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💸Do you want to understand when the market rises? When do alternative currencies move?
💱The answer starts with Bitcoin dominance!
🖥What is Bitcoin dominance?
Bitcoin Dominance
Is the percentage that represents the market value of Bitcoin compared to the total market value of all cryptocurrencies.
This indicator is used to measure the impact and strength of Bitcoin in the market, and it can change based on:
Changes in currency prices.
The introduction of new currencies.
The movement of liquidity between Bitcoin and alternative currencies.
🛡How do we calculate Bitcoin dominance?
The formula is simple:
Bitcoin dominance ratio =
(Bitcoin market value ÷ Total cryptocurrency market) × 100
🔍Example:
If the Bitcoin market value = $500 billion.
And the total market value = $1 trillion.
Then the dominance ratio = (500 ÷ 1000) × 100 = 50%
▶️Why is this important?
High dominance = investors prefer Bitcoin → alternative currencies are weaker.
Low dominance = liquidity moves to alternative currencies → opportunity for their rise.
Monitor this indicator to know the market direction accurately!
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