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When Bitcoin Dominance is in an uptrend and your strategy involves holding both bitcoin and altcoins, it is recommended to start increasing your position in fundamentally strong altcoins with high ICR Score that will survive in the long run. However, it is important to note altcoin investments are riskier than bitcoin investments. This metric does not provide insights on the bitcoin price.
Bitcoin Dominance is a metric that measures the relative market share of Bitcoin within the overall cryptocurrency market.
It is calculated by comparing Bitcoin’s total market capitalisation to the combined market capitalisation of all cryptocurrencies.
Since Bitcoin was the first cryptocurrency and continues to remain the largest digital asset by market value, its dominance is widely tracked as an indicator of broader market behaviour and capital allocation trends.
Bitcoin Dominance is commonly used to understand market sentiment and investor preferences across the crypto ecosystem.
A rising Bitcoin dominance generally indicates:
On the other hand, declining Bitcoin dominance may suggest:
The metric is also viewed by many participants as an indicator of how capital is flowing between Bitcoin and the broader altcoin market.
Bitcoin Dominance is often used by investors and traders to evaluate market cycles, portfolio diversification, and broader trading trends.
The metric can help identify:
Historically, Bitcoin dominated the majority of the crypto market. However, as the industry has evolved, newer crypto assets with different use cases and technologies have emerged, gradually reducing Bitcoin’s share of the total market over time.
While Bitcoin Dominance provides valuable insight into market structure and capital rotation trends, it should be analysed alongside other indicators, as the broader crypto market is influenced by multiple economic, technical, and behavioural factors.
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