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1. Beginner Course

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  1. 1. What are these cryptocurrencies?
  2. 2. Bitcoin - the story of a technological revolution
  3. 3. Satoshi Nakamoto, who is the creator of Bitcoin?
  4. 4. Vitaly Buterin – the creator of Ethereum
  5. 5. What is blockchain, and how does it work?
  6. 6. What is an NFT token?
  7. 7. What is money?
  8. 8. Cryptocurrencies vs fiat money, which will win?
  9. 9. What is DeFi (Decentralized Finance)?
  10. 10. DeFi: opportunities, advantages and disadvantages of decentralized finance
  11. 11. What is an altcoin?
  12. 12. Stablecoins - What are they?
  13. 13. Cryptocurrency wallet - what is it?
  14. 14. Why do we talk about bull and bear markets?
  15. 15. Security in the crypto market - what rules are worth following?
  16. 16. What is the seed phrase in cryptocurrencies?
  17. 17. Dogecoin and memecoin - what are they?
  18. 18. What is a Ponzi scheme?
  19. 19. What is a Soft and Hard Fork?
  20. 20. Blockchain - examples of use
  21. 21. Is blockchain safe?
  22. 22. What are the types of blockchain networks?
  23. 23. What is blockchain network congestion, and how does it work?
  24. 24. Cryptocurrency wallets: Hot Wallet vs. Cold Wallet - key differences!
  25. 25. Cryptocurrency wallet diversification
  26. 26. Halving Bitcoin - what is it, and how does it affect the price?
  27. 27. Blockchain versus databases: key differences!
  28. 28. How do you transfer cryptocurrencies?
  29. 29. The most important cryptocurrency acronyms/slang you need to know!
  30. 30. The memecoin story: madness or great investment?
  31. 31. What is Ethereum? 
  32. 32. Everything you need to know about gas fees in Ethereum!
  33. 33. Gavin Wood: Blockchain Visionary and Co-Founder of Ethereum
  34. 34. Decentralized Apps – what are they?
  35. 35. What is Proof of Work (PoW) and what is Proof of Stake (PoS)?
  36. 36. What is the Proof of Authority (PoA) consensus mechanism?
  37. 37. What is Proof of Burn (PoB)?
  38. 38. What is a whitepaper? What is its purpose, and how do you write it?
  39. 39. Smart Contracts - what are they?
  40. 40. Know your customer (KYC) and Anti-money laundering (AML) what are they in the cryptocurrency industry?
  41. 41. Blockchain and NFT games - how to make money on them?
  42. 42. Liquidity in the cryptocurrency market
  43. 43. Inflation and its effects on financial markets
  44. 44. What is stagflation and why does it have a negative impact on the market?
  45. 45. What are utility tokens and what use do they have in the cryptocurrency sector?
  46. 46. What is cryptocurrency mining?
  47. 47. What is the mining difficulty?
  48. 48. What is compound interest, and how does it work?
  49. 49. What Are Privacy Coins and Are They Legal?
  50. 50. What is CBDC - central bank digital money?
  51. 51. What is Cryptocurrency Airdrop all about?
  52. 52. Key differences between ICO, IEO and STO
  53. 53. What are decentralized DAO organizations, and how do they work? What are DAO tokens?
  54. 54. What is EURT? How does it work?
  55. 55. What is the difference between Circulating Supply and Total Supply?
  56. 56. Snapshot from the world of cryptocurrencies - what is it?
  57. 57. What is the Fear and Greed index for cryptocurrencies?
  58. 58. APR versus APY: what is the difference?
  59. 59. What is an Initial Farming Offer (IFO)?
  60. 60. What is Regenerative Finance (ReFi)?
  61. 61. Who Is Craig Wright, the Alleged Creator of Bitcoin?
  62. 62. What Is Bitcoin (BTC.D) Dominance?
  63. 63. Michael Saylor, Self-Proclaimed Bitcoin Maximalist
  64. 64. Bitcoin Pizza Day
  65. 65. AI blockchain - a new look into the future?
  66. 66. What is WorldCoin? Everything you need to know about this cryptocurrency!
  67. 67. Azuki NFT collection guide: everything you need to know about it!
  68. 68. The 10 most expensive non-fungible tokens (NFTs) ever!
  69. 69. The Bored Ape Yacht Club (BAYC) - the story of the popular NFT collection!
  70. 70. CyberPunks - the story of the most popular NFT collection in the crypto industry!
  71. 71. NFT Art: The digital art revolution - history and examples!
  72. 72. Who is Changpeng Zhao, CEO of Binance?
  73. 73. Who is Brian Armstrong - CEO of Coinbase?
  74. 74. Who is Galy Gensler and the SEC? How does the Securities and Exchange Commission (SEC) affect the cryptocurrency market?
  75. 75. Web3's most popular social media platforms! Will they replace the platforms we know?
  76. 76. What is IoT - the Internet of Things?
  77. 77. On-chain analysis in the cryptocurrency world: Everything you need to know about It
  78. 78. Can you pass on your cryptocurrencies after death? How do you pass on a cryptocurrency inheritance?
  79. 79. What is the Howey test? What application does it have in cryptocurrencies?
  80. 80. The use of blockchain technology in the world of sport
1. Beginner Course 62. What Is Bitcoin (BTC.D) Dominance?
Lesson 62 of 80
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62. What Is Bitcoin (BTC.D) Dominance?

Bitcoin dominance is one of the most important and very useful indicators that show us the movement of Bitcoin on a chart. In today’s lesson, we will discuss what exactly this Bitcoin dominance is and why it is so crucial, especially within technical analysis.

Bitcoin is the largest and most prominent cryptocurrency on the market currently. It holds significant influence over other digital assets, making it a crucial factor to monitor. By tracking the movement of BTC, valuable insights can be gleaned, providing information that can project the overall market trends.

Bitcoin Dominance – Definition

Bitcoin dominance (BTC.D) is the percentage of the entire crypto market capitalization that Bitcoin alone occupies. So if the entire cryptocurrency market capitalization is $1T and Bitcoin’s capitalization is $500B, we can easily calculate that Bitcoin’s dominance is 50%.

Definition: BTC.D is calculated as the ratio of Bitcoin’s market capitalization to the total market capitalization of the digital asset space.

It is not difficult to guess that at the very beginning of Bitcoin’s existence, its dominance was 100%. However, with the development of the market for digital assets, the emergence of more cryptocurrencies and tokens, its dominance is gradually declining.

Bitcoin dominance is a signal for traders to make changes in their investment strategies; no wonder, then, that BTC.D is such an important indicator.

Over the years, we have seen that whether Bitcoin’s price goes up or down, the rest of the crypto market follows it. So if you want to track the movement of Bitcoin and the entire digital asset market, use the indicator discussed today to do so.

Here’s an example. If BTC.D goes up, then Bitcoin has more total capitalization, and altcoins have less at the same time. That is, the price of BTC will go up and alts will go down.

What Can We Use the Bitcoin Dominance Index For?

To track the market. Simply put. BTC.D is a good signal to read where the current market is going and how we can optimize our investment strategy to maximize profit.

Effects of Bitcoin’s Dominance on the Crypto Market

If BTC dominance rises, and:

  • the price of BTC goes up, then altcoin funds flow into BTC.
  • BTC price goes down, then the entire cryptocurrency market goes down.
  • BTC price goes sideways, it means that investors realize profits from alts into fiat/BTC.

If BTC dominance falls, and:

  • BTC price goes up. Funds from the market flow into BTC. They can then pull altcoins and the entire market.
  • the price of BTC is falling, so the entire market for digital assets is going down.
  • the price of BTC is moving sideways, it means that money from the flagship cryptocurrency is going into altcoins. The price of Bitcoin going sideways tells us that there will be little impact on altcoins, allowing them to rise freely. This is the time when the price of fundamental altcoins goes up.

If BTC dominance is moving sideways, and:

  • the price of BTC is going up, meaning that money from outside the market is going into Bitcoin.
  • the price of BTC is going down, this means again that the entire cryptocurrency market is going down.
  • the price of BTC is going sideways, this gives investors a signal that Bitcoin is stagnant. Altcoin prices are rising, and Bitcoin is not affected.

How to Use BTC.D in Your Trading?

It is worthwhile to combine the BTC.D indicator with other tools to enhance our investment strategy. By considering Bitcoin’s dominance, we gain valuable insights into the market’s movement and the multitude of trading opportunities available. Integrating BTC.D with other indicators allows for a more comprehensive analysis, empowering us to make well-informed trading decisions and optimize our investment approach.

At the same time, you can use BTC.D charts to improve the quality of your technical analysis. It’s still a great way to enhance your investment strategy.

Advantages and Disadvantages of Bitcoin’s Dominance

  1. This is a great indicator with which we can track the cryptocurrency market.
  2. It is highly useful, especially when discussing Bitcoin’s movements. As the market leader, understanding Bitcoin’s dominance helps us stay informed about the prevailing trends and dynamics.
  3. It is not a foolproof indicator. So it must be used with other tools.

Bitcoin Dominance VS Altcoin Dominance

In today’s lesson, as you have noticed, we were closely comparing BTC.D (Bitcoin Dominance) to altcoins. While these are two separate indicators, they function similarly. BTC.D measures the strength of Bitcoin in relation to the overall digital asset market, while altcoin dominance measures the strength of altcoins.

So if altcoin dominance is growing, funds are flowing toward altcoins rather than other crypto. This shows a possible alt season. However, if altcoin dominance goes down, then investors’ money moves from altcoin to Bitcoin.

Summary

That’s all you need to know about Bitcoin dominance at this stage. It is a very useful indicator, but just like any other – it does not work alone. It’s not infallible, so it’s worth pairing it with other tools that will give you an even greater view of the cryptocurrency market.