• The Roundup
  • Posts
  • The King Reclaims Its Throne: Bitcoin Dominance Explained

The King Reclaims Its Throne: Bitcoin Dominance Explained

👑 Understand Bitcoin dominance by exploring its history and its relevance as a tool for gauging current market sentiment.

Author

Hector Alvero
October 22, 2024

Welcome to the Rhino Roundup, your weekly dose of industry news, platform updates, educational content, and fun memes in the world of Bitcoin.

Rhino Feature Spotlight 📢

At Rhino, your account security is our top priority.

That’s why we strongly recommend enabling 2-Factor Authentication to keep your account secure.

Just go to Menu → Security → 2-Factor Authentication, and follow the prompts to set up Google Authenticator for Rhino.

Featured Article

What is Bitcoin Dominance?

Bitcoin dominance refers to the percentage of the total digital asset market capitalization attributed to Bitcoin alone. This metric gives a clear picture of Bitcoin's position and influence compared to the entire digital asset market.

It's calculated by dividing Bitcoin's market capitalization (the total value of all bitcoin in circulation) by the combined market cap of all digital assets, which includes everything from projects like Ethereum to the thousands of lesser-known tokens.

Bitcoin dominance is not static. It fluctuates depending on market trends and sentiment, particularly during periods when speculative interest in altcoins (alternative digital assets) rises or falls. Despite the growing number of altcoins, Bitcoin remains the most trusted, secure, and decentralized digital asset, continuing to dominate the market.

The Relationship Between Bitcoin Dominance and Market Sentiment

Bitcoin dominance is a key indicator of market sentiment in the digital asset space. When it rises, it suggests investors are risk-averse, favoring Bitcoin’s stability over altcoins, often during bearish markets or economic uncertainty.

On the other hand, a decline in Bitcoin dominance signals increased speculation, with investors chasing altcoins for higher short-term gains—typically in the later stages of a bull market when confidence is high.

Bitcoin dominance fluctuates with market cycles, dropping during altcoin surges in bull runs and rebounding in bear markets as capital shifts back to Bitcoin, the most secure asset.

Want to explore how Bitcoin can be used as a market indicator? Read the full post here to find out more.

Meet the Team

Our social team is committed to promoting Bitcoin education. On our X page, you’ll regularly find in-depth threads covering complex Bitcoin topics like the Blocksize Wars.

Our latest thread draws from Bitcoin philosopher Gigi’s work, exploring Bitcoin’s unique relationship with time.

Check it out here.

Meme of the Week