (DAT) companies.

This market bifurcation paints a clear picture: investors are willing to add risk on positive macro news, but that capital is flowing almost exclusively into the market’s blue-chip assets. The altcoin market, having been severely damaged by the recent deleveraging, is being left behind, with Bitcoin’s dominance creeping up from 57% to 59% since mid-September. The immediate challenge for altcoins will be to re-establish critical support levels without the aid of broad, retail-driven momentum.