Understanding BTC Dominance
Yaser Rahmati | یاسر رحمتی
Last updated
Yaser Rahmati | یاسر رحمتی
Last updated
Definition: BTC dominance refers to Bitcoin's market capitalization as a percentage of the total market capitalization of all cryptocurrencies.
Calculation:
Market Sentiment Indicator: A high BTC dominance indicates that Bitcoin is more dominant relative to other cryptocurrencies, often reflecting investor preference for Bitcoin over altcoins.
Risk Appetite: Lower BTC dominance might suggest higher investor risk appetite, as funds flow into altcoins.
Early Years: In Bitcoin's early days, BTC dominance was very high because there were few other cryptocurrencies.
Altcoin Booms: Periods like 2017 saw a decrease in BTC dominance as many new altcoins were introduced, and interest in them surged.
Market Cycles: BTC dominance fluctuates based on market cycles, news, and technological developments.
Definition: USDT dominance refers to Tether's market capitalization as a percentage of the total market capitalization of all cryptocurrencies.
Purpose: Tether is a stablecoin, meaning it is pegged to the US Dollar, providing a safe harbor during market volatility.
Market Sentiment: Often, BTC dominance and USDT dominance have an inverse relationship. When the market is bearish, investors might move their assets into Tether, increasing its dominance, and vice versa.
Flight to Safety: During market downturns, the shift from volatile assets to stablecoins like USDT increases, thereby decreasing BTC dominance.
Bearish Signals: Rising USDT dominance alongside declining BTC dominance can signal a bearish market, indicating a potential move to stablecoins or cash.
Bullish Signals: Declining USDT dominance and rising BTC dominance might indicate a bullish sentiment, suggesting a favorable environment for investing in Bitcoin and altcoins.
BTC dominance, market capitalization, altcoins, investor sentiment, trend analysis, risk management, USDT dominance, technical indicators, market cycles, diversification , یاسر رحمتی
