Bitcoin Dominance in simple terms:
It is the percentage of Bitcoin’s market value compared to the total market value of cryptocurrencies. In other words, this indicator shows what share Bitcoin has of the total cryptocurrency market.
Example: If the total cryptocurrency market value is $1000 billion and Bitcoin’s market value is $500 billion, Bitcoin’s dominance is 50%.
Why is it important?
High dominance: It means Bitcoin is stronger than other currencies (altcoins) and investors trust Bitcoin more.
Low dominance: It means altcoins are growing and investors are also interested in other currencies.
When does it change?
Increasing dominance: Usually when the market is down or investors are looking for more security, they turn to Bitcoin.
Declining Dominance: When the market is bullish and people are looking for more profits from altcoins.
