How dominance is calculated
Bitcoin dominance is bitcoin's market capitalization divided by the market capitalization of all crypto assets. Market capitalization is price times circulating supply, so dominance changes whenever either price or supply moves. The denominator is the sum of every coin a data provider tracks, and providers differ slightly in which coins they include and how they count supply. So it is perfectly normal for different screens to show different dominance values at the same moment.
The stablecoin problem
Total market capitalization includes stablecoins pegged to the dollar. Because their price barely moves, in a market-wide decline only the other coins shrink and the stablecoin share grows in relative terms. Conversely, when a lot of new stablecoins are issued, the denominator grows and dominance drops even if the bitcoin price stays put. Since the value moves for reasons unrelated to the relationship between bitcoin and altcoins, it is common to look at dominance with stablecoins excluded as well.
Four combinations to read with price
Dominance is a ratio, so on its own it doesn't tell you what went up and what went down. Placing it next to the direction of the bitcoin price makes what has happened so far a little clearer. The four cases below simply sort movements that already happened; they say nothing about what comes next.
- Bitcoin up, dominance up: bitcoin rose more than the rest
- Bitcoin up, dominance down: the other coins rose more than bitcoin
- Bitcoin down, dominance up: the other coins fell further
- Bitcoin down, dominance down: bitcoin fell further, or the stablecoin share grew
Market cap is not money moving
When dominance falls, people often say money moved from bitcoin into altcoins. But market capitalization is the whole supply valued at the last traded price, so a rise in market cap does not mean that much money came in. A thinly traded coin can move a lot on a small amount of money, inflating its market cap. New coins entering the index, or locked tokens being released into circulation, also enlarge the denominator. Reading every change in dominance as a flow of funds builds a bigger story than the data supports.
The idea of altcoin rotation
A common story says bitcoin rises first, then money moves on to ether, then large altcoins, then small ones. It is true that some past periods look like that on the chart, but it hasn't happened in the same order every time and it is not a rule. To make the story genuinely useful, you would need to say in advance when you judge it to have moved to the next stage, yet most people split it into stages only afterward. The problem of naming market phases after the fact is covered in more detail in the market phase guide.
The ETH/BTC ratio and correlation
Looking at a few measures together is less confusing than dominance alone. The ether price divided by the bitcoin price shows which of the two was relatively stronger. Checking how closely coins' returns moved together also helps you judge whether rotation is a fair description of a period. If most coins are moving almost in step with bitcoin, the market moving as one block explains things better than a story of money hopping from group to group.
- ETH/BTC ratio: which of the two was relatively stronger
- Dominance excluding stablecoins: the value with the stablecoin effect removed
- Correlation between coins: how much they move together
- The bitcoin price itself: the reference for working out why the ratio moved
Check it with this site's live tools
The dominance radar updates the market cap shares of bitcoin, ether and altcoins every minute, and also shows dominance excluding stablecoins, the share of altcoins outperforming bitcoin, and the ETH/BTC trend. Comparing the two dominance values at the same moment shows directly how much stablecoins change the number. The crypto constellation map measures how closely coins moved together using return correlations and compares them with the previous period, while the multi-timeframe trend table gathers the trends of the top coins by trading value across candle lengths in one table, useful for setting bitcoin's path beside the rest.
Summary and caution
Dominance is a number summarizing how the market's composition changed, and its causes should be split three ways: price, supply and stablecoins. Altcoin rotation is a name for explaining past periods, not a schedule for what comes next. This guide explains how to read an indicator and is not investment advice; please don't use it as the basis for deciding which coin to buy or sell, or when.
🌍 Search the web for this
Each button runs this keyword on that search engine