BTC.D stands for Bitcoin Dominance, which measures the percentage of Bitcoin's market capitalization in the total cryptocurrency market. The specific calculation formula is:

BTC.D = (Bitcoin Market Cap / Total Cryptocurrency Market Cap) × 100%

This indicator reflects Bitcoin's market dominance relative to other cryptocurrencies (commonly known as 'altcoins,' including Ethereum and others). It is not a price indicator but a 'barometer' of market sentiment and capital flow.

BTC.D is mainly used to determine the cyclical phase of the cryptocurrency market, the trend of capital rotation, and to adjust investment portfolios accordingly. Below are its core application methods, based on historical market cycles (such as the bull-bear transition of 2017-2018, the bull market of 2021, etc.):

Determine market phase (bull market/bear market/altcoin season)

  • BTC.D rising: indicates Bitcoin is relatively strong, with funds favoring BTC (lower volatility, higher consensus). This often occurs during:

  • Early bear market or during market panic (investors seek safety, turning to BTC).

  • Early bull market (BTC leads the way).

  • Example: At the beginning of 2021, BTC.D rose from 40% to 71%, corresponding to BTC price soaring from $20,000 to $57,000.

  • BTC.D falling: indicates altcoins are stronger, with funds flowing from BTC to altcoins ('altcoin season'). This typically occurs during:

  • Later stages of a bull market (BTC's growth slows, with funds chasing high-multiple altcoins).

  • Example: At the end of 2017, after BTC peaked, BTC.D fell to 32.81%, with altcoins soaring for a month.

  • Use in conjunction with BTC price:

  • BTC rising + BTC.D consolidating/falling → funds rotate into altcoins, suitable for increasing altcoin positions.

  • BTC consolidating/falling + BTC.D rising → market top signal, beware of bear market, gradually reduce altcoin holdings.

Adjust investment portfolio (Portfolio)

  • Bear market or high BTC.D (greater than 50-60%): prioritize buying the dip or holding BTC, reduce altcoin positions. Reason: BTC as a 'store of value' typically experiences smaller declines than altcoins. It is recommended that BTC positions account for more than 70%.

  • In a bull market with BTC.D decreasing (around 40-50%): increase altcoin allocation to capture high-return opportunities. But be aware of the risks—altcoin seasons often coincide with market bubbles bursting.

  • Example: When BTC.D rises to 48-50%, one can position for potential altcoins (like ETH or emerging projects), but set profit-taking targets (such as reducing positions when BTC.D rebounds).

Notes and limitations

  • Combine with other indicators: BTC.D is not a standalone trading signal and should be used in conjunction with trading volume, candlestick patterns, macro events (such as halving, stablecoin issuance). The inflation of stablecoins (such as USDT) may artificially lower BTC.D.

  • Historical lessons: In 2018, after BTC.D fell below 40% during the ICO boom, a bear market began; during the structural bull market in 2021, rotation among sectors like DeFi/NFT caused BTC.D fluctuations.

  • Current observation (as of October 2025): BTC.D has recently been fluctuating around 48%; if it breaks 50%, it may indicate an independent BTC market; conversely, funds may flow into altcoins.#加密市场回调