Hi there, today I will be giving a little tour on the crypto market understanding how the market operates is very important for a trader to excel in the volatile market I'm sure with adequate information a trader will be well equipped to handle the turbulence in the market.
Having access to this important information has been the secret behind some successful trading tips for traders in the market.
If you are a trader you might sometimes be wondering why is there much market movement, when BTC goes high other altcoin seems to decrease they seem to be moving in different directions.
For example, when Bitcoin made a new all-time high major altcoin will tend to lose value in price and when Bitcoin seem stable or decrease in value altcoin gain value.
The whole idea lies in understanding what BTC dominance is all about, from coinmarketcap traders can have access to BTC dominance chart BTC dominance chart
what is BTC dominance
It's a measure of the total market cap of how much worth of cryptocurrencies is comprised of Bitcoin.
The image above shows the total market cap of cryptocurrency in BTC which is currently in the range of 2 trillion dollars
Also with the help of coinmarketcap, one can see what is the current percent of Bitcoin dominance without making much calculation.
How to calculate BTC dominance
To calculate BTC dominance trader need to divide the total market capitalization of Bitcoin by the total market capitalization of all cryptocurrencies and multiply the value
by 100%
BTC Dominance = Bitcoin Market Capitalization / Total Market Capitalization
Bitcoin market cap = $1,112,695,060,213.65
Total market cap = $2,043,548,692,224
Using your calculator to do the maths you will get your final solution to be 5.44 when multiple by 100% you get 54.4% which is the current market dominance of BTC.
To know what is the dominance of any crypto in the market the above method is also used all information about any crypto market cap can be gotten from coinmarketcap just do the division and multiple by 100% to get you to answer.
Importance
The use case of BTC dominance is it helps traders to understand and keep track of market movement.
when there is an increase in BTC dominance BTC price goes up and the altcoin price decrease.
This means that as a trader you will likely be in the BTC market when there is an increase in dominance and also in altcoin when there is a decrease.
Hope this post was quite helpful thanks for stopping by.