Altcoin dominance has been a term that’s come up frequently in the cryptocurrency space over the past year. It refers to the percent of market cap that all altcoins have compared to Bitcoin. The term itself was coined by researchers at Weiss Ratings and has been used by many others ever since, including crypto asset hedge funds. In this article, we’ll take a look at why this chart is so important and how it affects price movements in cryptocurrency markets.
What is the Altcoin Dominance Chart?
The altcoin dominance index is the percentage of the total cryptocurrency market cap made up of altcoins. It is calculated by taking the market capitalization of all cryptocurrencies except for Bitcoin (BTC) and dividing it by the market capitalization of BTC. The altcoin dominance chart shows how much of the total cryptocurrency market cap has been taken up by altcoins in comparison to Bitcoin over time. This can be represented as a graph showing how much of an increase or decrease there has been in altcoin dominance over time. The altcoin dominance index is a measure of how much of the total cryptocurrency market cap has been taken up by altcoins in comparison to Bitcoin.
How Is Altcoin Dominance Calculated?
The altcoin dominance chart is calculated by comparing the total market capitalization of all cryptocurrencies to that of Bitcoin. The calculation is based on the market cap for each coin and its circulating supply, rather than its price. The current value of altcoins relative to bitcoin is then displayed using a bar graph with green representing higher values and red representing lower ones (i.e., when it dips below 50%).
The reason why we use this approach instead of just looking at prices is that it allows us to see what’s happening with all cryptocurrencies at once instead of just one or two. This makes sense because if you have only one type of asset in your portfolio (such as Bitcoin), then changes in its price will affect how much money you have overall but if you own many different types simultaneously (as most people do), then those fluctuations won’t matter as much since they’ll cancel each other out when added together into one big sum total value!
What Can You Learn?
The altcoin dominance chart is an indicator of how much the altcoin market is growing. It measures how many dollars were invested into altcoins compared to bitcoin, and it can be used to predict whether or not there will be a bull market in cryptocurrencies. If the altcoin dominance index rises above 50%, then it means that more money has been invested into alts than BTC since January 2018. This indicates that investors are confident enough in their investments that they’re willing to take risks on new projects rather than sticking with Bitcoin only (or other established coins). For example, when Ethereum hit its all-time high price of $1,400 USD per token back in January 2018 just before its crash its dominance was around 51%.
However, if this number drops below 50%, then it means less money has been put into alts than BTC since January 2018; this indicates a bearish trend for cryptocurrencies as people lose confidence in them and start selling off their coins for fiat currencies instead.
Bitcoin Dominance Index Matter?
The Bitcoin Dominance Index is a measure of the market’s confidence in Bitcoin. It’s also a measure of Bitcoin’s market share and dominance. The higher the BDI, the more confident people are that Bitcoin will continue to be successful. This means that as long as you hold onto your bitcoins, they’ll be worth more than if you were to sell them now or at any time in the near future and perhaps even longer than that!
The BDI is a great measure of market confidence in Bitcoin because it’s an actual measurement, rather than just speculation. The more people use Bitcoin to purchase goods and services, the more people will want to hold onto their Bitcoins as well. This means that the BDI will continue to rise over time as long as people are confident that Bitcoin will be successful.
Has Been Increasing Over Time
The altcoin dominance index is a measure of the market share held by all other cryptocurrencies compared to Bitcoin. It’s calculated by taking the total market capitalization of all coins except for Bitcoin and dividing it by the total market capitalization of Bitcoin. The altcoin dominance index has been increasing over time and could approach 100% in the near future. This is an indication that altcoins are becoming more popular and gaining market share. The opposite scenario, in which Bitcoin held 100% of the total cryptocurrency market capitalization and no other coin was used, would be indicative of a bubble.
In conclusion, it’s important to remember that the altcoin dominance chart is not a perfect metric. It can be misleading at times and doesn’t capture all aspects of the cryptocurrency market. However, it does provide some insight into what is happening in this space right now and how things might evolve going forward.