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Author: Admin | 2025-04-28
General decline, the Bitcoin Dominance ratio started to rise again. The rapid decline in the value of many altcoins paved the way for investors to turn to Bitcoin again, and the Bitcoin Dominance rate rose to 70%.In 2021, as decentralized finance (DeFi) and non-fungible token (NFT) projects grew in popularity, the Bitcoin Dominance ratio started to decline again. Many DeFi and NFT projects were developed on platforms such as Ethereum and Binance Smart Chain. During the period, the Bitcoin Dominance rate dropped below 60%. Historical BTC Dominance Data and AnalysisThe Bitcoin Dominance ratio is a critical metric for understanding the dynamics of the cryptocurrency market. This is because historical data shows that the Bitcoin Dominance ratio changes in relation to market cycles. High Bitcoin Dominance ratios are often seen during periods of high uncertainty or downtrends, while low ratios are more common in bull markets where altcoins are popular.On the other hand, academic research and market analysis show that Bitcoin Dominance provides clues about the health of the cryptocurrency market and investor behavior. For example, a study on Cryptography and Financial Technologies examined the effects of Bitcoin Dominance on market volatility and investment strategies (Smith & Kumar, 2020). In addition, market analysis companies and news outlets regularly share Bitcoin Dominance to guide investors.Why Bitcoin Dominance Matters?Impact on Market Sentiment and Investor ConfidenceThe Bitcoin Dominance ratio reflects the overall sentiment and investor confidence in the cryptocurrency market. A high Bitcoin Dominance ratio indicates that investor confidence in Bitcoin is strong and that the market is largely driven by Bitcoin. This occurs when there is uncertainty or a downtrend in the market, as investors turn to Bitcoin as a safer haven.The Relationship Between BTC Dominance and the Altcoin MarketThere is a direct relationship between the Bitcoin Dominance rate and the altcoin market. When the Bitcoin Dominance ratio rises, the market capitalization of altcoins generally rises or remains stable, which means that investors are shifting their capital to Bitcoin and the performance of altcoins is weaker than Bitcoin. When Bitcoin Dominance falls, investors flock to altcoins in anticipation of higher returns and market
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