Bitcoin dominance is expressed in an index called BTCDOM. This index reflects the value of Bitcoin relative to the overall cryptocurrency market. The indicator provides insight into the market and allows speculation on the perceived potential of the first cryptocurrency compared to other tokens.

If the market capitalization share of altcoins grows relative to Bitcoin, the dominance index falls. In a situation where Bitcoin has increased its capitalization relative to altcoins, the index rises.

How to Apply the Index in Practice?

Some exchanges have already launched trading of a product called BTCDOM, which allows speculation on the dominance of the oldest cryptocurrency.

Additionally, the index allows you to:

• compare the demand for Bitcoin with the demand for altcoins;
• determine the "bull" and "bear" market for altcoins;
• transfer capital to altcoins when dominance is in a downward trend;
• manage to transfer assets to stablecoins or fiat currencies.

Based on the above information, the Bitcoin dominance index allows for more accurate technical analysis and reduces trading risks.