Bitcoin (BTC) is both the first and the most prominent cryptocurrency in the world when it comes to market capitalization as well as trading volume. These factors are quite significant, considering that all cryptocurrencies trade against Bitcoin and Bitcoin’s dominance can actually serve as a valuable indicator when trading all different types of cryptocurrencies.
This post will offer insight on how to trade cryptocurrency while utilizing the Bitcoin dominance indicator and how to read the Bitcoin dominance index chart overall.
What is the BTC dominance chart?
Bitcoin dominance is uncovered by comparing Bitcoin’s market capitalization to the capitalization of the entire crypto market. The higher Bitcoin’s market capitalization the more Bitcoin dominance is at play, and we have the answer to the question: What percentage of the crypto market is Bitcoin?
The BTC dominance TradingView chart showcases these numbers in a clear percentage format where one can take a quick glance and understand if BTC dominance is at 40% or 60%, for example.
That said, users can also view the Real Bitcoin Dominance Index, which calculates BTC dominance only against proof-of-work (PoW) coins aiming to become a form of money.
The logic behind the Real Bitcoin Dominance Index is that many altcoins such as stablecoins aren’t aiming to compete with Bitcoin and, so, it may paint a more realistic long-term view on Bitcoin’s dominance.
This indicator even gives users the option to exclude Ethereum,…
