Why Bitcoin Dominance Is No Longer Relevant To Crypto

Tony "The Bull" Severino

1 year ago

3 mins read

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Bitcoin dominance is a metric weighing the top cryptocurrency’s market share against the rest of the crypto space, including Ethereum, Polkadot, Cardano, and other altcoins. For years, analysts used it as a tool to predict divergences between altcoins and Bitcoin.

However, recently, the metric has lost just about all meaning, and could explain why it has done nothing but trend sideways for weeks now on end. Here’s why BTC dominance is no longer a relevant measure in crypto.

Why Bitcoin Remains The Most Dominant Cryptocurrency Today

Years ago, Satoshi Nakamoto designed the first system of peer-to-peer digital cash and the cryptocurrency industry was born. The advent of Bitcoin, also brought with it a revolutionary distributed ledger technology called blockchain.

Bitcoin the asset, secured by cryptography and a consensus mechanism, cannot be duplicated, but the technology it was built on has been adapted in many unique ways since. Ethereum, for example, ties smart contracts to transactions so that decentralized applications can run on the blockchain.

Thousands of altcoins have since been created that compete for market share with Bitcoin. As the first ever cryptocurrency, BTC enjoyed first-mover advantage and all that comes along with it, including brand recognition, trust, familiarity, and being further along in adoption.

When altcoins gained dominance over Bitcoin in late 2017 and early 2018, the metric became particularly useful for technical analysis and predicting the normally unpredictable relationship between BTC and altcoins.

BTC dominance has been stuck around 60% for weeks on end | Source: CRYPTOCAP-BTC.D on TradingView.com

BTC Dominance: No Longer A Reliable Metric To Measure Crypto

Because altcoins trade against USD and BTC primarily, they don’t always follow the same trends and patterns that Bitcoin does. Analysts had once utilized BTC dominance effectively, but its usefulness has begun to fade. Why? Because digital assets are transcending the definition of what an altcoin is, and BTC dominance cannot keep up with innovation in the market as a metric itself.

What that means is, there’s a sea of coins on decentralized exchanges, an explosion of NFTs, and several other blockchain-based assets that aren’t included in the popular metric.

Related Reading | Why March Is The Bloodiest Month In Bitcoin History

The best example of dominance losing its importance, is due to the fact that altcoins have been performing so well, beating Bitcoin in ROI across most of the asset class, yet the metric remains firm at around 60% where it has now spent several weeks consolidating.

An explosive move could result due to such lengthy consolidation, however, what could instead be happening is the measure losing any remaining usefulness as a tool to gauge crypto market trends.

Featured image from Deposit Photos, Charts from TradingView.com

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.

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