I just revisited an indicator that is underestimated by many altcoin traders: Bitcoin dominance, or what they call btc d.

Actually, the concept is quite simple. Btc d simply measures the share of Bitcoin in the total market capitalization of all cryptocurrencies. Once you understand how this index works, you can better grasp where the money is flowing and what it means for altcoins.

The calculation is straightforward: Bitcoin market capitalization divided by the total crypto market capitalization. Let’s take an example: with a total market cap of $1.6 trillion and Bitcoin at $700 billion, that results in a btc d index of 43.8 percent.

What I find interesting about this: when btc d rises, capital flows into Bitcoin and altcoins suffer. When btc d falls, the money looks for new targets in altcoins or stablecoins. That’s actually the secret to understanding where the next altcoin rally is coming from.

Historically, it has always been quite interesting to observe. In the early days, btc d was over 95 percent because Bitcoin was practically the only game in town. Then came 2017 with the ICO madness, and suddenly btc d dropped to 35 percent. After that, in 2018, the big crash in many altcoins followed, and btc d quickly rose back to 70 percent. In March 2019, it was around 50 percent, and in 2021, a decline began again as money flowed back into altcoins.

That was also the time when Bitcoin was under pressure due to negative news about energy consumption and the mining situation in China. On May 19, 2021, BTC even dropped by 30 percent, causing panic sell-offs everywhere.

Currently, btc d is around 57.30 percent, which means Bitcoin again has a strong share of the overall market. This is an important indicator to see which phase of the market cycle we are currently in.

For practical traders: You can track btc d on TradingView, CoinMarketCap, Coin360, or CoinGecko. These platforms update the index in real time.

Important to understand: this index mainly helps you with altcoin strategies. If you only invest in Bitcoin, you don’t need to pay so much attention to it. But if you invest in altcoins, btc d should be on your radar. It’s one of the more reliable indicators to recognize whether the market is currently altcoin-friendly or not.

I regularly use btc d to evaluate my positions in various altcoins. When the index rises, I often reduce my exposure. When it falls, I can become more aggressive. It’s not a perfect indicator, but together with other analyses, it’s a pretty solid tool.