What is the BTC Dominance Index (DOM)? Understand the "long wick candle" of the crypto world in one article.

2025-11-29 01:21:32

Many newbies ask me what DOM means, so today let's discuss this indicator thoroughly.

In simple terms, the BTC Dominance Index is the percentage that Bitcoin's market capitalization occupies of the total market capitalization of the entire cryptocurrency market. For example, if Bitcoin's market cap is 90 billion USD and the total market cap of the crypto space is 100 billion, then the DOM would be 90%. Back in the day, it could rise to 60-70%, but now it basically remains around 50-55%.

Why is it important? Because BTC is the “North Star” of the cryptocurrency world. Most people enter the market by first buying BTC or USDT, and during a bear market, they have to convert their coins to BTC to preserve their capital. Therefore, the direction of BTC directly determines the trend of the entire market.

Four Typical Scenarios:

1️⃣ BTC rises → the whole market follows (the most beautiful market).

2️⃣ BTC rises → Altcoins instead drop (funds all flow into BTC)

3️⃣ BTC falls → The entire market collapses (When the boss is in trouble, the whole family suffers)

4️⃣ BTC Consolidation → Altcoins Start to Explode (Possible Altcoin Season for 1-2 Years)

How to operate during the rise of DOM? Funds from altcoins flow into BTC, and unless the project is particularly strong, altcoins are unlikely to perform well. You should look for potential coins with solid fundamentals that have not experienced explosive growth for a reverse layout.

Historical Node:

2016: BTC was less than 100 dollars, there was no Ethereum, DOM was directly over 90%.
Mid-2017: ICO frenzy, ETH sucking blood, DOM dropped to 35% (at that time ETH accounted for 30%)
Early 2018: Whales crashed the market, DOM dropped to 33%, then rose again to 45%.
2020-2021: BTC rose from 3800 to 41000, and DOM once surged to 74%.

Currently, DOM is fluctuating between 50-55%. If you want to buy the dip on altcoins, you need to wait for DOM to fall back while BTC remains strong. At the same time, pay attention to other indicators like TOTAL, TOTAL2, and DeFi dominance. If you don't watch these, it's no wonder newbies keep stepping into pitfalls.

BTC-1.54%

ETH-1.77%

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