Altcoins are finally showing strength. Your feed
is yelling alt season. Your friend is shilling you a micro cap. And you’re thinking, how much
juice is left? How much we got left, baby? Well, Bitcoin dominance is the chart that helps us
answer that. Think of it as a vibe check on how much of crypto’s pie sits in Bitcoin versus
the rest. It isn’t perfect, but it’s very useful if you know its quirks. So today we dive into
Bitcoin dominance, what it is, when alts typically explode, and how to use it without panic rotating
out of BTC. My name is Guy, and unlike that dusty VHS you found at the bottom of your parents’
wardrobe, this is a video you really should be watching. Now, although we’ll be looking at
crypto markets today, I must make one thing clear. I am not a financial adviser, and nothing in this
video should be considered financial or investment advice. This is purely educational content meant
to inform you about Bitcoin dominance. So, if that sounds good, hit those like and subscribe buttons,
smash that notification bell, and let’s get into it. So, let’s start with what exactly Bitcoin
dominance is, and perhaps more importantly, what it isn’t. Bitcoin dominance, denoted as BTC.
D on Trading View measures what percentage of the crypto market belongs to BTC based on the top
125 coins. When Bitcoin dominance is rising, it means the market is favoring BTC. When
Bitcoin dominance is falling, it means the market has a relatively greater appetite for
shiny altcoins or stable coins for that matter. This means traders can use Bitcoin dominance as
a compass to help navigate market sentiment and altcoin appetite. For example, Bitcoin dominance
had a steady rise since the start of this cycle from 40% in December 2022 to its recent high of
66%. Now, this was largely due to capital flooding into newly launched ETFs and corporate treasuries.
And indeed, the chart paints a pretty picture of BTC stealing the spotlight and rising to its
status as an institutionally accepted asset. Now, it’s important to repeat that Bitcoin dominance is
only looking at Bitcoin versus the top 125 cryptos by market cap. So, when you stare at the Bitcoin
dominance chart, you’re looking at BTC versus the biggest slice of the altcoin universe and not
every single crypto that’s ever launched. That emission surprises some people when they first
hear it because Bitcoin dominance is often quoted as literally Bitcoin share of the total crypto
market. But the truth is, most of crypto’s total value still sits inside that top 125 bucket. So,
even if a bunch of small cap tokens never make the list, the number still tells you where most of the
money is parked and how money is flowing through the cryptosphere. Make no mistake, this is still
very useful for investors trying to assess the market. Having said that, like any other metric,
it’s not perfect. New token launches, airdrops, and unlocks can swell the altcoin side of the
equation without any real rotation out of BTC. In these scenarios, supply and altcoin market cap
is just added overnight. At the same time, Bitcoin supply only creeps higher with block rewards,
which are a much more gradual process than token unlocks. So BTC’s market cap doesn’t jump the same
way unless price does, but it grows nonetheless. Liquidity muddles things further. You can dump
a million dollars of BTC on the market without having any impact on the chart. However, try
that on a random rank 90 altcoin and you’ll likely skid the price into the floor due to
altcoins having less liquidity. Stable coins, meanwhile, add another wrinkle, particularly as
they’re one of crypto’s fastest growing sectors, currently sitting at a market cap of $262 billion
and rising. When Tether or Circle expands their supply, Bitcoin dominance can drift lower even if
nobody’s aping into altcoins. Now, some analysts strip stables out and others don’t. But the
default version of Bitcoin dominance provided by Trading View keeps stable coins in. So, that’s
just something to keep in mind when considering how big BTC’s slice of the crypto pie truly is.
So given this fact, you should think of Bitcoin dominance less as gospel and more as a money flow
thermometer between Bitcoin and everything else with meaningful size. If you know the basket’s
boundaries and the distortions that can push it around, it stops being a mysterious number and
starts being a handy signal. But before we start using that signal to help us see where things are
going, it helps to zoom out and see how Bitcoin dominance behaved in past cycles. Every major alt
season we remember was paired with a massive slide in Bitcoin dominance, not just a drop. That’s
the pattern we’re hunting for now. So, first let’s roll back to January 2017. Over the course
of one year, Bitcoin share absolutely cratered from the mid 90% range to the mid30% range. That
collapse lined up with the ICO boom and what some consider the original altcoin mania. ETH, XRP, and
thousands of other new hopefuls all ripped upwards while BTC’s slice of the pie shrank. Fast forward
to the last big run in 2021. From February that year to midMay, dominance slid from about 62% to
40%. Notably, the majority of that dominance drop coincided with both BTC and altcoins soaring in
USD terms. However, May 2021 is remembered as one of the major crypto wipeouts, and rightly so. So,
keep in mind, Bitcoin dominance can go up or down in very different market environments. After that
flush, Bitcoin dominance didn’t just spring back to old highs. It spent more than a year stuck
under 50%. And that tells you dominance can stay depressed long after the fireworks end.
And now to this cycle. As mentioned earlier, dominance reached as high as 66% last month. And
that zone proved sticky. Following a steady rise since December 2022 with only one draw down
greater than 10% back in November last year, it’s now showing some signs of cracking. It
dropped 5.8% in a single week back in June, its sharpest weekly fall in over 3 years, and
it’s currently chopping around 60% at the time of making this video. Obviously, a lot of this drop
is due to the rise in ETH’s price and relative strength against BTC as seen in the ETH BTC ratio.
With strong ETF flows, new stable coin legislation in the US and corporate treasuries buying up
ETH, all signs point to the show continuing. Now, these developments were not lost on crypto
Twitter or crypto media outlets either, with tweets and headlines echoing a
call for another big alt season. So, where does Bitcoin dominance likely head? Well,
if history rhymes, the first real zone that says, “Oh, alts are really moving,” would be the mid50s.
In that area, dominance has had a tendency to chop while more capital takes some time to begin
rotating into altcoins. Bear in mind, though, that markets do not move in a straight line. If
dominance just had its biggest weekly loss in over three years, a short-term bounce is likely,
even if the likelihood of a continued draw down seems high. If the mid50 shelf does give way, the
classic full send band goes all the way down to around 40%, the same neighborhood where both
2017 to 2018 and 2021 alt peaks formed. Now, that doesn’t mean it has to repeat perfectly, but
it does give you a realistic target. And remember, once Bitcoin dominance plunges, it can hang low
for months, even after a potential blowoff top that crypto is known for. Don’t forget that you
don’t always get an instant snap back to Bitcoin leadership after the bare market starts. Anyways,
the key takeaway is that if ETH is just warming up its move and bringing altcoins along with
it for the ride, then Bitcoin dominance at the mid50s would be the first area to look out for.
If ETH and the rest can snowball their momentum, we could see mid50s break and some real fireworks
follow. Whatever happens though, the levels on the map are defined and they can be quite useful when
setting your expectations. instead of reacting to every altcoin pop on those days when green
candles are everywhere. You know what else is useful? Particularly if we see dominance continue
to fall, the Coin Bureau deals page because that’s where you’ll find signup bonuses of up to
$100,000, trading fee discounts of up to 50%, and cash back on deposits of up to 75% on crypto
exchanges. These deals won’t be around for long, though, so take advantage of them ASAP using the
link down below or the QR code on the screen. So, we’ve had a look at what Bitcoin dominance is
and where it may be heading. But what actually influences the metric? Well, looking at this
cycle, we’ve had a pretty unique cocktail of factors that pushed dominance on its steady
ascent. From the bare lows in late 2022 all the way up to June of this year, we saw dominance
rising without taking a breather along the way. And this was thanks to the spot Bitcoin ETFs
narrative followed by the very real capital inflows upon their launch and relentless corporate
buying too. US spot bitcoin ETFs have stacked roughly $54 billion in net inflows since launching
in January 2024. Although corporations adding BTC to their treasuries is now a trend too. It was
started by Michael Sailor of Micro Strategy. Now known simply as Strategy, the firm has accumulated
an unbelievable 607,000 BTC and counting around 72 billion at current prices. That constant
bidding propped up Bitcoin share of the market while a lot of alts were still limping out of the
rubble. Now beyond that unique blend of factors, the usual risk on riskoff cycle still influences
Bitcoin dominance too. When markets feel edgy, capital sprints to the safe orange coin and
Bitcoin dominance rises. When confidence returns, traders fan out into alts and Bitcoin dominance
falls. As you might have guessed, we just saw a preview of the latter with Bitcoin dominance
dropping nearly 6% in a week back in June, its sharpest fall since 2022. This is classic alts
are waking up behavior. Flows into nonBBTC majors have amplified this dynamic since then. Spot ETH
ETFs finally caught real momentum in July, pulling in a record $727 million in a single day and over
$2 billion in a week. The parallels with BTC’s ETF-driven momentum are clear, and this is further
matched by corporations copying the BTC Treasury playbook with ETH treasuries. If ETH keeps
absorbing institutional dollars, especially if ETF staking gets added to the mix, it weakens Bitcoin
dominance because that money isn’t buying BTC. And historically, of course, ETH rising like this has
been good news for the wider altcoin market. Those nuances we mentioned earlier, though still apply.
Stable coin supply keeps ballooning with around $100 billion in market cap added over the last
year alone. Token unlocks do the same. More float on the alt side means Bitcoin dominance can drift
lower without a single sat moving. Nevertheless, the big picture is this. ETFs and treasuries can
shove Bitcoin dominance up for months. Macro fear can spike it in days. And sector specific flows
like ETH right now can drag it down just as fast. And of course, we can’t ignore stable
coins and unlocks. So, know which force is currently in control. And the chart stops
being noise and starts telling a story. Okay, now for the fun part. What can all of this tell us
about how much alts could rally? Bitcoin dominance gives us an idea about the market’s preference for
BTC over alts and general risk appetite. But if we pair that with the top 125 crypto assets, we can
gauge what kind of altcoin upside we’re looking at. As it so happens, there’s an indicator that
tracks the top 125 cryptos, and it’s called total, which measures the total crypto market cap. Total
swells when fresh money floods in or when prices moon and shrinks when the whole space deflates.
So with that in mind, let’s stitch the two metrics together. Bitcoin dominance falling while total
rises means new capital or recycled Bitcoin gains is chasing alts. If Bitcoin dominance is falling
but total is flat, it signals an internal shuffle from Bitcoin into larger alts without expanding
the overall pie. Both climbing at the same time means capital is pouring into crypto so fast
that Bitcoin’s slice of the pie still grows. And if we flip the script, total sinking and
Bitcoin dominance rising is a classic riskoff tell. Traders are dumping alts harder than they’re
selling BTC. Now, the current market shift, as we’ve discussed, is clearly a positive one for
alts. So, let’s sanity check some upside potential with some simple numbers. Leading forecasters
have BTC reaching $150 to $200,000 or more at the peak of its current run. If we take the lower
end of that band, $150,000, that gives us a BTC market cap of $3 trillion. Now, if dominance
hits around 50% as it would in the scenario we considered before, total would be roughly $6
trillion. Subtracting BTC from that leaves another $3 trillion for altcoins and stables combined. And
besides total, there’s another useful metric to keep in mind if you’re trying to narrow the focus
to mid and small caps. That ticker is others, and it removes the 10 largest assets, including
BTC, ETH, and leading stable coins USDT and USDC. What’s left is pure mid and small cap action. the
part of the market that usually goes wild at the height of alt seasons. There are more adjusted
total metrics that can be useful, but keeping an eye on total for the big picture and others for
the speculative heavy tail is more than enough. In December 2024, Coin Market Cap’s measure of the
total memecoin market cap swelled to 137 billion, even while Bitcoin dominance sat near cycle highs.
This is proof that mid, small, and micro caps can soar long before Bitcoin dominance officially
cracks. While it’s important to avoid doing too much business far out along the risk curve, this
does tell us that upside opportunities in crypto are always there, whatever the conditions. With
that said, when others starts to rip alongside a falling Bitcoin dominance, that’s the market
signaling full send on smaller names. If it is up but still behind Total 2, which excludes
BTC as it is at the time of making this video, the rally is probably focused more on ETH and
a few big caps. So, pull up Bitcoin dominance, keep total and others in neighboring PES. Use
adjusted totals for additional analysis if you wish, and let these metrics communicate the
flow. And right now, based on historical trends, they’re communicating some significant upside
for alts. But what does that really mean for the wider market? When Bitcoin dominance breaks down
properly, leadership shifts. BTC stops sucking up most of the oxygen and liquidity fans out
into everything else. You’ll notice it in price dispersion. Suddenly, it’s not just BTC moving.
Whole sectors and forgotten narratives light up in waves. Historically, ETH usually moves first, then
other large caps, then mid and small caps, and eventually the truly degenerate stuff if the move
lasts long enough. However, note that this cycle brought something unique. The ease of accessing
cryptos on chain means we often see a sort of barbell with speculative cryptos like memecoins
rallying alongside the large caps. However, if Bitcoin dominance continues to break down, we
can expect extended trends, volatility spikes, and narratives starting to matter more than clean
macro correlations or blind memecoin speculation. That’s the classic alt season feel, and a falling
dominance line is the backdrop. Projects with real liquidity get first dibs on fresh capital,
while smaller names can spike 30% in an hour simply because five traders decided to buy at the
same time. We should also note that there’s often an uptick in scams of all kinds because every
cycle’s breakdown in Bitcoin dominance invites nefarious opportunists. So, be wary of that.
As we’ve discussed, if you’re heavy BTC when dominance rolls over, it doesn’t automatically
mean dump everything and chase alts. It just means the environment is shifting from single
leader to multile. Some people are fine with BTC doing its thing while they watch the whole circus
from a distance, and that is totally reasonable. Others prefer to nibble at the edges, maybe rotate
a slice into names they already researched instead of sprinting blindly into whatever is currently
green. The point isn’t to tell you which path to take. It’s to highlight the trade-offs. Staying
mostly in BTC can feel slow if alts are ripping day after day, but piling into illlquid coins
can feel brutal if Bitcoin dominance snaps back, which tends to happen even in altcoin seasons.
Having a mental plan for those whiplash moments, whether that’s trimming positions or
simply not staring at the chart every hour, keeps you from knee-jerk decisions. Plans made
when you’re calm, beat, “I’ll figure it out in the moment.” Use charts as a context. A falling
dominance line plus a rising total tells you the pie is growing and alts are getting the love.
Falling dominance with a flat pi says it’s mostly rotation. and a sudden dominant spike while prices
stall is the market waving a yellow flag. None of those signals demand an immediate move, but they
frame what kind of market you’re in so you can act or not act on your own terms. After all, that is
the whole idea behind watching Bitcoin dominance in the first place. It’s not there to hand you
trades. It’s there to keep you oriented when the noise gets loud one way or the other. So, if this
breakdown helped, drop a like, hit subscribe, and tell us which dominance level you’re watching and
which altcoin sector you think benefits the most. And if you want to learn about how altcoin ETFs
could amplify a breakdown in Bitcoin dominance, then be sure to check out this video over
here. Okay, that’s all from me for today. Thank you as ever for watching and I’ll see
you next time. This is Guy. Over and out.
