BTC Dominance

Definition ∞ BTC Dominance represents the market capitalization of Bitcoin as a percentage of the total cryptocurrency market capitalization. It indicates Bitcoin’s relative influence and stability within the broader digital asset ecosystem. A higher BTC Dominance suggests that Bitcoin holds a larger share of the total crypto market value, often implying investor preference for its perceived safety or maturity. Conversely, a declining dominance can signal increased interest in altcoins or a shift in market sentiment. Context ∞ Current discussions around BTC Dominance are closely watched as an indicator of overall market health and investor rotation. When BTC Dominance rises, it often correlates with a “flight to safety” within the crypto space, where investors retreat to Bitcoin during periods of uncertainty. Conversely, a falling BTC Dominance may precede periods of altcoin outperformance, suggesting increased risk appetite and capital flowing into alternative digital assets. Monitoring this metric provides crucial insight into capital flows and market trends affecting the entire cryptocurrency landscape.