Bitcoin dominance is the ratio between the Bitcoin market cap to the cryptocurrency market.
Bitcoin Dominance measures the total market cap of cryptocurrency comprised by Bitcoin. It helps to understand the trend of Bitcoin and altcoins.
In particular, it helps to understand if other coins are in an uptrend or downtrend against BTC. Using technical analysis, you should understand the logic behind it. You can create a profitable crypto portfolio.
Bitcoin Dominance explainedÂ
Bitcoin is the largest cryptocurrency by market capitalization. It dominated the crypto market with its huge trading volume. Hence, Bitcoin Dominance is the ratio of Bitcoin to altcoin in terms of the capitalization of the crypto market cap.
It helps to understand the trend of other altcoins in the market. Almost a decade earlier, in 2013, Bitcoin dominance was almost at 100%.
Bitcoin was the first asset introduced in the crypto market and had the largest share in the market capital. It dominated the crypto market with many followers. Though the dominance of the BTC has come down, it still leads the crypto market in terms of market capitalization. Â
Through a simple illustration, you can understand Bitcoin Dominance.
- If the total market cap of all crypto is at $100 billion, of which the Bitcoin market cap is $60 billion, the Bitcoin Dominance will be 60%.
- It is easier to gain more insight into it when the Bitcoin Dominance chart and the Market Capitalization chart are studied together.
Bitcoin inventor Satoshi Nakomoto designed cryptocurrency as an alternative to a traditional banking transaction. The digital coin gained immediate interest and became the best crypto to invest in. Investors were richly rewarded by the vast price swings in the volatile crypto market aided by the Bitcoin Dominance Chart.
But with new entrants in the market introducing new coins, the crypto sector shows vast expansion. You can trade crypto coins on many exchanges. One of the best crypto exchanges is the Voyager crypto. The Voyager crypto is an exchange that gives you access to around 57 currencies. Voyager crypto platform supports Bitcoin, Litecoin, Ethereum, etc. Â
BTC Dominance since 2013Â
Bitcoin remains the worldâ€™s largest cryptocurrency in the crypto market and the best crypto to invest in 2021. BTC continues to lead other cryptocurrencies in terms of market capitalization, followers, and usage. Bitcoin Dominance CoinMarketCap has kept track of Bitcoin dominance for many years.
In 2013, it was the first digit asset and dominated the digital currency markets with 100% dominance. It found widespread adoption and continues to dominate despite high competition from altcoins.
- Bitcoin had almost no competition by the end of 2013, where its market dominance moved slightly lower to 94%. Ethereum did not exist in that period. At this time, the ERC tokens were not there, neither were other blockchains.
- In 2017, it had a market dominance of 85.4%. Ripple XRP shared 1.1%, and Ethereum had a market cap of 5.7%. Ethereum was launched in 2017 and made it easier for other ICOs to launch and gain investor interest.
By June 2017, BTC dominance fell to 40% with many ICOs or initial coin offerings. Many expected Ethereum to overtake BTC, though it did not happen.
- In 2018, the volatile price movement in BTC pulled its market cap lower to 32.8%.
- In 2019, BTC dominance once again surged to 70% after the bullish bubble.
- In 2020, Bitcoin made up almost 60% of the market cap in the crypto sector.
- In 2021, the value of Bitcoin was at 40%, which is $2.3 trillion of the total crypto market cap. In 2021, Bitcoin value dropped 12%, while Ethereum value rose 5%. Returns from Bitcoin are not as profitable as other cryptos like Ethereum, Dogecoin, Litecoin, and Ripple.
In 2013, Bitcoin dominated the crypto industry. It was a trendsetter, which inspired followers to bring in new cryptocurrencies with newer features. With new altcoins, BTC is losing its dominance. One of its close competitors is Ethereum. When altcoins gain a higher market share, Bitcoin dominance reduces.
Bitcoin prices have a volatile trading history. Â
Bitcoin saw a volatile movement in 2013. It started the year at $13.40 but went to $220 by April 2013.
- Bitcoin prices were at $123 in October 2013 but surged sharply to $1,156 in December. But within three days, it was at $760.
- In 2017, the cryptocurrency started the year at the $1,000 price range. In March 2017, it was trading at $975, but on December 17, Bitcoin prices were at $20,000.
- Another rally started during the 2020 pandemic. Prices were at $10,000 in February 2020 but dropped almost 50% in March 2020, towards $5,000. It spiked sharply towards $30,000 by the end of the year.
- 2021 saw another volatile move in prices. In January 2021, BTC prices were at $30,000. In April, it touched a life high of over $63,000.Â
- In June, it slipped below $30,000, losing 50% of its value from life-high prices.
Positives of Bitcoin DominanceÂ Â
Bitcoin Dominance Chart Coingecko shows the power of BTC in the crypto world. Bitcoin continues to dominate the crypto space in terms of the crypto market cap, despite new crypto tokens and coins entering the market. Bitcoin is a healthy crypto-token in terms of market cap, price, and usage. It attracts a lot of investment.
- Bitcoin Dominance Coingecko shows the trust of traders, retail investors, and institutional investors who enter the crypto industry. New regulations to curb speculation help to build investor trust.
When you are trading in popular currencies like Bitcoin, Ethereum, Bitcoin Cash, and Litecoin, you can choose the Geminin exchange. It is one of the cryptocurrency exchanges that come under US regulations. You can store and trade your crypto holdings with Gemini exchange.
- BTC is used as a store of value and as a hedge against inflation. Though it has not been in mainstream traction, it continues to charm investors as it is considered â€śdigital goldâ€ť on par with the yellow metal.
Negatives Of Bitcoin DominanceÂ
Some analysts take theÂ Bitcoin dominance with a pinch of salt, saying that it does not reflect the true value of the coins, especially in the performance of altcoins.
- As a measurement of the market cap, it represents the total number of tokens circulating in the current market price. Analysts argue that its dominance cannot be exactly calculated as most Bitcoin tokens remain idle in wallets or people have lost them through hacks or lost their private keys absentmindedly.
- Bitcoin dominance is very easy to manipulate, as seen through the volatile price movement in 2017 and more recently in 2020 and 2021.
Crypto Reddit users say that cryptocurrency is largely driven by hype. Tech news and reviews posted on crypto Reddit forums have brought large volatility that has helped in Bitcoin dominance. Crypto news drives the crypto volume and brings in large price swings.
Though Bitcoin dominates the crypto market, I would suggest you refer to Chainlink-crypto for better crypto news. Chainlink crypto aims to provide real-world data to users on smart contracts on Blockchain. Chainlink crypto gives information about the world of Blockchain to the outside world.
- Bitcoin Dominance meaning is losing steam with heavy competition from new altcoins.
- Pi cryptocurrency Network is said to be the next Bitcoin. You can mine Pi cryptocurrency with your mobile phone.
- Traders find heavy competition from other upstart cryptos. The valuation of new crypto assets surges higher, while the Bitcoin movement is not very rewarding.
Criticisms of Bitcoin Dominance IndexÂ
Bitcoin Dominance Index will one day lose its supremacy when other coins eventually take over.
- Value is slowly flowing from Bitcoin tokens to other currencies, and the Bitcoin Dominance Index is also losing its sheen. There are several altcoins already in existence, and new coins are floated every day with better functionalities.
- New trends in the crypto market world, such as DeFi, give importance to Ethereum. New digital assets with better features attract users. It is bringing down Bitcoin dominance.
Bitcoin is first generation crypto that was the first to introduce the digital coin to the world. ADA crypto is third-generation crypto that handles infrastructure problems and scaling that are related to Bitcoin. ADA crypto is a Blockchain-based computing platform used for distributed computing and financial transactions. It is one of the leading cryptocurrencies of 2021 as it maintains its upswing action despite market volatility amid the slump in the crypto market in 2021.
- Crypto mining uses up a lot of electricity. As the Bitcoin prices rise, the amount of energy consumed is also high. China has curbed the electric power supply for crypto mining, which rocked the crypto market in June 2021.
- Other Blockchain assets like ether are setting all-time highs recently. The value proposition of Ethereum is gaining strength and attracts the attention of traders and institutional firms.
What Is A BitcoinÂ DominanceÂ Chart?Â
The Bitcoin Dominance Index shows the dominance of Bitcoin in the cryptocurrency economy. CoinMarketCap.com publishes the â€śBitcoin Dominance Indexâ€ť.
- You can read the Bitcoin Dominance CoinMarketCap.com or on TradingView.com. The chart helps to understand the correlation with market cycles.
- To understand the Bitcoin Dominance Binance meaning better, we need to study it along with the crypto Market Capitalization chart available at tradingview.com,
- Using standard tools, we can analyze these charts to enter the market at the right time and reap profits. Remain updated on the Bitcoin supply, key events and regulatory changes, integration of new payment schemes within banking frameworks, and press statements. Bitcoin supply is limited to 21 million. As there is a limited supply of Bitcoin supply, prices increase when demand increases and vice-versa.
Once you study the charts, you can start trading in the crypto that catches your eye.
- You can get real-time data on Cryptowatch via API, and you can cover over 4,000 markets through it. The Cryptowatch trading terminal provides charting and trading services for free over its 25 crypto exchanges.
- Kraken crypto users can connect to their Kraken account by using the free Cryptowatch trading terminal. Kraken crypto is a crypto exchange that is easy to use, especially for new crypto investors. It provides crypto guides for basic crypto trading, using your own trading style.
- While Coinbase supports around 51 options, Robinhood crypto offers only seven coins. But Coinbase charges a hefty fee while Robinhood crypto does not charge any fee. It provides commission-free trading.
A study of the charts has helped traders and investors make profitable decisions.
- From 2017 to 2018, the BTCD lost almost 50% of its value within the first week of December 2017 and January 2018. It saw a sharp drop from 71% to 35%.
- In April 2021, the Bitcoin Dominance Rate broke down the long-term support zone. Traders understood that it would bring a rise in altcoin prices across the market.
- In 2021, the downward move in the BTC dominance points to the bullish uptrend in the Ethereum pair.
The largest cryptocurrency is the most liquid crypto and well-established crypto in the crypto space and is the reason for the Bitcoin Dominance Coingecko.
What is the Bitcoin Index?Â Â
Bitcoin Index gives an insight to traders on the crypto market. It helps to assess the sentiment of traders. Â With the Bitcoin Index, you can measure the relative demand for Bitcoin to that for other altcoins. Traders can understand the risk aversion in the market and gather valuable information from the index.
To gain exposure to Bitcoin, you can
- Trade Bitcoin Derivatives
- Buy Bitcoin through an exchange
- Use Crypto 10 Index
How is the Crypto Market Volume Calculated?Â Â
You can calculate the crypto market volume by multiplying the Prices and the Circulating Supply.
Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Market Cap = Price X Circulating Supply
Circulating Supply gives the number of coins in circulation in the market and with the general public. It is an approximate value.
The market volume of an exchange is the total volume of the coin in that exchange.
The market cap of Bitcoin is the total value of the coins mined. You can multiply the number of circulating coins by the current market price of a single Bitcoin. Â
How The Dominance Chart Differs FromÂ Coinmarketcap?Â
- The CoinMarketCap provides Bitcoin Dominance Index by keeping track of the total market cap of Bitcoin with the total market capitalization of other digital assets.
- CoinMarketCap is one of the most trusted sources that investors and institutions can use to compare crypto assets. It is a price-tracking website in the crypto space for crypto assets.
Using the Bitcoin Dominance Chart To Your AdvantageÂ
You can use the BTC Dominance Binance to your advantage during an uptrend and downtrend.
- When Bitcoin Dominance is on an uptrend, it is best if you are in Bitcoin
- When Bitcoin Dominance is on a downtrend, it is best if you are in alts like ETC, mid caps, large caps, and low caps.
As a crypto investor, you can refer to the Bitcoin Dominance Chart Coingecko as gentle guidance on how much capital you can allocate to altcoins.
Many cryptocurrency investors can remember well the altcoins boom in 2017. Successful people enjoyed almost ten times on their investments portfolio. Not surprisingly, due to the growing interest in the cryptocurrency market this year, many people are investing in altcoins again. However, such investments are generally underperforming investments in Bitcoin.
The share of Bitcoin in the total capitalization of cryptocurrencies has been steadily growing from 2017 to 2021. There are fundamental economic reasons for this phenomenon. First of all, it is the growing adaptation of the largest cryptocurrency by the investment community. The option to buy and store Bitcoin is already developing classical investment giant Fidelity. Currently, active preparations are underway for the Bakkt deliverable futures platform, which, according to many analysts, could become one of the key milestones in the development of the cryptocurrency market.
However, even the most durable trends in the financial market are changing direction. Sooner or later, altcoins will be able to take back at least a part of the lost position again. Traders should meet this time prepared.
What Is UsefulÂ ForÂ A Trader Bitcoin Dominance ChartÂ
In this guide, we offer a simple method to optimize your performance to earn Bitcoin. YouÂ have to make a simple technical analysis of the Bitcoin dominance today. When the demand for Bitcoin is higher, you will earn on a mono position. When altcoins become a favorite of the market again, you will not miss the moment to make money.Â Â
The Bitcoin dominance chart is easy to access on the popular platform for technical analysisÂ https://www.tradingview.com. To select the desired chart, you just need to enter the BTC.D ticker into the appropriate form.Â
This chart does not display the price of any particular financial instrument. It is calculated directly by the TradingView platform and only demonstrates the percentage of Bitcoin in the total capitalization of the cryptocurrency market. Thus, BTC.D shows the current balance of demand in the cryptocurrency market.Â
As a trader, if you want to get returns on your investment, the DeFi crypto or Decentralized Finance is best. The DeFi crypto provides competitive interest rates when you want to generate returns as they give higher interest rates than the traditional banks. You can start by buying leading cryptocurrencies like Bitcoin and Ether.Â
WhatÂ TheÂ Graph Shows NowÂ
It is advisable to start the analysis of the current situation with a weekly timeframe. It will give an overall view of the global situation.Â
We see that in 2018 the long uptrend began. It is important to note that the dominance of Bitcoin grew during the period of a long-term market correction, which lasted throughout 2018.
Bitcoin dominance shot up from 37.5% in 2018 to 72% in 2019. It was a sharp move upwards. The value of other coins gradually increased from 10% to 30%.
In 2020, Bitcoin dominance saw a gradual slowdown, while the value of other coins rose to 39%.
In 2021, Bitcoin dominance saw a sudden slide to 40%, on par with the value of other coins.
With the help of the graph, you have to understand the next move of the crypto cycle.
- Decide whether to go long or short, which depends on the current market sentiment.Â
- Make use of risk management tools like stops and limits.Â
- Use technical indicators to determine the next movement of Bitcoin prices.Â
- Study market conditions like market sentiment and market volatility.Â
- Book your profit or cut your loss.Â
The best crypto wallets to hold your Bitcoin and protect your asset are Exodus Bitcoin, Trezor T, Ledger Nano X, Wasabi Wallet, etc. Payment apps such as PayPal require a basic wallet for holding your crypto coins. With PayPal crypto, you can make payments and store your payment keys to send crypto coins to other users.Â
Â Selecting Entry PointsÂ
If you are not a long-term investor, you can consider the possibility of speculative relocation of part of the capital in altcoins during BTC.D corrections. To clarify the method, we turn to the 1D time frame.Â
First, you have to choose your trading style.Â
- Day Trading Strategy
- Trend Trading Strategy
- Bitcoin HedgingÂ
- Buy and Hold (HODL) Strategy
Study the current trend while trading. If it is a bullish trend, you have to stay long. If the trend is bearish, you have to go short.Â
You can refer to the Reddit crypto forum as it mentions Bitcoin and its prices, attracting new users. The spike in prices in 2013 and 2017 garnered more users into the crypto world through the Reddit crypto forum.Â
The Graph crypto facilitates the exchange of data between applications and blockchains. It also plays a pivotal role in promoting Bitcoin dominance today. Once you start your journey into the digital currency world, you should know the best crypto wallet to store your Bitcoin or altcoins. It helps you to keep your digital money in a safe and secure crypto wallet.Â
CoinTracker is a portfolio tracker and also a tax calculator. You can view your entire crypto portfolio from multiple crypto exchange wallets with CoinTracker. It tracks every crypto transaction from all your accounts.
If you plan to make it big in the crypto sector, you should compare between cryptocurrency exchanges. BitBoy Crypto keeps investors updated on the world of cryptocurrencies. Before investing in cryptocurrency exchanges, BitBoy crypto recommends looking into factors like payment methods, fees, and reputation. It will help you select the best deal for your investment.Â
Â BTC Market Cap Dominance Closer Chart OverviewÂ
Here the author is turning to his trading practice. I use a simple strategy for intra-channel trading. On reaching the upper border of the channel, I will sell part of my holdings in BTC. I will then invest in 3 to 4 top altcoins. I close my positions in altcoins again when the price crosses the 20 MA from the bottom up or when it reaches important support lines. Also, local support lines inside the channel help identify the breakdown, which is also a good signal.Â Â
For such speculative earnings, I use from 10% to 20% of the cryptocurrency portfolio. The share of altcoins remains small since the global trend is still bullish. It is a signal that the altcoin season has come, and I can increase their share in the portfolio to 50-60% if there is a breakdown of the lower border of the ascending channel.Â Â
When you want to buy, store, spend and sell cryptocurrencies, Gemini crypto is the best cryptocurrency platform. You can use it with a mobile app or a website. The Gemini crypto supports trading in more than 40 cryptocurrencies.Â
It also has its own Gemini stable coin. You can buy Bitcoin, Ether, and Litecoin with US Dollars.Â
Summarising the indexÂ
The key role played by Bitcoin in the crypto economy helps investors gather valuable information about the trend in the market. Bitcoin is also known as digital gold as it is an alternative safe-haven asset.
Analysts believe that the crypto market has much further to run, and Bitcoin dominance will play a critical role in this transition. Bitcoin is one of the best cryptocurrencies to invest in 2021. As major cryptocurrencies face a downturn, it would be the best opportunity to â€śbuy the dipâ€ť.
It is important to note that my underlying asset in crypto trading is BTC, in which I measure my profit. If your underlying asset is USD, the strategy is a little more complicated. In this case, you can refer to the cryptocurrency market capitalization chart, which can be found on tradingview.com by a TOTAL ticker.
In the end, I will say that the above strategy is far from the only and, probably, not the best on the market. The purpose of this article is to draw the attention of traders to the additional indicator that helps to improve their crypto trading performance. Eventually, everyone will be able to adapt their strategy for using the Bitcoin Dominance chart.
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