### What is BTC Domination?
BTC dominance refers to Bitcoin's share of the total cryptocurrency market cap. Expressed as a percentage, this ratio is calculated by dividing the market value of Bitcoin by the total market value of all cryptocurrencies. BTC dominance is an important indicator for investors to understand market trends and the state of the overall cryptocurrency market.
### What Happens As BTC Domination Increases?
When BTC dominance increases, it becomes clear that Bitcoin is becoming more dominant in the cryptocurrency market. This could indicate several different scenarios:
1. **While Bitcoin Price is Rising**: If the price of Bitcoin is rising and altcoins are increasing less compared to Bitcoin, it means investors have more confidence in Bitcoin. This indicates that Bitcoin is perceived as a âsafe havenâ and is seen as more resilient to market fluctuations.
2. **When Bitcoin Price Is Falling**: If altcoins are experiencing larger losses while Bitcoin's price is falling, investors may be avoiding risky assets and turning to Bitcoin. This means that overall market confidence is low and investors prefer Bitcoin as a safe asset.
### What Happens While BTC Domination Decreases?
When BTC dominance decreases, it becomes clear that altcoins are performing better compared to Bitcoin. This situation may indicate several different scenarios:
1. **When Bitcoin Price Is Rising**: When the price of Bitcoin is increasing, altcoins are gaining value faster, this is known as "altcoin season". Investors are turning to altcoins that offer higher return potential.
2. **While Bitcoin Price is Falling**: While the price of Bitcoin is falling, altcoins are losing less value or even increasing, indicating that investors are diversifying risk and evaluating potential gains. In this case, investors show more interest in alternative projects and technology.