In the crypto market, Bitcoin (BTC) has always been the "leader" of the market. It is not only the most well-known cryptocurrency but also the main barometer of market fluctuations. Therefore, Bitcoin Dominance (BTC Dominance) is one of the indicators I follow the most. This indicator reflects the market capitalization proportion of Bitcoin in the entire crypto market.

Why is Bitcoin's dominance so important? Because it helps us assess the overall trend of the market. If BTC's market dominance rises, it means Bitcoin's performance is better than that of other crypto assets, and the market may enter a "risk aversion" phase, where investors are more inclined to choose stable assets like Bitcoin; conversely, if Bitcoin's dominance declines and the performance of other tokens is relatively stronger, it indicates that the market is becoming more diversified, which may signal a shift into a "risk preference" phase.
When assessing the effectiveness of Bitcoin's dominance, I mainly focus on its correlation with the overall market sentiment. For example, when Bitcoin's dominance rises while other coins generally fall, this could be a signal that market sentiment is turning conservative. Conversely, if dominance declines while most tokens rise, it indicates that the market may be in an optimistic state. #市场观测指标分享