Guide – What is Bitcoin Dominance?

I get quite a lot of questions about #Bitcoin dominance ( $BTCD ).

So, I thought, why not make a short thread/guide on it, as it’s a crucial thing to understand when you’re into #crypto.

So, here goes!



What is Bitcoin Dominance?

Bitcoin Dominance ( $BTCD ) is one of the most important tools for keeping an eye on the market. It helps you to maximize your #BTC holdings. But how does it work? How is the % share of BTC in the total Crypto market cap helpful for trading in the market?

In one line, BTCD is the % of share of Bitcoin in the total crypto market cap i.e. Bitcoin Dominance is used to show the dominance and strength of BTC as compared to the other crypto in the market.


Why is Bitcoin Dominance Important?

BTCD is important because it shows the confidence investors have in altcoins. Example: If BTCD is less than 35%, investors become much more comfortable investing in altcoins which is a high risk.

This usually happens in a Bullish market where high risk – high reward investments like #altcoins become much more appealing for buying as the markets are safer.

However, during a bear market we see the BTCD rising.

As confidence in altcoins is lost, people start moving to #BTC as it is a much safer alternative for them.

This movement of Bitcoin Dominance during different market time periods shows how the crypto markets are going to behave.

It shows if we are in a healthy #altcoin market or a bear market. “BTCD goes up during bull runs.” “BTCD goes down during uncertain bear markets”



How to trade Bitcoin Dominance (BTCD)?

BTCD is a little tricky at first for trading. However, it has some very specific rules.

We can start by seeing the BTCD chart and identifying the trend it is following.

If we are seeing a bearish trend on the Bitcoin Dominance(BTCD) chart and the macro factors (overall market sentiments) are positive then it is a signal of an alt season. It generally makes more sense to get into good alts as they are getting ready for a rally.

If we are seeing a bullish trend on the Bitcoin Dominance( BTCD) and the macro factors are negative(overall market sentiments), it’s best to be in BTC instead of altcoins as a major dump is on the horizon.



Here is a quick cheat sheet for trading according to the $BTCD in other cases. However, ALWAYS DYOR! Nothing is 100% certain. That’s it, thanks for reading!



Thanks a lot for reading this guide! Hope you have enjoyed/learned something from it! Be sure to have a look at the other guides as well by clicking here! And don’t forget to follow us on Twitter: @AltCryptoGems.

If you have any questions, do not hesitate to contact us!