Bitcoin dominance. A term that you might've come across on your crypto journey. Find out what it means in this blog ⤵️
Bitcoin dominance, or BTC dominance, is measured as the ratio of the market capitalization of bitcoin to that of the rest of the cryptocurrency market. Some crypto investors and traders use bitcoin dominance as a guide to adjust their trading strategies and portfolio structures.While there are now thousands of altcoins out there, bitcoin, the original cryptocurrency, has remained the largest digital asset by market capitalization.
Over time, bitcoin has established itself as one of the more “stable” crypto assets. Traders’ interest in more dramatic price swings and associated profit opportunities that some newer altcoins offer can also affect bitcoin dominance, leading to funds flowing into riskier assets. In this case, the sectors these altcoins represent may not matter as much as the potential profits.
Diversified traders and investors often use this approach to pick the stronger trend. Below are several scenarios where the Wyckoff Method is at play.With the increasing number of altcoins in the market, it is unsurprising that bitcoin dominance is being diluted. In recent years, some altcoins have gained more popularity, causing the total market cap of all altcoins to briefly surpass that of bitcoin. Periods when altcoins steadily outperform bitcoin are known as “altcoin season” or “.
When the price of BTC is falling but BTC dominance is rising, it could signal a potential altcoin bear market.
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