1. What is Bitcoin dominance?
Bitcoin dominance measures Bitcoin’s market capitalization as a percentage of the total crypto market value. It shows how much of the broader market is represented by BTC.
2. How is Bitcoin dominance calculated?
The formula is Bitcoin market capitalization divided by total cryptocurrency market capitalization, multiplied by 100. Bitcoin market cap itself equals BTC price multiplied by circulating supply.
3. What does rising Bitcoin dominance mean
Rising dominance usually means Bitcoin is outperforming the broader crypto market or falling less sharply than altcoins. It can indicate that investors are favouring BTC over higher-risk assets.
4. Does falling Bitcoin dominance mean altcoin season has started?
Not necessarily. Falling dominance can indicate capital rotation into altcoins, but stablecoin growth can also reduce Bitcoin’s market share without confirming a broad altcoin rally.
5. Why should investors track Bitcoin dominance?
Bitcoin dominance can help identify changes in market leadership and risk appetite. It is most useful when combined with ETF flows, stablecoin supply, trading volume and altcoin market breadth.