I remember back when I just got in Crypto, I was always hearing stuff like;
"Bitcoin Dominance is rising"..................
"Bitcoin Dominance is falling"..................
"Bitcoin Dominance this"............................
"Bitcoin Dominance that"............................
If you're a noob like I was then, then I'm sure you've probably heard something along these lines in the past. But what exactly does Bitcoin Dominance even mean, and how does it affect the market and when to buy and sell Bitcoin?
Bitcoin Dominance is simply the ratio of the Bitcoin market capitalization compared in relation to the total market capitalization of all other Cryptocurrencies, you can call them all alt coins. It is simply put the ratio between the market cap of Bitcoin to the rest of the cryptocurrency markets.
The entire Cryptocurrency market as at the time of this writing stands at a market cap of $346 billion. Of that crazy amount, Bitcoin as the top dog has a market cap of $206.9 billion. After working the maths, you can also simply just check Coingecko for this, we see that Bitcoin is dominating the market by around 59.8%.
Now this figure is low by Bitcoins standard. That in a way is why many believe that we are entering Alt coin season. Back when Bitcoin was the only traded Cryptocurrency, the Dominance was close to 100%. It later dropped with the coming of a lot of other Cryptocurrencies, but the Bitcoin dominance is expected to be somewhere around 63-65%, anything below that means that Alt coins are gaining attention.
If the dominance is dropping, just like it is now, that means people are losing confidence in Bitcoin and instead going for other Cryptocurrencies and by extension Alt coins. While if it is rising, the reverse is the case, people are abandoning Altcoins are gaining so much confidence and pumping money into Bitcoin.
I sure hope I've helped you understand what Bitcoin Dominance means. If you learnt from this, be sure to give me a follow. Thanks my friends.
