Hello everyone, how are you doing and how is life treating you? I hope you are all well and having a good time with your loved ones. BTC dominance is used to calculate the market capitalization ratio in relation to the rest of the cryptocurrency markets. As we all know, Bitcoin is the king of the cryptocurrency world, with the highest market capitalization. The value of the coin and the asset in circulation is referred to as market capitalization. The dominance of Bitcoin has its own formula for calculating the asset value in circulation.
BTC DOMINANCE TO ASSIST YOU IN ADJUSTING YOUR PORTFOLIO
Many investors and traders use BTC DOMINANCE to adjust their portfolios or make trading decisions. They use it to assist with trading and to maintain the structure of their portfolio. In general, you can say that this will assist you in providing the market trend, which is both true and beneficial. If you want to use the BTC Dominance formula, it is provided below.
BTC DOMINANCE = BTC MARKET CAPITALIZATION DIVIDED BY TOTAL CRYPTOCURRENCY MARKET CAPITALIZATION.
FACTORS AFFECTING BTC DOMINANCE
There are some factors that have influenced BTC DOMINANCE, such as when BTC first appeared, it was very popular, and more attention was paid to BTC. However, as altcoins gain traction, people's attention is drawn to them, and their value rises. Altcoins bring various features and updates, such as involvement in various sectors such as gaming, art, and a decentralised method of transferring money. Another factor influencing BTC dominance is the explosion of NFTs, which has reduced dominance and drawn more attention to NFT tokens.
BTC's positive movement is that it is regarded as one of the most stable cryptocurrencies. Because there is less volatility in Bitcoin trading, investors and traders are paying more attention to Bitcoin trading. We have seen an increase in the popularity of BTC dominance, and some investors use it as a tool to adjust their portfolio and make profitable trades.
What happened to Bitcoin's dominance in the BULL or BEAR market?
There are some stable coins in the crypto world that are designed to remain at $1. More investors use stable coins as a source of income, such as USDT, BUSD, USDC, and TUSD, in which they save and earn interest. They understand that these are stable coins with low volatility, so they invest in them. Especially when the bear market begins, they shift their funds to stable coins in order to protect their assets. When funds are transferred from the BTC market to stable coins, BTC's dominance is reduced.
Similarly, when a bull market begins, investors move their funds into high volatile coins in order to maximise profits. When they learn about the bull run, they withdraw their funds from locked savings and begin investing in the Bitcoin market. They make a lot of money this way, and BTC loses its dominance. As a result, the bear and bull markets have a significant impact on BTC dominance.
How is BTC DOMINANCE used as a trading tool by users?
Some traders use the Wyckoff trading method to determine when to enter positions for trading. Many traders and investors use this method to identify a market trend in order to take appropriate positions. This technique allows you to structure your trading into four phases: markdown, distribution, markup, and accumulation. With the help of these four phases, you can determine the best window of opportunity for timing the market and create the best and most informed trading positions.
When the price and dominance of Bitcoin rise, it indicates a bull market in which you can consider taking positions.
When the price of BTC rises while BTC dominance falls, it indicates that some altcoins with high potential are in a bull market and you can switch your positions to these altcoins.
Similarly, falling prices and dominance indicate a bear market, alerting you to close long positions and instead take short positions to maximise profits.
When the price of BTC falls while DOMINANCE rises, it indicates that altcoins are in a bear market.
These are the techniques you can use to help you take good trading positions. However, keep in mind that these methods are not completely guaranteed and are only suggestions to help you with your trades. BTC dominance is a tool that will help you make the right decisions by shedding light on how market trends change.
This is an attempt to spread awareness of BTC DOMINANCE and how to use it as a tool for making profitable trades. I hope this post will be educational for you all. Reblogging the post will help it get seen by more people so they can benefit most from it if you find it to be helpful and informative. Don't forget to upvote as well, as doing so will benefit my finances and help me expand my account. You are welcome to ask any questions you may have about the subject at hand, and I will be happy to respond to them all.
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DISCLAIMER
Please keep in mind that I am not a financial advisor. Never, ever take anything I say as financial advice. Conduct your own research. Before making any investment decisions, consult with a professional investment advisor! My posts are strictly for entertainment purposes!!
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