Foreign media reports that BTC.D is a commonly used indicator to observe the relative strength of Bitcoin, but it cannot alone indicate whether Bitcoin will rise or fall, nor is it sufficient to directly confirm whether the 'copycat season' has arrived. With the expansion of ETF, stablecoins, and the scale of institutional holdings, funds may stay in Bitcoin for a longer period than in the past.
BTC.D Reflects relative performance
The calculation method for BTC.D is not complicated; it is simply the market value of Bitcoin divided by the total market value of the crypto market, then multiplied by 100%. This indicator does not focus on the absolute price of Bitcoin, but rather on the change in its proportion within the entire market.
The methodologies of different data platforms are not entirely consistent. The article mentions that CoinGecko currently reports a Bitcoin market capitalization share of about 58%. When calculating the global crypto market capitalization, this platform excludes certain types of tokens such as wrapped tokens, cross-chain tokens, and staked tokens to avoid double counting.
The direction of ascent and descent cannot be determined independently.
The article points out that when interpreting BTC.D, it is necessary to consider the trend of Bitcoin prices as well. A decrease in the proportion of Bitcoin does not necessarily mean that funds are withdrawing from Bitcoin; it could also be that other crypto assets are performing even better.
This means that BTC.D is more suitable for measuring relative performance, rather than for making independent judgments about market direction. Even if this indicator declines, it cannot be used as a direct basis to conclude that altcoins will take over completely.
Funds may still be concentrated in Bitcoin.
The article argues that the decline in BTC.D can serve as a signal to observe the market trends of altcoins, but a single indicator is no longer sufficient to cover the current market structure. The expansion of stablecoins and the continued holding of Bitcoin by institutions may lead to funds remaining concentrated in BTC for a longer period of time.
Coinpaper A previous article on market rotation mentioned that altcoins once increased their market value by about $215 billion in just 3 days. However, since Bitcoin still holds a high proportion, this round of growth is not sufficient to be considered a widespread or definitive "altcoin season."
Individual tokens may also strengthen independently without a comprehensive rotation. The article mentions that XRP has seen a 43.7% increase in the past 7 days, while at that time, BTC.D was still close to 59%. This also indicates that BTC.D cannot be used as a unified signal for trading counterfeit coins and is more suitable for observation in conjunction with other market indicators.
