BTC Dominance (btc.d) is understood as the dominance ratio of Bitcoin compared to the rest, more specifically, the percentage of market capitalization that Bitcoin occupies on the total market capitalization of the entire cryptocurrency market. This ratio reflects the level of dominance and superiority of Bitcoin over other altcoins in the market.
The BTC Dominance ratio is calculated based on the market capitalization of Bitcoin compared to the total market capitalization of the entire cryptocurrency market worldwide. Therefore, if the market capitalization of Bitcoin is higher compared to other altcoins, the BTC Dominance ratio will be higher. For example: there was a time when the market capitalization of Bitcoin reached 9 billion USD, while the total of all other altcoins was only 1 billion USD, we have the following calculation:
BTC Dominance = 9 / (9 + 1) = 90%.
Bitcoin is considered the 'original currency' of the cryptocurrency market. Most people must buy Bitcoin or USDT if they want to participate in the cryptocurrency market as well as convert from altcoins to Bitcoin to preserve capital when altcoins drop sharply. In the cryptocurrency market, there are usually 4 scenarios that occur:
1. The price of Bitcoin increases, pulling the entire market up. This is the best scenario that everyone wants to see, meaning that market confidence rises, and big players pour money en masse into Bitcoin and altcoins.
2. The price of Bitcoin rises while altcoins fall. This is a scenario where money flows from altcoins or from outside the market into Bitcoin only.
3. The price of Bitcoin decreases, dragging the market down. This is a scenario you often see, it can be said to be a default because when the king is ill, the entire court will waver.
4. The price of Bitcoin remains stable or decreases, while the price of altcoins also remains stable or increases. At this point, Bitcoin is stable, gathering strength, and will start a new price increase for altcoins. It can last for 1-2 years, but I think it will only last for 1 year.
