Dominance Charts in Crypto

By idiosyncratic | Idiosyncratic Crypto | 12 Nov 2023

Tradingview offers dozens of different charts where you can compare the performance of assets, relate the correlation between two parameters, and make some decisions for the future performance of the assets listed on the platform.

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In the crypto ecosystem, investors are familiar with the charts which are based on the USDT performance of the coins or, especially in an uptrend, the performance of them in BTC charts. In addition to the parities (e.g. HIVE / BTC or HIVE / USDT), there are also domination charts that compare the "supremacy" of the coins in a certain period of time.

Among the domination charts, Bitcoin domination is used as a tool to understand what amount of money flows into the "safe" harbor, and ETH domination and ETH / BTC parity are used to have some ideas about the paradigm shift through which money flows from BTC to altcoins as the liquidity in crypto increases.

Tether Dominance: Trend Seeker

This is a "reverse" chart that shows the positivity or negativity in opposite ways. For instance, when the dominance of USDT is on the rise, most of the time the coins are losing value because investors see a risk in the market.

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When we look at the latest candle in the monthly chart, we may see a breakout from the local bottom level which was tested a couple of times but it did not go lower.

One of the most positive sides of the chart is that the Moving Average of 20 Months will be above the dominance level. It only takes 1 day and 3 hours to see what will happen but I have the feeling that the monthly close will be below MA20.

Bitcoin Dominance

Bitcoin is the very first crypto that receives the biggest portion of the money invested into the crypto ecosystem. When the new investors start to put some money in crypto, Bitcoin is the first digital asset that they purchase.

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In the middle of a bull run, BTC domination, which is always too high, starts to go lower because investors believe that BTC is overpriced and money flows into altcoins.

In the accumulation phase, the increase in the dominance chart indicates more money invested in BTC to repeat the cycle of high and low dominance according to the market. I still have my theory and wait for a solid hype in crypto when people share the next 100 x coin and the market will turn upside down. At that time, making more purchases with the stablecoin bag will start making some sense 😉

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When the monthly loss happens, I expect the level to be above the 50-month moving average and get support from them to retrace. The next target would be 56% which is too hard to break historically.

The positivity in both Tether and Bitcoin charts may support the expectation that BTC may hit 40K before it retraces. I will follow the same way with some risks.

Note : Many people still use USDT in their trades and for their operations on centralized exchanges. Even though USDC by Circle became a strong alternative, USDT is still the third highest valuable crypto.

Do you follow BTC or USDT dominance charts while trading in the crypto ecosystem? Also, have you any market predictions for this year of the first half of 2024? Share your experience below 👇

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