Table of Contents
1. What is the Bitcoin Dominance Chart?
The Bitcoin dominance chart measures Bitcoin’s market capitalization as a percentage of the total cryptocurrency market. It helps traders understand whether Bitcoin or altcoins are leading the market.
? Formula for Bitcoin Dominance:
? Why It Matters?
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High dominance (above 50-60%) ? Bitcoin is leading, and altcoins are weaker.
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Low dominance (below 40%) ? Altcoins are gaining strength (a potential “altseason”).
2. How Bitcoin Dominance Affects Altcoins
? When Bitcoin dominance rises:
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Investors prefer Bitcoin over altcoins due to market uncertainty.
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Money flows into BTC first, causing altcoins to underperform.
? When Bitcoin dominance falls:
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Altcoins start gaining market share.
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This often signals the beginning of an altseason—when many altcoins experience rapid price increases.
Example:
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November 2021 – Bitcoin reached $69,000 while dominance was falling, leading to a massive altcoin rally in coins like Solana and Avalanche.
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March 2024 – Bitcoin dominance rose again as BTC hit new all-time highs, indicating that altcoins had not yet fully entered their peak rally.
3. What Are Bitcoin Old Coins?
“Old coins” in Bitcoin refer to BTC that has not been moved for a long time. These coins are often held by early adopters or long-term investors.
? Key Indicators for Bitcoin Old Coins:
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Dormancy – If a large amount of old Bitcoin suddenly moves, it may indicate selling pressure.
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HODL Waves – Tracks how long BTC remains in wallets. A higher percentage of old coins means stronger hands are holding.
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Realized Cap Age Bands – Measures how much of Bitcoin’s market cap is held by long-term vs. short-term investors.
Why Old Coins Matter?
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If old Bitcoin starts moving, it may signal that early investors are taking profits.
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If old BTC remains unmoved, it suggests holders believe in higher future prices.
? Example: In December 2017, Bitcoin peaked at $19,783, and many old coins moved, marking the top.
Conclusion: Combining Dominance & Old Coins for Strategy
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If Bitcoin dominance is rising ? BTC is likely leading the market, and altcoins are weaker.
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If Bitcoin dominance is falling ? Capital is flowing into altcoins, signaling an altseason.
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If old Bitcoin starts moving ? Long-term holders may be selling, signaling a market top.
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If old Bitcoin remains unmoved ? Confidence in Bitcoin remains strong.
Understanding these metrics can help traders time their entries and exits in both Bitcoin and altcoins for maximum profit. ?
He is an expert in financial niche, long-term trading, and weekly technical levels.
The primary field of Igor's research is the application of machine learning in algorithmic trading.
Education: Computer Engineering and Ph.D. in machine learning.
Igor regularly publishes trading-related videos on the Fxigor Youtube channel.
To contact Igor write on:
igor@forex.in.rs
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