Bitcoin (BTC) dominance is more than just a ratio—it’s a window into market sentiment. A rising BTC dominance suggests a “risk-off” environment, where traders are moving out of volatile altcoins and into Bitcoin as a safer choice. Conversely, a falling dominance indicates growing risk appetite, as traders venture into smaller, potentially more profitable projects.
When viewed alongside Bitcoin price trends, dominance becomes an especially powerful macro signal. For example:
- Price ↑, Dominance ↑ = Strong BTC-led bull trend.
- Price ↑, Dominance ↓ = Capital rotating into altcoins.
- Price ↓, Dominance ↑ = Flight to safety.