top of page

BTC Dominance vs USDT Dominance

Understanding Bitcoin Dominance: What It Is and Why It Matters

BTC dominance has reduced from 70% to 60% in 2020, while Bitcoin rallied from $7,100 to the $10,200 level. 

Regardless of the movement behind the recent BTC dominance drop, it is incorrect to infer a direct relationship between the indicator and bull or bear market trends. What should be noted is that the 60% dominance rate cannot be compared side-by-side with previous years.

USDT is a stable coin in the crypto market which is inversely proportional to Bitcoin On the weekly chart above when USDT's dominance touched the upper strong resistance line since 2015 it always started falling and Bitcoin prices increased. In Oct 2020 then in July 2021, USDT dominance started falling after touching this upper band. Now again in 2022, USDT dominance started aligning to the upper white line and now we are waiting for the Buy signal of Bitcoin. 

Bitcoin is the first commercial cryptocurrency that kick-started the global adoption of blockchain technology and peer-to-peer transactions. While its history is fascinating, what is more, important to many investors and traders is Bitcoin's dominance. Bitcoin dominance is a concept that has become a tradable indicator led by the Bitcoin dominance chart.

Bitcoin Dominance Explained Bitcoin dominance is the percentage value that measures how dominant BTC is compared to the total market. The growth of the altcoin space has made Bitcoin dominance a highly useful tool for many crypto traders and investors to fine-tune their portfolios and trading strategies. It is calculated as the BTC market cap divided by the total crypto market cap multiplied by 100.

Why Only Bitcoin and Not Ethereum?


As Bitcoin dominance is a ratio of the Bitcoin market cap to the overall market cap, the calculation method holds even for other cryptos. However, we usually talk only about Bitcoin because it started as the first commercial crypto and is still the most dominant one to date, comprising 39% of the entire crypto space in terms of market capitalization.

Factors Impacting Bitcoin Dominance Several factors can affect Bitcoin dominance, including:

Bitcoin Value:

If BTC moves up the price chart, its market dominance increases. When altcoins were not popular, BTC dominance was close to 90%. Yet, things started to change with the growth of blockchain-powered gaming, financial services, and art. Every new advancement in the crypto space that brings about a new token plays a role in pushing Bitcoin’s dominance down.


The introduction of new coins to the crypto space might impact Bitcoin's dominance. Over 20,000 crypto assets are already in circulation, and people tend to experiment with other options based on social sentiments, the extent of shilling, fundamentals, and hype. Thus, Bitcoin's dominance might be impacted if the money starts flowing to other cryptocurrencies in droves.

Stablecoin Popularity:

While Satoshi Nakamoto envisioned Bitcoin for peer-to-peer transactions, stablecoins seem to have taken up that responsibility. Stablecoins are cryptocurrencies pegged to assets, such as fiat currencies or precious metals, and have a stable value. The popularity of stablecoins might cause investors and traders to shift their attention from Bitcoin to stablecoins, potentially impacting Bitcoin's dominance.

What Is the Bitcoin Dominance Chart?

The Bitcoin dominance chart is a graph that shows the percentage of Bitcoin's market capitalization compared to the total market capitalization of all cryptocurrencies. It provides insights into the state of the crypto market, changing user sentiments, and total market capitalization. By following the chart, traders and investors can fine-tune their trading/investment strategies.

Using Bitcoin Dominance for Trading Traders can use Bitcoin dominance for trend analysis, which can help them identify potential market trends. Bitcoin dominance is a handy tool to use as a trend analysis tool. When analyzing the relationship between Bitcoin dominance and the price of Bitcoin, traders can determine whether it is a good time to buy or sell Bitcoin.

Benefits and Disadvantages of Using the Bitcoin Dominance Chart Benefits:
  • Provides valuable insights into the state of the crypto market, changing user sentiments, and the total market capitalization.

  • A handy tool for trend analysis, which can help traders identify potential market trends.

  • Increased supply: The introduction of new cryptocurrencies can dilute the value of existing cryptocurrencies, potentially impacting Bitcoin's dominance.

  • Market cap shortcomings: Market capitalization is not always the best measure of cryptocurrency value, as it does not consider the underlying technology or use case.

  • The Real Bitcoin Dominance Index: Some experts argue that the real Bitcoin dominance index should exclude stablecoins, as they are not cryptocurrencies in the true sense.


Bitcoin dominance is a concept that traders and investors can use to find.

The Bitcoin (BTC) dominance chart is a metric that shows the market share of Bitcoin in the total cryptocurrency market capitalization. It has several uses, including risk aversion, market overview, and traceability. The BTC dominance chart can help traders and investors spot the onset of bear and bull market phases, identify reversal patterns, and forecast short-term price consolidation phases. However, there are some disadvantages to using the BTC dominance chart, such as an increase in BTC supply due to mining activity that might lead to an isolated surge in the chart. The Real Bitcoin Dominance Indicator can help bypass some of these pitfalls by comparing the BTC market cap against the Proof-of-Work (PoW) cryptocurrencies only. Traders often analyze bitcoin prices and their dominance concurrently to reach trading outcomes. When both dominance and prices go up, a bull market might be in the offing. Dropping prices and rising dominance might be bear market signals. Finally, if both indicators drop, a larger bearish trend followed by sideways movements can be around the corner.

Here are some more combinations to help you make trading decisions based on BTC dominance:

Case 4: BTC price is increasing, and dominance is increasing

Trading action (possible): Favor BTC (bullish market)

Case 5: BTC price is increasing, and dominance is decreasing

Trading action (possible): Favor altcoins (altcoin season building)

Case 6: BTC price is decreasing, and dominance is increasing

Trading action (possible): Hold on to fiat (massive bearish waves)

Case 7: BTC price is decreasing, and dominance is decreasing

Trading action (possible): Favor altcoins (trend reversal, altcoins becoming more popular)

Check Pi Cycle Top

Check Golden Ratio

Check Gold vs Bitcoin Dominance

Become a Stock of the Day Member 

Get Access to All insider charts 

Recieve Alerts on time

Stock of the Day pick in your Email

bottom of page