Bitcoin dominance measures BTC's market capitalization as a percentage of the total crypto market. It's a key indicator of market sentiment and capital rotation between Bitcoin and altcoins.
Rising BTC dominance = risk-off. When traders move capital from altcoins back to Bitcoin, dominance rises. This often happens during market uncertainty or the early stages of a bear market.
Falling BTC dominance = alt season. When dominance drops, capital is flowing into altcoins. This typically happens during euphoric bull market phases when traders seek higher-risk, higher-reward plays.
Historical range: 40-70%. BTC dominance has fluctuated between these levels since 2017. Extremes in either direction often signal a reversal is approaching.
Stablecoins distort the metric. The growth of stablecoins (USDT, USDC) has structurally reduced BTC dominance over time. Compare to the "BTC dominance excluding stablecoins" for a cleaner signal.