How to Understand Bitcoin Dominance: How it Works and Why it is Important
Bitcoin Dominance is a measure of how much of the total market cap of crypto is comprised of Bitcoin. It can help you understand the trend of BTC and alts.
The most important thing about Bitcoin Dominance is that it can help you understand if altcoins are in a downtrend or uptrend against BTC.
- When BTC Dominance increases, alts on the whole lose BTC value.
- When BTC Dominance decreases, alts on the whole gain BTC value.
This means in most cases you’ll want to be in Bitcoin when Bitcoin Dominance is in an uptrend, and then be in alts when Bitcoin Dominance is in a downtrend.
It is almost that easy. The problem is the above is only true when Bitcoin is in an uptrend. When Bitcoin is in a downtrend, you generally are better off being in dollars / stable coins… unless it is a minor downtrend and Bitcoin dominance is decreasing rapidly as alts rise in price (this is rare, but certainly it can and does happen).
In short though, it is important to learn how to read the Bitcoin dominance chart. Luckily it is only a click away at CoinMarketCap.com.
"What is Bitcoin Dominance?" contains information about the following Cryptocurrencies: