Dominance of Bitcoin: the Game of Thrones of the Cryptocurrency World

I have been watching the crypto market for several years, and I will say it outright – the Bitcoin dominance indicator simply annoys me with its fundamental inaccuracy! But there is no way around it – it is a key barometer of the sentiments of the entire market.

Let's be honest: the domination of BTC is just the percentage of the total capitalization of the crypto market that the first coin occupies. The formula is simple:

BTC capitalization / Total capitalization × 100%

I look at the current 52% and realize that the "king" still holds the crown, although battered. Once upon a time, before all this altcoin mayhem, the figure was close to 100%! Times are changing, and power is gradually dissipating.

Why keep an eye on this number at all?

Honestly? To understand when the altseason will start – that time when you can make x's on shitcoins! When dominance falls – money flows into alts, when it rises – everyone runs under the wing of "daddy Bitcoin".

Many traders on the platforms study the BTC.D charts like a mantra, hoping to catch the beginning of the altseason. I remember how in 2021, when dominance dropped below 40%, a real madness began – some coins rose by hundreds of percent in just a few days.

Where to watch and how to interpret?

I usually open the BTC.D chart on popular analytics services. The interpretation is simple:

• The line is rising – BTC is in favor
• Falling – running after alts
• Stands sideways – the market is in confusion

What will happen to the dominance this year?

Currently, the dominance is around 52%, and to be honest, I do not believe the forecasts of major analysts. Too many factors influence this indicator.

If a strong bear market starts, dominance could rise to 60% because in moments of panic, everyone rushes to the relatively "safe" Bit. And if the investment frenzy continues – expect a drop to 40% or even lower.

At the same time, I have always been amused by how the factor of stablecoins is ignored in this indicator. After all, they also "pull" market share!

Influence on Trading Strategies

When dominance starts to fall, I immediately convert part of my portfolio into promising altcoins. But not all! Only naive newcomers think that "altseason" means the rise of ALL altcoins. In reality, many of them continue to fall relative to BTC.

And when the dominance starts to rise – that's my signal to take profit on altcoins. I've burned myself too many times by ignoring this indicator.

Another trick: if the price of BTC is rising while dominance is falling, it means altcoins are rising even more. A great moment for speculation!

It's amusing to observe how some projects attempt to challenge Bitcoin's hegemony. Sometimes Ethereum claims the "flippening", sometimes Solana claims "high throughput". But so far, all these attempts end the same way – BTC remains number one.

And while I am skeptical of maximalists claiming that "there is only Bitcoin", one cannot deny its fundamental influence on the entire market. The rest is simply a game of catch-up for now.