BTC Dominance Surges During Selloffs — Flight to Safety
I notice BTC dominance tends to climb when Bitcoin starts to dump because capital flees less liquid altcoins and consolidates into Bitcoin or exits to stablecoins. I see it as a risk-off rotation rather than a sign that BTC is suddenly stronger in absolute terms.
During sharp selloffs alts usually suffer heavier percentage losses and liquidations, so their market share drops quickly while BTC holds more liquidity and perceived safety. That mechanically raises BTC dominance even as BTC price falls.
I watch on-chain flows, stablecoin balances and dominance trends to time exposures: rising dominance in a dump often means altcoins will underperform until market stabilization or renewed risk appetite returns.
Analysis
Recommendation
Reduce alt exposure during sharp BTC drops, monitor dominance and stablecoin flows, and consider shifting to BTC or stablecoins until dominance and volatility normalize.
Disclaimer
The Analysis and recommendations provided are for informational purposes only. Any investment decisions should be made at your own risk. Past performance is not indicative of future results. Always conduct your own research and consider consulting with a financial advisor before making any investment decisions.