26/03/2022
BTC dominance is the percentage of capital invested in BTC from Total Capital invested in the entire crypto market.
If $2 Trillon are invested in the entire market and out of these $2T, $0.8 Trillion are invested in BTC
BTC dominance will be (0.8/2) × 100 = 40%
How does BTC DOMINANCE work ?
BTC dominance rises in 2 cases:
1 -When new funds are added into the BTC
2 -When funds are moved from ALT coins to BTC
Whenever we see BTC pumping and ALT coins lagging behind (moving slow) it's because people are moving their funds from ALTS to BTC. Hence BTC.D pumps.
Whenever ALTS and BTC pump together, it's because new funds are added to market! BTC.D pumps in this case as well but due to more funds, ALTS are not affected much.
When is BTC DOMINANCE expected to rise?
When market consolidates between a specific range, the situation is either a breakout or breakdown. To stay safe, traders move their funds from ALTS to BTC because BTC is a safe and reliable option, hence BTC.D rises and that's the reason you guys might have witnessed when market makes a sudden pump of $3000-$4000 after some consolidation ALTS are almost at same price.
Whenever BTC.D is rising and BTC is falling, ALTS will bleed at faster pace. This is because people will move their funds from ALTS to BTC due to market fear which will result in the market cap of ALTS falling and because BTC is the king of market and ALTS follow BTC, so they will fall as well due to BTC falling. Due to these 2 reasons, ALTS bleed more.
ALTS SEASON?
Whenever BTC.D falls and BTC rises, it explains funds are added to both BTC and ALTS but more funds are added into ALTS. It's because people are interested in trading ALTS more than BTC hence ALTS pump much faster and this time period is knows as ALTS SEASON.
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