Recently noticed that many newcomers get confused about one basic indicator — what is BTC dominance and why should you look at it at all. Decided to figure it out and share my observations.

It’s simply the percentage of the total crypto market capitalization that Bitcoin accounts for. It’s straightforward: take the market value of BTC, divide by the total crypto market cap, and multiply by 100. That’s it. For example, if the total capitalization is 2 trillion and Bitcoin is worth 1 trillion — the dominance is 50%.

Why is this even important? Because it’s an indicator of where the money is flowing. When dominance is rising — investors pour into Bitcoin, altcoins are sluggish. When it’s falling — there’s rotation into altcoins, which can be an interesting moment. Plus, during a crisis, people usually seek safety, so dominance tends to spike again.

A typical pattern I often see: Bitcoin surges, dominance increases. Then BTC stalls in a sideways range, and altcoins start to grow, dominance drops. Then a crash — and everyone runs back into BTC, dominance jumps again. Cyclical, you see?

Now I’m looking at the numbers. Dominance has fallen to 56%, which is much lower than a few months ago when it stayed above 60%. Earlier this summer, it was around 65.5%. That’s a serious shift — money is clearly migrating from Bitcoin to altcoins. Ethereum and XRP have shown good growth in recent weeks, and that’s no coincidence.

What does this mean practically? Altcoin season is slowly waking up. The altcoin season index is still in neutral territory, but the trend is clearly reversing. BTC dominance is in a downward trend, although we haven’t yet reached the classic altcoin season point — when it drops below 50%.

A mistake I often see: people think that if Bitcoin is rising, altcoins will automatically fly. That’s not true. First, you need to check what the dominance is doing right now and where it’s heading. That’s the key to understanding whether it’s a real altcoin season or not.

In general, I’m monitoring the situation. If dominance continues to fall, it will be a signal that interesting moments in altcoins are just beginning. By the way, on Gate you can track these metrics in real time — it’s convenient to have all tools on one platform.