Bitcoin Dominance Bounces At The Bottom Bollinger Band
Bitcoin Dominance (BTC.D) measures the percentage share of the crypto market made up of bitcoin. When it goes up, it means bitcoin is generally outperforming the rest of the crypto market (regardless of whether both go up or down in dollars). In other words, a rising bitcoin dominance does not spell “altcoin season”.
What is the bitcoin dominance chart saying now?
The chart above shows the weekly candles of bitcoin dominance (ticker BTC.D in TradingView). From late June through mid-July, it was all red candles. Bitcoin dominance dropped from about 66% to 60% in that time, as Ethereum and some altcoins rallied.
But then it hit the lower Bollinger Band, and made a small green candle. It’s also green so far this week, though the week isn’t over yet.
Bollinger Bands track the volatility of an investment (or in this case, bitcoin dominance). The lower band is two standard deviations of price movement below the middle band (the 20-week moving average here). That’s a nerdy way of saying: assets (or BTC.D here) can move below the lower band, but it isn’t “normal behaviour” statistically.
Ergo, it would be “less normal” if bitcoin dominance carried on down from here without bouncing more first. In that case, the middle band might be the next spot to watch.
To get a full understanding of bitcoin dominance and how to use it in your strategy, check out our BTC.D guide.
Key takeaways:
- Bitcoin dominance has bounced at the lower Bollinger Band after a sharp pullback.
- That bounce suggests bitcoin may outperform altcoins in the short term (regardless of whether both go up or down in dollars).
- The middle band (around 63%) could act as the next technical level to watch.
As usual, none of this is investment advice. If you’d like to draw and track Bitcoin Dominance yourself in TradingView, grab our free PDF guide below to learn how:
