This chart explains the relationship between Bitcoin dominance (BTC.D), Bitcoin's price (BTC), and alternative cryptocurrencies (ALTs) during different phases of the Bitcoin dominance cycle.
Breakdown:
1. BTC.D (Bitcoin Dominance):
Represents Bitcoin's market share in the entire cryptocurrency market.
2. BTC (Bitcoin):
The price movement of Bitcoin.
3. ALTs (Alternative Cryptocurrencies):
Price movements of altcoins (non-Bitcoin cryptocurrencies).
Scenarios:
1. BTC.D Increases + BTC Increases:
Bitcoin gains dominance as its price rises.
Altcoins decrease in value as funds flow into Bitcoin.
2. BTC.D Increases + BTC Decreases:
Bitcoin's dominance grows while its price drops.
Altcoins experience a faster decrease ("dump") as funds leave the crypto market.
3. BTC.D Increases + BTC Stable:
Bitcoin's dominance increases while its price remains stable.
Altcoins enter an accumulation phase where prices stabilize.
4. BTC.D Decreases + BTC Increases:
Bitcoin's dominance declines while its price rises.
Altcoins experience a fast increase ("alt season") as interest shifts to them.
5. BTC.D Decreases + BTC Decreases:
Bitcoin's dominance decreases as its price falls.
Altcoins stabilize in value.
6. BTC.D Decreases + BTC Stable:
Bitcoin's dominance reduces while its price remains stable.
Altcoins experience gradual increases in value.
always do your risk management.
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