What is BTC Dominance?


During the ICO boom of 2017, altcoins began to use a measure of BTC dominance. Around the same time, the index became popular among trading communities. By 2021, the index will become an increasingly popular measure of cryptocurrency dominance. Early platforms to track BTC dominance included CoinMarketCap and Trading View. Today, BTC dominance is often correlated with market capitalization.

Market capitalization

While Bitcoin is the most popular cryptocurrency, there are other cryptocurrencies as well. While some people may think that it’s only Bitcoin, this is not the case. Various cryptocurrencies have their own market cap, which is determined by the appetite of investors to buy them. However, large cryptocurrencies are also subject to liquidation, which reduces the total market cap. During the early years of cryptocurrency, Bitcoin was the most dominant currency, but as other altcoins started to attract investment, Bitcoin’s market cap started to decrease.

This phenomenon is called Bitcoin Dominance, and it shows how much Bitcoin is worth in relation to the entire crypto market. This information can help investors manage their risk, and can help them decide whether or not to invest in certain crypto assets. The total market cap of cryptocurrencies is $100 million, and Bitcoin is about 65% of it.

Bitcoin dominance is a key indicator for understanding crypto charts. The higher the BTC dominance number, the higher the market cap of an altcoin. However, when trading bitcoin becomes expensive, investors turn to alternative digital assets. The alt season follows. Trading in a new market can be risky, especially if you’re not familiar with the specifics. To maximize your returns, it’s crucial to learn about the different cryptocurrencies and their market caps. A good indicator for this is the BTC dominance index.

Bitcoin dominance is important because it can show us where the market is heading. During bull markets, altcoins tend to outperform Bitcoin. During these times, Bitcoin dominance is lower, and altcoin prices rise faster. A low BTCD indicates a bull market, and a rising total market cap could mean that bitcoin’s price will eventually rise despite a lower BTC dominance.

Another factor that has affected Bitcoin dominance is the rise of stablecoins. Stablecoins offer convenient access to specific cryptocurrencies. These stablecoins are becoming increasingly popular with traders and investors alike, as they help protect their funds from volatility. Stablecoins also have a stable value, which prevents investors and traders from losing their profits by turning them into fiat.

Bitcoin’s share of total cryptocurrency value

The Bitcoin price has increased significantly in recent months. This is largely due to the recent announcement that the U.S. Federal Reserve will raise interest rates this fall. This announcement is good news for the cryptocurrency market, but there are some things to keep an eye out for. Cryptocurrency is highly volatile and a strong dollar can be harmful for it. The USD-BTC pair is also susceptible to currency-conversion fluctuations, so it’s important to watch your trades closely.

Bitcoin’s market cap is about $600 million, and the total cryptocurrency market is worth over $2.48 trillion. This makes it the largest cryptocurrency in the world, but it isn’t the only one. Several countries have tried to impose capital gains taxes on crypto. In addition to that, different countries have different legislation regarding crypto. As of December 17th, 2022, Bitcoin represents about 9% of the total value of all cryptocurrencies.

Bitcoin is decentralized, meaning that no single institution controls it. It’s also transparent, which makes it easy to use. It’s also easy to set up a bitcoin account. Since its creation, Bitcoin has risen in value significantly. In January 2016, it was worth just 367 U.S. dollars, but by December 2017, it had reached more than 13,000 U.S. dollars. While Bitcoin is not immune to economic phenomena, it still has a huge market share.

Bitcoin has experienced periods of rapid price fluctuations, with the most recent one occurring in November 2021. This is largely due to increasing interest rates and reduced liquidity. The price of Bitcoin is notoriously driven by sentiment. During the greed phase, speculators rush in with the expectation of price appreciation. During the fear phase, sellers push the price lower amid bad news and general market malaise.

Bitcoin’s share of total cryptocurrency value is the highest among the major cryptocurrencies. It started at under a cent per coin and has grown thousands of percent since its inception. Its price is extremely volatile and can vary widely among different countries.

Popularity of altcoins

In the first years of cryptocurrency, Bitcoin dominated the market. In March 2017, it had an estimated 85 percent market share. However, by June 2017, everyone wanted to get in on Ether and the hottest ICOs. In June, there were 2,000 altcoins listed on CoinMarketCap, indicating the start of a protocol and dapp race. In less than two months, anyone could create a new cryptocurrency and claim it as their own.

As new altcoins enter the crypto space, they tend to generate massive amounts of hype, which lowers the dominance of Bitcoin. However, many of these altcoin projects eventually fade out of existence and users pull their holdings. As a result, Bitcoin’s dominance could return to its former position.

However, despite this, investors often de-risk and consolidate their portfolios, and do not trade smaller altcoins. They may also refrain from yield-farming, which exposes them to more risk of capital loss. Furthermore, they may consolidate their capital into the top-ranking chains.

Although Bitcoin remains the leading crypto asset, it has been surpassed by many other cryptocurrencies. As the market matures and the number of crypto projects increases, the dominance of Bitcoin will decrease. However, the popularity of altcoins is increasing as more people become interested in these coins.

As altcoins proliferate, they drag down the BTC dominance ratio, and this could lead to losses and inconsistent results. The rise of altcoins has been recent, so it is difficult to observe trends and predict future outcomes. However, there are some trends that can help investors manage risk.

Bitcoin dominance is a key indicator to spot market conditions and can help traders predict whether to buy or sell crypto assets. Using BTC dominance, investors can also predict which crypto assets will have the strongest overall trend. It can help them decide on which ones are safer to invest in.

Impact of “alt seasons”

“Alt seasons” are periods in which one cryptocurrency outperforms another, usually lasting from several weeks to several months. In the case of Bitcoin, these periods are usually followed by a period of decline. During such times, new investors will pour their money into altcoins, believing that Bitcoin is too expensive and has plenty of room for growth.

Altcoins are growing immensely in the past two years, as new projects continue to be launched to fill needs in the blockchain space and improve upon existing solutions. As the crypto market continues to mature, these trends will likely continue. Nevertheless, the impact of alts on Bitcoin’s dominance is uncertain. Although recent markets have shown similarities to prior alt seasons, there’s no clear pattern about how long this trend will last. The number of new coins will likely grow in size as positive news reaches the market.

While altcoins have risen steadily in value, their value has recently surpassed Bitcoin in value. During “alt seasons”, capital will flow from Bitcoin to altcoins, resulting in a decline in Bitcoin’s dominance. These periods may also be characterized by lower levels of Dominance index for Bitcoin.

In addition to altcoins outperforming Bitcoin, altcoin prices are also correlated with each other. A sharp increase in Bitcoin’s price will have the same effect on altcoin prices, and a sharp decline in its price will also take its toll on alts.

In January, a third of the top 50 coins did better than Bitcoin, thereby lowering Bitcoin’s dominance. Nevertheless, the influx of alts has created a second all-time high for many cryptocurrencies. Time will tell if history repeats itself in 2018, but it seems likely that alts will continue to exert a greater influence on the cryptocurrency market than bitcoin did last year. In the long run, bitcoin’s dominance will remain unaffected. Although this has a negative impact on the price of altcoins, it doesn’t necessarily imply that altcoins will overtake BTC in value. However, altcoins are a good thing, and this is something to keep in mind when analyzing altcoin dominance.