😋Important table for every cryptocurrency trader
Understanding the core components of the table:
The table consists of three main columns:
🟣 Value of Altcoins: Reflects the performance of other cryptocurrencies that are not Bitcoin.
🟣. Market value of Bitcoin (BTC): Represents the price or market value of Bitcoin.
🟣. Bitcoin Dominance: The percentage that Bitcoin represents of the total market value of cryptocurrencies.
Purpose of the table:
Shows the relationship between:
🌟- Bitcoin dominance (BTC.D).
🌟- Bitcoin price (BTC).
🌟- Their impact on the performance of altcoins.
Step-by-step analysis of the table:
🟠 Why does Bitcoin rise while altcoins fall?
- Reason: Increase in Bitcoin dominance (BTC.D).
- Interpretation: Liquidity moves from altcoins to Bitcoin, leading to a decline in their value (line one in the table).
🟠. Why do altcoins drop sharply when Bitcoin drops?
- Reason: Increase in Bitcoin dominance (BTC.D) while Bitcoin price (BTC) decreases.
- Interpretation: A drop in Bitcoin is accompanied by a shift in liquidity away from altcoins, exacerbating their decline (line two in the table).
🟠. When do altcoins rise and recover?
- Basic condition: Decrease in Bitcoin dominance (BTC.D).
- The only two scenarios:
- Scenario One: Bitcoin dominance decreases while its price stabilizes or increases (line four).
- Scenario Two: Bitcoin dominance decreases with limited drop in its price (line six).
- Interpretation: A decrease in dominance means liquidity is shifting towards altcoins, supporting their rise.
🥳Practical benefit:
By understanding this table, you will be able to:
✅- Anticipate movements of altcoins (positively or negatively).
✅- Understanding market dynamics based on Bitcoin's behavior and its dominance.
⭐️⭐️⭐️ Final advice:
Always monitor Bitcoin dominance (BTC.D) alongside Bitcoin price (BTC) to accurately determine the overall market trend and altcoins.
