I see many of you still have questions about what BTC DOM is and why it’s so important. Today, I want to share some of my insights about this indicator.

BTC Dominance (or DOM, btc.d) basically refers to Bitcoin’s market capitalization relative to the entire crypto market. In other words, it shows us what percentage Bitcoin accounts for in the total market cap of all cryptocurrencies. For a simple example, if Bitcoin’s market cap is $9 billion and all altcoins combined are $1 billion, then DOM = 9 / (9 + 1) = 90%.

Why is btc dom important? Because Bitcoin is considered the “base currency” of the market. Most people need to buy Bitcoin or USDT to participate in crypto, and when altcoins drop sharply, they often move their funds back into Bitcoin to preserve value. This explains why Bitcoin has such a strong influence over the entire market.

I’ve observed four main scenarios happening in the market. First, Bitcoin rises along with the entire market — this is the most ideal situation, indicating a strong market. Second, Bitcoin rises but altcoins fall, meaning capital is flowing only into Bitcoin. Third, Bitcoin drops and drags the whole market down — this happens quite often because when the king is sick, the entire court wobbles. Lastly, Bitcoin moves sideways or slightly down while altcoins rise, which is when Bitcoin is gathering strength for a new rally.

When DOM increases and Bitcoin’s price surges, it’s a sign that market confidence is returning strongly. Investors sell altcoins to buy Bitcoin and wait for profits. Conversely, if DOM rises but Bitcoin’s price falls, altcoins tend to fall even harder, forcing many to sell into USDT to avoid losses. When DOM decreases and Bitcoin rises, most altcoins also tend to increase, often more sharply than Bitcoin. And if DOM drops and Bitcoin also declines, you need to carefully observe capital flows to understand what’s happening in the market.

Looking back historically, in 2016, Bitcoin had no serious competition, and DOM reached over 90%. 2017 was a turning point when ICOs exploded, and DOM dropped to just 35% as people rushed into Ethereum to participate in projects. At the end of 2017, when Bitcoin hit $20,000, DOM recovered to 65%. 2018 saw another sharp decline, with DOM falling to 33% as whales took profits. By the end of 2018, despite Bitcoin’s drop, DOM remained around 50%. As of the time of writing, DOM is around 50-55%.

Then, in 2020, there was an impressive recovery. Bitcoin rose from $3,800 to $41,000 by year-end, pushing DOM close to 74%. Currently, according to the latest data, btc dom is at 57.38%, indicating the market is balanced between Bitcoin and altcoins.

I want to emphasize that besides btc dom, you also need to monitor other indicators like TOTAL, TOTAL2, DEFI, USDT.D. These metrics require practical experience and a real feel for capital flow to truly understand. That’s also why many beginners make mistakes — they only look at one indicator without considering the full picture. To stay ahead of market trends, you must always keep an eye on DOM and related metrics.