Bitcoin Dominance (BTCD) measures the percentage of the total cryptocurrency market capitalization that Bitcoin holds. It serves as an indicator of Bitcoin’s relative strength compared to other cryptocurrencies.

When Bitcoin’s market cap rises, its dominance increases, suggesting that investors favor it over altcoins. Conversely, if altcoins perform better and attract more investment, Bitcoin’s dominance may decrease. This can signal shifts in market sentiment and investment strategies.

Traders and analysts monitor Bitcoin dominance not only for insights into Bitcoin’s performance but also to gauge the overall health of the cryptocurrency market. High dominance often means Bitcoin is seen as a safe haven, while lower dominance can indicate increased interest in alternative coins.

Changes in BTCD can affect trading strategies, as many investors may choose to allocate resources based on the dominance ratio. Overall, Bitcoin Dominance is a key metric for understanding market trends and investor behavior.