BTC Dominance: Why is it the most important index in crypto?

If you are seriously trading crypto and do not know what BTC Dominance (DOM) is, then you are playing blind. This index is a compass for understanding where the money is flowing in the crypto market.

What is this even?

BTC.D is simply the percentage of Bitcoin's market capitalization in the entire crypto market. If the total crypto market is worth $1 trillion, and Bitcoin accounts for $600 billion of that, then DOM = 60%.

The formula is the simplest:

DOM = BTC Market Capitalization / (BTC + all altcoins) × 100%

Historical Levels:

• 2016: >90% (Ethereum was not yet there)
• July 2017 (: fell to 35% )ICO revolution squeezed Bitcoin(
• End of 2017: jumped to 65% )BTC to $20k(
• January 2018: dropped to 33% )whale outflow(
• March 2020-2021: rose to 74% )BTC from $3.8k to $41k(
• Currently: fluctuating around 50-55%

4 scenarios of the crypto market )that's it!(

1. BTC ↑ + Altcoins ↑ → Paradise for everyone. Money is coming from the side, people are buying everything.

2. BTC ↑ + Alts ↓ → The king rides on a horse, the retinue cannot keep up. Capital is flowing from altcoins into Bitcoin.

3. BTC ↓ + Alts ↓ → Panic. “When the king is ill, the whole court is ill.”

4. BTC ≈ + Altcoins ↑ → Battery near Bitcoin. The state pauses - altcoins are preparing for a rally. It may last 1-2 years.

When DOM is growing - what to do?

DOM ↑ + BTC ↑ → Money is flowing out of altcoins. Investors are selling altcoins to warm up on BTC. → It is better to play at such a moment on top altcoins with real use cases and a low price.

DOM ↑ + BTC ↓ → Double hit - altcoins will fall even worse. It's time to preserve capital in USDT.

DOM ↓ + BTC ↑ → Altcoins are rising faster than Bitcoin - a classic situation before the alt-season.

DOM ↓ + BTC ↓ → Keep an eye on the cash flows. Altcoins may have initially dropped along with BTC, but then bounced back above the initial levels.

More about what you need to know

DOM is not everything. Also, keep an eye on:

• TOTAL - market capitalization of all crypto ) including Bitcoin(
• TOTAL2 - capitalization excluding Bitcoin ) net alt market (
• DEFI.D - dominance of DeFi tokens
• USDT.D - the dominance of the stablecoin ) shows where the “safe haven” of capital (

Each index tells its own story about where the money is fleeing. One DOM is like looking at the market with one eye. Beginners often forget this and then wonder why their predictions fell apart.