This article will explore the meaning of and the relevance of Bitcoin dominance on TradingView. Bitcoin dominance denotes a cryptocurrency’s market share.
This metric helps ascertains the cryptocurrency’s comparative strength to the altcoins. Investors use TradingView to monitor and record BTC.D charts to make market forecasts, assess the performance of altcoins, and make informed trading and investment decisions.
What is Bitcoin Dominance?
Bitcoin dominance describes the portion of the total market cap for cryptos that is allocated specifically for Bitcoin (BTC). Simply put, Bitcoin dominance describes Bitcoin’s market cap in relation to the entirety of the crypto market and all other crypto assets.
For instance, if the entire crypto market is worth 2 trillion dollars and Bitcoin’s cap is worth 1 trillion dollars, the dominance would be 50%. This is useful to traders and investors as it shows the relation Bitcoin has to altcoins and can be valuable for developing investment strategies.
Why Bitcoin Dominance Matters?
Bitcoin dominance is seen as an important metric in the cryptocurrency market rationale as it almost always mirrors the prevailing sentiment in the market.
An increase in dominance suggests that investors might be reallocating capital from altcoins to more dominantly traded bitcoins. This may suggest an environment whereby traders are more risk averse and prefer the stability of Bitcoin.
Counterintuitively, declining dominance could suggest that bullish sentiment is emerging towards altcoins as investors start diversifying into higher yielding cryptocurrencies. This depicts a more sophisticated approach to Bitcoin trading and more active altcoin investing.
How Bitcoin Dominance is Calculated
The computation for Bitcoin dominance is relatively straightforward.
Bitcoin Dominance (%) = (Bitcoin Market Cap ÷ Total Crypto Market Cap) × 100.
The total crypto market cap is defined as the market cap of all cryptocurrencies aggregated together. Market cap itself is defined as the price of a given cryptocurrency multiplied by the total amount of coins or tokens in circulation.
Bitcoin dominance is displayed in percentage form on platforms such as TradingView and is commonly depicted in charts so that users can gauge Bitcoin dominance changes over a specified period utilizing technical analysis.
Bitcoin Dominance on TradingView
Trading View is among the most used platforms for charting and even technical analyses as such has shoreded charts for Bitcoin dominance comparably as Bitcoin Dominance is often abbreviated as BTC.D on Trading View.
By looking at BTC.D, traders can monitor the fraction of Bitcoin holds in relation for the total market. It permits the users such as traders to exercise control over the various the Bitcoin dominance chart and then makes attempts at calculating its market control.
Accordingly, users can then apply other tools such as the moving averages, trend lines, and various technical indicators to Bitcoin dominance for further downstream prediction analysis.
Interpreting Bitcoin Dominance Charts
The evaluation of Bitcoin dominance charts requires the chronicling of shifts and patterns showing trends of interest and their accompanying levels. This is exemplified below.
Increasing BTC Dominance: Suggests Bitcoin appreciation at the expense of altcoins. Investors appear to be moving to Bitcoin in periods of market uncertainty.
Decreasing BTC Dominance: Implies greater confidence for altcoins, which is suggesting greater market share of altcoins.
BTC Dominance Remaining Constant: Implies the presence of some market equilibrium, where both Bitcoin and altcoins are moving together.
Bitcoin dominance charts are supplemented with price charts of BTC and other major altcoins for better trading strategies and prediction of market cycles.
Why is Bitcoin dominance Important?
Measures Bitcoin’s Market Share
Bitcoin market share measures the value of Bitcoin in the cryptocurrency market. It aids market investors to gauge Bitcoin’s supremacy in the market vis-a-vis the alternative coins.
Indicates Market Sentiment
Increasing dominance: Investors are very careful and risk-averse at this point.
Decreasing dominance: Investors who allocate capital to alternative coins exhibit a more risk-friendly approach.
Guides Investment Decisions
Investors are able to shift between Bitcoin and alternative coins depending on the surrounding market forces.
Predicts Altcoin Seasons
These periods are accompanied by a declining dominance of Bitcoin.
Bolsters Market Cycle Analysis
Market consolidation or bearish trends on altcoins come in with a rising dominance. Bullish periods for altcoins come in with a falling dominance.
Pros and Cons
| Pros | Cons |
|---|---|
| Measures Market Influence – Shows Bitcoin’s share of the total crypto market, helping traders understand its dominance. | Doesn’t Predict Exact Prices – Bitcoin dominance reflects relative market share but doesn’t guarantee Bitcoin or altcoin price movements. |
| Indicates Market Sentiment – Rising dominance shows risk-off behavior, falling dominance shows altcoin optimism. | Limited Scope – Does not account for stablecoins or small market movements that can affect the total market cap. |
| Helps Identify Altcoin Seasons – Declining dominance often signals opportunities in altcoins. | Shouldn’t Be Used Alone – Bitcoin dominance is just one metric and must be combined with other data like volume, trends, and market news. |
| Supports Portfolio Strategy – Investors can adjust allocations between Bitcoin and altcoins based on dominance trends. | Can Be Misleading in Short Term – Short-term fluctuations may not accurately reflect long-term trends. |
| Available on TradingView – Easy to track with charts, technical indicators, and historical data for analysis. | Not a Complete Market Indicator – Only shows Bitcoin’s dominance, not overall market health or investor behavior fully. |
Conclusion
In Conclusion, the total cryptocurrency market dominance by Bitcoin is represented within TradingView by Bitcoin Dominance( BTC.D). Traders trying to evaluate market perception, possible altcoin seasons, and altcoin market investments need to monitor BTC.D.
It, of course, should not be the only indicator used however, Bitcoin Dominance still is one of the first metrics to assess when considering market movement and constructing portfolio strategies.
FAQ
On TradingView, search for the ticker BTC.D. You can view charts, apply technical indicators, and analyze trends over different timeframes to understand Bitcoin’s dominance.
Yes. Beginners can start by observing trends in BTC.D charts. A simple approach is to monitor whether Bitcoin dominance is rising or falling and compare it with altcoin price movements to understand market trends.
Yes. A declining BTC dominance usually signals that altcoins are gaining market share, which often happens during altcoin seasons when altcoins outperform Bitcoin.
