What is Bitcoin Dominance? Bitcoin dominance is the percentage of the total cryptocurrency market’s value that is made up by Bitcoin alone. It’s a key metric that suggests how much of the crypto market is controlled by Bitcoin. For example, Bitcoin dominance is currently at . This means that of the total market value is …
Bitcoin dominance is the percentage of the total cryptocurrency market's value that is made up by Bitcoin alone. It’s a key metric that suggests how much of the crypto market is controlled by Bitcoin.
For example, Bitcoin dominance is currently at 57.01%. This means that 57.01% of the total market value is in Bitcoin.
It can be calculated using the following formula:
(Bitcoin Market Cap / Total Crypto Market)*100 = Bitcoin Dominance 👇
( $1,595,006,489,853 / $2,797,663,482,886 ) * 100 = 57.01%
When Bitcoin launched in 2009, it was the only cryptocurrency in the market. If you look at the Bitcoin Dominance chart above, it started around 100% and has gradually decreased over time (as more and more coins started to launch and gain traction).
Bitcoin dominance is a relatively straightforward concept but can be used as an indicator of market sentiment.
Since Bitcoin is viewed as a safer asset, investors tend to shift to $BTC during uncertain times, raising its dominance. This rise often signals bearish market sentiment as people move away from riskier altcoins.
Conversely, when Bitcoin dominance declines, it suggests confidence in the broader market,with investors exploring altcoins—indicating a bullish outlook.
Altcoin Dominance is simply the inverse of Bitcoin Dominance, representing the share of all other cryptocurrencies (like $ETH, $SOL etc.) compared to the total market. While $ETH and $SOL are often called “majors,” we still classify them as altcoins for simplicity here.
If you haven’t joined the two dots already, Bitcoin Dominance and Altcoin Dominance are inversely related:as Bitcoin dominance rises, altcoin dominance falls (and vice versa).
Even though the metrics are inversely related, they both can act as an indicator for market sentiment.
An uptrend in Altcoin Dominance is also known as “Altcoin Season”. Altcoin Season is essentially Christmas for crypto traders (except all the ugly sweaters have been swapped out for volatility).
Long story short, if you see Bitcoin Dominance on a downward trend, you can expect Altcoin Season to be kicking in soon. 👀
Bitcoin Dominance is currently at [bitcoin_dominance] but the real key is understanding its trend when making investment decisions. The chart on this page breaks down weekly, monthly, and yearly trends for Bitcoin Dominance, giving you a clear snapshot of the market’s direction.
Bitcoin dominance can be influenced by a variety of factors such as short-term and long-term catalysts for Bitcoin, investor sentiment and regulatory news.
Bitcoin Dominance can indicate long-term market direction: an upward trend often suggests a bearish outlook, while a decline points to a bullish shift. However, this is not foolproof—never rely on a single indicator for investment decisions. Always consider multiple factors before making a move. Too lazy to track them all? We've got you covered—subscribe to Milk Road's daily newsletter for the latest insights!
Just as gold has long been the go-to hedge against inflation, many investors are now looking to Bitcoin to serve a similar purpose. Along with Bitcoin, stablecoins are also a great solution for countries suffering from hyperinflation.
When launched, Bitcoin was the only cryptocurrency in the market and hence held 100% of the market. Over time, more coins have launched and gained traction leading to a downtrend in Bitcoin Dominance over the last decade.
Bitcoin Dominance typically fluctuates between 40% and 60% during a bull market. At the beginning, it might rise to around 60-70% as investors prioritize Bitcoin, the most established asset. However, as the bull market matures and more investors rotate into altcoins for potentially higher gains, dominance can drop to 40% or lower, signaling "Altcoin Season." For example, during the 2017 bull run, Bitcoin Dominance fell from over 60% to below 40% as altcoins surged. In the 2021 bull run, it dropped from around 70% to roughly 40% during peak altcoin activity.
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