Many people ask me: what exactly is BTC dominance? And why should we really pay attention to it if we want to understand where the crypto market is heading? Well, I’ll explain it simply.

BTC dominance ( or DOM) is fundamentally the weight that Bitcoin represents in the total crypto market capitalization. Basically, it measures the share of the pie that Bitcoin takes compared to all other altcoins combined. It’s calculated simply: Bitcoin’s market cap divided by the total market cap of all cryptocurrencies. For example, if Bitcoin is worth $9 billion and all other altcoins together are worth $1 billion, BTC dominance = 9 / (9+1) = 90%.

A few years ago, BTC dominance hovered around 60-70%. Today, in 2026, it’s around 56%, showing that the market has diversified. But Bitcoin remains the native currency of crypto, the one through which everything passes. If you want to enter the crypto market, you need to go through Bitcoin or USDT. And when altcoins collapse, everyone rushes to sell their alts to refuge in Bitcoin.

What’s interesting is understanding the four scenarios we usually see. First, when Bitcoin rises and drives the entire market with it, it’s the ideal scenario where confidence explodes and big capital flows everywhere. Next, there’s the case where Bitcoin rises but altcoins fall, which happens when flows focus solely on BTC. The third scenario is when Bitcoin drops and drags the whole market down because when the king falls ill, the court suffers. And finally, there’s that moment when Bitcoin stabilizes sideways while altcoins start to breathe and rise again, which can last 1 to 2 years.

When BTC dominance increases, it’s an important signal. If it rises along with a strong increase in Bitcoin’s price, it means traders are selling their altcoins to accumulate Bitcoin, betting on a new growth phase. But if dominance rises while Bitcoin falls, that’s more critical — altcoins plunge even more, and many investors refuge in USDT to avoid losses.

Historically, it’s fascinating to watch. In 2016, when Bitcoin was under $100, it represented over 90% of the market because there was practically nothing else. Then 2017 changed the game with the ICO explosion. BTC dominance dropped to just 35% because everyone was rushing to Ethereum to participate in fundraising. Ethereum itself reached 30% dominance. But at the end of 2017, when Bitcoin exploded to $20,000, BTC dominance rose back to 65%. Then, mid-2018, it dropped to 33% before climbing back to 45% around July. And during the 2020 crash, when Bitcoin collapsed and then recovered from $3,800 to $41,000, BTC dominance hit 74%.

That’s why I always say that if you really want to follow the market, you need to keep an eye on the BTC dominance index. It’s not the only indicator to watch, of course — you should also follow TOTAL, TOTAL2, the DEFI indices, and USDT.D to get a real picture of the money flow. That’s why beginners often mess up — they only see the price and not the mechanics behind it.