Altcoins (or “Altcoins”) are all cryptocurrencies that come as alternatives to Bitcoin, such as Ethereum, Cardano, Ripple, Litecoin and many others. The influence of altcoins in the market is affected by several indicators, including the Total 3 and BTC Dominance.
Total 3 Index:
The Total 3 Index is an index that represents the total market capitalization of all cryptocurrencies except Bitcoin and Ethereum. With this index, investors can evaluate the performance of altcoins in isolation from the major ones, as it reflects the amount of money invested in altcoins only.
• If the Total 3 indicator rises, it means that investors are increasing their focus on altcoins, indicating an increase in demand for these currencies and an increase in their value.
• If the indicator falls, this may be an indication of money shifting towards Bitcoin or Ethereum or even money leaving the market.
BTC Dominance Indicator:
The BTC Dominance Index expresses the ratio of Bitcoin's market cap to the total market cap of the entire cryptocurrency market. This index is considered one of the most important indicators for measuring Bitcoin's dominance in the market, and it has a significant impact on the movement of alternative currencies.
• If BTC Dominance rises, it usually means that Bitcoin is capturing a larger percentage of the money invested in the market, which often means that interest in altcoins is declining, and some may see a decline in value.
• If BTC Dominance falls, it indicates an increase in interest in altcoins, as investors move towards risk and investing in new projects.
Impact of indicators on altcoins:
1. Total 3 rises and BTC Dominance falls:
• This scenario usually means that there is a lot of optimism in the altcoin market.
• Indicates an increase in investment in alternative currencies, with a decrease in the percentage of Bitcoin’s dominance.
• This can lead to a significant increase in altcoin prices as more liquidity flows in.
2. Total 3 Decrease and BTC Dominance Increase:
• This indicates the possibility of altcoins weakening and increasing control by Bitcoin.
• In this case, the market could be in a phase of instability, as investors move from altcoins to Bitcoin as a safer asset.
3. Total 3 and BTC Dominance are both rising:
• It expresses an increase in the market value of digital currencies as a whole, with an increase in Bitcoin's dominance, which means that the market is witnessing a new influx of money, but most of it is heading towards Bitcoin.
4. Both Total 3 and BTC Dominance are down:
• It refers to the withdrawal of liquidity from the market as a whole, with both Bitcoin and altcoins affected.
• This could be an indication of a correction phase or even a bear market.
Finally:
Analyzing the movement of the Total 3 and BTC Dominance indicators can provide important signals to investors about the prevailing trends in the market. For altcoin enthusiasts, it is important to follow these indicators to understand when there may be opportunities to enter or exit the market.
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Always remember: these currencies carry high potential, but with similar risks. Invest wisely, relying on careful research and clear investment plans.