.png "What is BTC Dominance (BTC.D)?") |
How to calculate BTC Dominance (BTC.D)
Formula for calculating BTC Dominance:
BTC.D = Bitcoin (BTC) Field Variable ÷ All Other Cryptocurrencies Field Variable
Example: Total market capitalization of Altcoins is $1,600 Billion and BTC market cap is $700 Billion
=> BTC.D = 700 1,600 ≈ 43.8 %
BTC Dominance (BTC.D) Tracker
You can easily track BTC.D at some popular websites such as: TradingView, CoinMarketCap, CoinGecko, Coin360,...
BTC.D Trading Strategy
Combining the Bitcoin Dominance ratio and the BTC price can we determine what the current market trend is? Should you invest in Bitcoin or altcoins?
Case 1: When BTC Dominance increases - Correspondingly, BTC price increases.
If the Altcoin price increases, it means that a new amount of money has poured into the market, causing the market capitalization to increase simultaneously.
If the Altcoin price drops, this is when the money flows from Altcoins to Bitcoin. Investors who are investing in Altcoins feel that it is time to take profits on these coins, so they decide to sell them, buy back Bitcoin.
Case 2: When BTC Dominance decreases - Correspondingly, BTC price decreases. If the Altcoin price falls, this is considered the worst scenario of the market - the Dowtrend period. The market capitalization simultaneously decreased.
How to take advantage of BTC Dominance?
With Altcoins: Buy Altcoins when Bitcoin Dominance is high (at this time Altcoin Dominance will be low) and take profits when Bitcoin Dominance bottoms (at this time Altcoin Dominance will increase).
With Bitcoin: Buy BTC when Bitcoin price increases and BTC.D rate increases. This means that the inflow to BTC is increasing again. At this point, you should consider buying BTC to make a profit or take profit if you are holding BTC.
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