The Altcoin Chart You Can’t Afford to Ignore
As promised in my last post, “Time to Buy Altcoins?” here’s the first in a series of articles about altcoins.
By now, you’ve probably heard about the “bitcoin dominance” chart.
That chart shows bitcoin’s percentage of the total cryptocurrency market capitalization. It looks like this:
Most analysts use this to trade bitcoins against altcoins or identify trends that make it advantageous to buy or sell altcoins. When the line goes down, altcoins dominate. When the line goes up, bitcoin dominates.
Sounds good but it won’t help you navigate the altcoin market.
Why not?
Because it includes stablecoins and Ethereum. Collectively, those assets have a total market cap almost as large as bitcoin’s and larger than all other remaining altcoins combined.
In other words, the bitcoin dominance chart tells you more about bitcoin’s relationship to ETH, USDT, USDC, and BUSD than bitcoin’s relationship to altcoins. You hardly see the other 30,000 altcoins reflected in this chart.
