BTC Dominance, also known as Bitcoin Dominance, is a metric that measures the percentage of the total cryptocurrency market capitalization that Bitcoin (BTC) occupies.
In other words, it shows the relative size and influence of Bitcoin within the entire cryptocurrency market.
BTC Dominance is calculated by dividing Bitcoin's market capitalization by the total market capitalization of all cryptocurrencies.
For example, if the total cryptocurrency market capitalization is $1 trillion and Bitcoin's market capitalization is $500 billion, then BTC Dominance would be:
BTC Dominance = (Bitcoin's market capitalization / Total cryptocurrency market capitalization)
= ($500 billion / $1 trillion)
= 50%
This means that Bitcoin occupies 50% of the total cryptocurrency market capitalization.
BTC Dominance is an important metric for several reasons:
1. *Market sentiment*: It reflects the market's confidence in Bitcoin relative to other cryptocurrencies.
2. *Market trends*: Changes in BTC Dominance can indicate shifts in market trends and investor preferences.
3. *Altcoin performance*: A rising BTC Dominance can lead to a decline in altcoin prices, and vice versa.
By tracking BTC Dominance, investors and analysts can gain insights into the overall cryptocurrency market and make more informed decisions.
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