Dominance is a metric used to measure Bitcoin’s value in context to the entire crypto market. Dominance helps investors to understand and compare different digital currencies.
Not to mention, traders can also monitor the market sentiment to understand the flow of cryptocurrencies. There are still some shortcomings over using the Bitcoin Dominance Index.
Since a large proportion, as much as few percentage of the mined coins remains dormant, Dominance can become an unrealistic metric. At the same time, Dominance is also losing its preference, as other cryptocurrencies such as Ethereum are gaining popularity in the market.