BTC to BTC-D(ominance) and Dollar (DXY) to QQQ Ratios
Important Technical Analysis (TA) to Understand how to drive toward independent financial sovereignty.
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This is an important Technical Analysis (TA) for refining edges to increase the probability for success in trading Crypto.
How to use BTC-D trends to time altcoin investments and DXY-QQQ inverse correlation to gauge macro-driven bull or bear market phases for BTC and broader markets
BTC to BTCD and Relation to Altcoin Movements
Bitcoin Dominance (BTCD): BTC-D represents Bitcoin’s market capitalization as a percentage of the total cryptocurrency market. It indicates whether BTC is outperforming or underperforming alt coins.
Total Market Cap: $3,456,299,594,880 to BTC Market Cap: $2,176,097,850,784 = 65.38% BTC Dominance Inverse Relationship with Altcoins:
When BTC-D rises, BTC typically gains market share, often leading to alt coin price stagnation or declines as capital flows into BTC and out of alt coins
When BTC-D falls, alt coins tend to outperform BTC, signaling an "alt season" where capital rotates into higher-risk, higher-reward alt coins
In the context of a Market Cycle:
Bull markets often start with BTC rallies, increasing BTC-D, followed by altcoin surges as BTC dominance peaks.
Bear markets see BTC-D rise as investors flock to BTC or stable coins, causing altcoins to lose significant value (up to 90% in past cycles)
Caveat: Both BTC and BTC-D can rise together so long as new money is inflowing.
DXY and QQQ Overview:
The US Dollar Index (DXY) measures the USD’s strength against a basket of major currencies. A rising DXY indicates a stronger USD
QQQ tracks the Nasdaq-100, representing tech-heavy growth stocks, often correlated with risk-on market sentiment.
Implications for BTC and Markets:
Bull Market: A declining DXY (weaker USD) typically supports risk assets, including BTC and QQQ, fostering bullish crypto and equity markets. BTC has shown a negative correlation with DXY (e.g., -0.65 in Q1 2024), rising when the USD weakens.
DXY Falling as QQQ rising supporting Risk on assets like BTC and equities
Bear Market: A rising DXY ( stronger Dollar), especially with tighter monetary policy (e.g., Federal Reserve rate hikes), reduces liquidity, pressuring BTC and QQQ.
DXY-QQQ Divergence: If DXY rises but QQQ holds or rises, it suggests strong risk appetite, potentially bullish for BTC. Conversely, if QQQ falls while DXY strengthens, it signals risk-off sentiment, bearish for BTC and alt coins
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