What is Bitcoin Dominance and how to use it for digital currency trading?

What is Bitcoin Dominance and how to use it for digital currency trading?

Calculating the market value of altcoins is a bit more difficult than the market value of Bitcoin. As CoinMarketCap points outWith thousands of altcoins and new projects being launched every day, this calculation is not possible manually. Fortunately, there are platforms that automatically calculate said market value for you.

It is not enough to just look at the movement of both market values ​​to determine Bitcoin dominance. Instead, we need to analyze which market dominates the other; Therefore, Bitcoin dominance can be seen as a struggle between altcoins and Bitcoin.

Among the other reasons affecting the dominance of Bitcoin, we can mention the market conditions, increasing the speed through stablecoin, changing trends, new coins and projects.

Bull or bear market (up or down)

One of the factors influencing the dominance of Bitcoin is the general market conditions. In general, Bitcoin’s dominance increases in bear markets and, on the other hand, loses its position in bull markets; Because investors consider Bitcoin a safe haven; While altcoins sometimes bring astronomical profits to Armaghan.


Stablecoins such as BUSD, USDC, and USDT are witnessing an increase in their market capital; Because over time more money enters this space. Due to the increase in demand, new stablecoins are multiplied regularly, and with the increase of this supply, the value of the mentioned market increases, and in general, the capital market of altcoins enters higher levels.

A great example of why trends can affect Bitcoin dominance is the summer of 2020 and 2021. During these periods, the DeFi sector showed great performance and the price of many of these tokens doubled or even increased in a few weeks; while other market segments were almost constant. These conditions caused a general increase in the market value of altcoins; Because of this, Bitcoin’s dominance was reduced.

New altcoins

Finally, another obvious factor affecting Bitcoin’s dominance is the entry of new cryptocurrencies into the market. Each new project increases the market share of altcoins slightly, and as a result, the measure of Bitcoin dominance will inherently follow a downward trend.

How to use Dominance Bitcoin in buying and selling cryptocurrency?

You can use the Bitcoin dominance criterion to get better positions in the cryptocurrency market.

Identifying the altcoin season

Just as the summer of DeFi brought down Bitcoin’s dominance, so too is the season of altcoins. Therefore, monitoring the dominance of Bitcoin can show the early signals of the beginning of the season of altcoins. In this situation, by checking the market and buying valid altcoins, you can get a significant profit.

When Bitcoin’s dominance starts to recover, it’s best to sell your altcoins and convert them back into stablecoins or bitcoins and prepare for the next altcoin season.

Identifying the strongest digital currency trends

Traders can use the combination of Bitcoin’s dominance and price behavior to obtain valid signals.

For example, in a situation where the price and dominance of Bitcoin are simultaneously experiencing an upward trend, traders prefer to rush into the king of cryptocurrencies; Because its movement power is higher compared to other cryptocurrencies. On the contrary, when the Bitcoin price trend is increasing; But its dominance is waning, which means the season of altcoins has arrived.

In the third case, if Bitcoin is falling and its dominance increases, this situation indicates a bearish market for altcoins. Finally, when the price of Bitcoin and its percentage of dominance are in a downward trend in harmony, the entire cryptocurrency market will be in a downward trend.

The declared patterns are not completely definitive; But in many cases, they increase the chance of making a profit in the market.

Bitcoin mastery can also be used for risk management. For example, when the percentage of this indicator is increasing, traders can buy altcoins to sell in the foreseeable future to protect their capital.

How to see the dominance chart of Bitcoin and Altcoin?

By visiting the Trading View platform and searching for BTC Dominance or BTC.D in the symbols section of this site, you will see the Bitcoin Dominance chart. Similarly, to see the Ethereum dominance chart, you can enter ETH.D in Trading View.

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