Bitcoin Dominance(Uses)
BTC.D Bitcoin dominance refers to the percentage of the
total cryptocurrency market capitalization that is
represented by Bitcoin. In other words, it indicates
the proportion of the entire cryptocurrency market
that is attributed to Bitcoin's market value.
For example, if Bitcoin has a market capitalization
of $600 billion and the total cryptocurrency market
cap is $1.5 trillion, then the Bitcoin dominance
would be 40% (since $600 billion is 40% of $1.5
trillion).
Bitcoin dominance is a metric that traders,
investors, and analysts use to assess Bitcoin's
relative strength compared to other
cryptocurrencies. Changes in Bitcoin dominance
can be indicative of shifts in market sentiment. For
instance, if Bitcoin dominance is increasing, it may
suggest a trend where Bitcoin is outperforming
other cryptocurrencies, and if it's decreasing, it
may indicate that alternative cryptocurrencies
(altcoins) are gaining traction.
During phases of high Bitcoin dominance, traders
might opt for a more conservative approach,
focusing on larger, more established
cryptocurrencies to reduce risk.
Conversely, when Bitcoin dominance is low, and
altcoins are performing well, traders may allocate
a portion of their portfolio to potentially higher-risk,
higher-reward altcoin investments.
Remember that while Bitcoin dominance can
provide valuable insights, it should not be the sole
factor in your trading decisions, Cryptocurrency
markets are highly dynamic, and factors such as
news, regulations, and technological
developments, can significantly impact prices.
Always, always, always use a comprehensive
approach to trading and common sense :-)
You can find the Bitcoin Dominance Chart by typing
BTC.D into the TradigngView searching tool.
Enjoy
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