Bitcoin Dominance Cheat Sheet
Updated
Hi Traders, Investors and Speculators of Charts📈📉
Bitcoin dominance and the rotations between BTC and altcoins can be confusing. Enjoy this easy-to-understand guide to BTC.D , and why it is important to watch alongside with the bitcoin chart.
👇👇👇
BTC dominance is calculated by dividing the market cap of BTC by the total market cap of all cryptocurrencies. If the TOTAL market cap is 1.5 trillion and the market cap of alts increases, then BTC dominance will go down unless the market cap of BTC also increases.
But to really understand the rotation of money between BTC and alts, you'll need a clear understanding of how how market caps all fit together.
Imagine a pie where each slice represents a different cryptocurrency. The pie here indicates the total cryptocurrency market cap of both Bitcoin and altcoins, which can increase or decrease at any given time. In other words the TOTAL chart.
- If BTC market cap increases but altcoin market cap shrinks (relative), the pie stays the same size.
- If BTC market cap increase and altcoin market cap increases, the pie size increase and so forth.
If BTC dominance is at 40%, it means that the BTC slice of the pie chart is 40% of the total size of the pie. The remaining 60% of the pie is made up of all other cryptocurrencies (altcoins).
A pie chart from March 2023:
Now, imagine a new bullish cycle starts across the crypto markets. This causes the market capitalization of both altcoins and Bitcoin to increase. If the market capitalization of BTC also increases, but at a slower rate than the market capitalization of altcoins, then BTC dominance will remain stable even though BTC Price increases AND altcoins prices increase. This is because the BTC slice of the pie is still 40% of the total size of the pie, even though the pie has grown larger.
In other words, the pie has gotten bigger, but the size of the BTC slice has remained the same relative to the rest of the pie.
Here is another way to think about it:
Total market cap: $1.5 trillion
BTC market cap: $900 billion
Alt market cap: $600 billion
BTC dominance: 60%
Now, let's say that the alt market cap increases by $200 billion and the BTC market cap increases by $100 billion. The total market cap would now be $1.8 trillion and the BTC market cap would be $1 trillion. BTC dominance would still be 60%, even though the price of BTC increased because the overall pie has gotten bigger.
Here is an example of how the BTC dominance falls, but BTC price increases:
Total market cap: $1.5 trillion
BTC market cap: $900 billion
Alt market cap: $600 billion
BTC dominance: 60%
Now, let's say that the alt market cap increases by $200 billion, but the BTC market cap only increases by $100 billion. The total market cap would now be $1.8 trillion and the alt market cap would be $800 billion. BTC dominance would now be 50%, even though the price of BTC has increased.
As a summary:
UP: BTC dominance is increasing, meaning that BTC is outperforming altcoins.
STABLE: BTC dominance is remaining relatively unchanged. This could indicate price movement on either Bitcoin or Alts.
DOWN: BTC dominance is decreasing, meaning that altcoins are outperforming BTC.
We see an increase of market capitalization on the TOTAL chart:
_______________________
📢Follow us here on TradingView for daily updates📢
👍Hit like & Follow 👍
We thank you for your support !
CryptoCheck
BTC.D 
TOTAL
Bitcoin dominance and the rotations between BTC and altcoins can be confusing. Enjoy this easy-to-understand guide to BTC.D , and why it is important to watch alongside with the bitcoin chart.
👇👇👇
BTC dominance is calculated by dividing the market cap of BTC by the total market cap of all cryptocurrencies. If the TOTAL market cap is 1.5 trillion and the market cap of alts increases, then BTC dominance will go down unless the market cap of BTC also increases.
But to really understand the rotation of money between BTC and alts, you'll need a clear understanding of how how market caps all fit together.
Imagine a pie where each slice represents a different cryptocurrency. The pie here indicates the total cryptocurrency market cap of both Bitcoin and altcoins, which can increase or decrease at any given time. In other words the TOTAL chart.
- If BTC market cap increases but altcoin market cap shrinks (relative), the pie stays the same size.
- If BTC market cap increase and altcoin market cap increases, the pie size increase and so forth.
If BTC dominance is at 40%, it means that the BTC slice of the pie chart is 40% of the total size of the pie. The remaining 60% of the pie is made up of all other cryptocurrencies (altcoins).
A pie chart from March 2023:
Now, imagine a new bullish cycle starts across the crypto markets. This causes the market capitalization of both altcoins and Bitcoin to increase. If the market capitalization of BTC also increases, but at a slower rate than the market capitalization of altcoins, then BTC dominance will remain stable even though BTC Price increases AND altcoins prices increase. This is because the BTC slice of the pie is still 40% of the total size of the pie, even though the pie has grown larger.
In other words, the pie has gotten bigger, but the size of the BTC slice has remained the same relative to the rest of the pie.
Here is another way to think about it:
Total market cap: $1.5 trillion
BTC market cap: $900 billion
Alt market cap: $600 billion
BTC dominance: 60%
Now, let's say that the alt market cap increases by $200 billion and the BTC market cap increases by $100 billion. The total market cap would now be $1.8 trillion and the BTC market cap would be $1 trillion. BTC dominance would still be 60%, even though the price of BTC increased because the overall pie has gotten bigger.
Here is an example of how the BTC dominance falls, but BTC price increases:
Total market cap: $1.5 trillion
BTC market cap: $900 billion
Alt market cap: $600 billion
BTC dominance: 60%
Now, let's say that the alt market cap increases by $200 billion, but the BTC market cap only increases by $100 billion. The total market cap would now be $1.8 trillion and the alt market cap would be $800 billion. BTC dominance would now be 50%, even though the price of BTC has increased.
As a summary:
UP: BTC dominance is increasing, meaning that BTC is outperforming altcoins.
STABLE: BTC dominance is remaining relatively unchanged. This could indicate price movement on either Bitcoin or Alts.
DOWN: BTC dominance is decreasing, meaning that altcoins are outperforming BTC.
We see an increase of market capitalization on the TOTAL chart:
_______________________
📢Follow us here on TradingView for daily updates📢
👍Hit like & Follow 👍
We thank you for your support !
CryptoCheck
BTC.D TOTAL Note
BTC.D is going UP, and BTC price is going UP, so we can expect alts to trade lower until BTC.D goes lower :Note
Latest update on ETH and ADA:
Discord Server
discord.gg/xHJRka3
Cryptocheck Website
thecryptocheck.com
SoftQuant Website
softquant.io
discord.gg/xHJRka3
Cryptocheck Website
thecryptocheck.com
SoftQuant Website
softquant.io
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.