BTC Dominance is the first and most well-known cryptocurrency in terms of market value and trading volume. The cryptocurrency market is getting very competitive with most exchanges trying to offer their own unique solutions for various use cases.
This article will explain how to trade cryptocurrencies using the Bitcoin dominance indicator, and how to interpret the Bitcoin dominance index chart.
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Table of Contents
What is BTC Dominance?
Bitcoin (BTC) Dominance is the ratio of the total market capitalization of bitcoin to the total market capitalization This indicator tells you if an altcoin is rising or falling vs Bitcoin (BTC). You’re correct. If you are using Bitcoin as an investment instrument, then your portfolio will be subject to!
Bitcoin has an inverse relationship to stock market performance. When stock market prices go down, bitcoin prices usually go up. A bear market in the crypto market pushes the altcoin market cap below Bitcoin. Bullish or bearish markets don’t change Bitcoin’s dominance.
If Bitcoin and other cryptocurrencies collapse, then Bitcoin’s dominance will remain, but it may be a smaller share of the market.
How to Calculate BTC Dominance?
Calculating the figure is easy: BTC’s market cap is divided by all cryptocurrencies’ market caps.
BTC Dominance is calculated as follows.
Bitcoin (BTC) dominance = Bitcoin (BTC) market cap ÷ All other cryptocurrency’s market capitalization.
Example: If all other cryptocurrencies’ market caps are 100 million USD and Bitcoin’s is 70 billion USD, BTC Dominance is 70%.
Altcoins and BTC Dominance: How Does It Work?
BTC Dominance measures the total market’s trading volume in BTC. altcoins. When Bitcoin is the only game in town, it’s usually best to own more BTC. Traders believe that Bitcoin’s dominance over the market will decrease. Bitcoin supremacy and bear/bull markets are linked. Altcoin bull markets could erode Bitcoin’s dominance. Traders in poor economies may sell alternative currencies like altcoins and buy bitcoin.
Lower Bitcoin dominance may be positive, as it implies the crypto sector is increasing and investment is shifting to other projects. Pre-mined and forked currencies will inflate altcoin numbers.
While it may be true that Bitcoin’s price climbs, its domination is not eternal. A rising tide lifts all boats, so when money starts flooding the crypto markets, it may migrate into another If Bitcoin’s dominance defines the crypto industry, there are several others. Altcoins tend to have no relation to Bitcoin. They can lose money, and they can lose it faster Take out a loan or invest more money.
How To Trade Bitcoin Dominance?
Bitcoin trading is complicated. It’s hard to say which one will dominate because there are multiple choices A coin’s rise doesn’t mean others will, but it does mean that it’s more difficult Cryptocurrencies are not new, but their goals and market impact are. Volumes of stablecoins will temporarily increase as crypto newcomers join the ecosystem.
Bitcoin’s price will have an effect on the stock market. Bitcoin is going nowhere. It’s no wonder that some new cryptocurrencies are generating lots of hype, and that Bitcoin has attracted so much attention. Some new Bitcoin ventures are scams, and many users withdraw quickly after they learn about the scam. Bitcoin’s dominance may return in 2018.
Bitcoin is a good example of how some altcoins have risen in popularity. Because of altcoins, Bitcoin’s dominance won’t return. BTC’s supremacy may rise if other countries legalize it. As altcoin currencies gain traction, bitcoin’s supremacy will fall. Bitcoin dominance is nearing an all-time high. That could be a resistance point for You’ll see how falling Bitcoin dominance is affecting other cryptocurrencies.
