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Drop-in Bitcoin Dominance can be bullish signal for Altseason 2021

Bitcoin Dominance

Bitcoin is one of the world’s largest cryptocurrencies by market capitalization (market cap). In addition, it commands a large portion of the trading volume in several cryptocurrency markets. We look at the summative market capitalization of all the existing cryptocurrencies. As a result, we can arrive at a total market cap valuation for the entire cryptocurrency space.


Description


Thus, Bitcoin dominance is the ratio between the market cap of Bitcoin to the rest of the cryptocurrency markets. Bitcoin had a dominant much closer to 100% for many years. However, the Bitcoin dominance dropped significantly as several new cryptocurrencies were created.


Alt-Seasons

Moreover, Bitcoin dominance is often affected by the “alt-seasons.” During alt-season, the altcoins gain more market share compared to Bitcoin, reducing its dominance. However, Bitcoin dominance is not always directly affected by the bull or bear markets as it is a ratio, not an absolute term.


Real value

It means that if Bitcoin price falls and the rest of the cryptocurrency market falls at a similar rate, then the Bitcoin dominance is likely to remain the same. Moreover, we have to remember that Bitcoin dominance doesn’t reflect its actual value.


Market cap

It is also worth noting that the market cap doesn’t mean an influx of money. This measurement is based on the circulating supply and the current market price. So though Bitcoin dominance is less than 100%, it is not necessarily a good or bad thing. It is just a tool that helps us better understand how the Crypto space is evolving.

Disclaimer: The information provided is not trading advice, Bitcoinworld.co.in holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.