Bitcoin dominance has long been a key metric for gauging the health and direction of the cryptocurrency market. However, traditional BTC.D indicators include stablecoins in their total market capitalization calculations—distorting the real picture of Bitcoin’s influence over volatile digital assets. The "BTC Dominance Excluding Stablecoins" indicator refines this measurement by removing the impact of major stablecoins like USDT and USDC, offering traders and analysts a more accurate, nuanced view of Bitcoin’s true market strength.
This refined approach helps uncover underlying trends in the crypto ecosystem that might otherwise be masked by the artificial inflation or deflation caused by stablecoin flows.
👉 Discover how Bitcoin's real market influence is measured—without stablecoin noise.
Why Exclude Stablecoins from BTC Dominance?
Stablecoins such as Tether (USDT) and USD Coin (USDC) are designed to maintain a 1:1 peg with fiat currencies and do not exhibit the same price volatility as other cryptocurrencies. Their market caps can surge during bear markets when investors move funds into stable assets, or during periods of high trading volume on exchanges. When included in total market cap calculations, these shifts artificially dilute Bitcoin’s dominance—even if Bitcoin’s actual position relative to altcoins remains strong.
By excluding USDT and USDC from the equation, the BTC Dominance Excluding Stablecoins indicator reveals:
- How much control Bitcoin actually holds over the non-stable crypto market.
- Whether capital rotation is favoring altcoins or consolidating in Bitcoin.
- Market sentiment shifts unclouded by stablecoin-driven distortions.
This makes it an essential tool for technical analysts, macro traders, and long-term investors seeking clarity amid volatile market cycles.
How the Indicator Works: Behind the Scenes
The indicator leverages Pine Script v5 and integrates real-time data from TradingView’s CRYPTOCAP symbol library. Here's a breakdown of its calculation logic:
1. Bitcoin Market Cap
Retrieved using: CRYPTOCAP:BTC
This provides the current market capitalization of Bitcoin, updated in real time based on global exchange data.
2. Total Cryptocurrency Market Cap
Sourced via: CRYPTOCAP:TOTAL
This represents the combined market cap of all cryptocurrencies tracked by TradingView.
3. Stablecoin Adjustment
Subtracts the market caps of:
CRYPTOCAP:USDT(Tether)CRYPTOCAP:USDC(USD Coin)
These two stablecoins represent over 80% of the stablecoin market, making their exclusion highly impactful for accuracy.
4. Adjusted Dominance Calculation
The formula used is:
(BTC Market Cap / (Total Market Cap – USDT – USDC)) × 100
This yields a percentage reflecting Bitcoin’s share of the volatile crypto market only.
5. Visualization
The result is plotted as a clean line chart across any timeframe—from minutes to months—allowing flexible analysis for both day traders and long-term strategists.
Key Features and Benefits
- ✅ Clearer Market Signal: Removes distortions caused by stablecoin inflows/outflows.
- ✅ Customizable Display: Adjust line color and thickness for improved chart readability.
- ✅ Cross-Timeframe Compatibility: Works seamlessly on intraday, daily, weekly, and monthly charts.
- ✅ Enhanced Trend Analysis: Reveals hidden BTC strength during altcoin selloffs or risk-off phases.
👉 See how Bitcoin performs when stablecoins don't skew the data.
Practical Use Cases
Identifying Altcoin Season vs. Bitcoin Rotation
When traditional BTC.D shows a decline, it's often interpreted as an "altcoin season." But if BTC Dominance Excluding Stablecoins remains flat or rises during that time, it suggests the drop may be due to increased stablecoin supply—not a genuine shift into altcoins.
Conversely, if both metrics fall together, it confirms strong capital movement into non-stable, non-BTC cryptos—potentially signaling a broad altcoin rally.
Gauging Market Risk Appetite
During times of macro uncertainty or regulatory stress, traders often park funds in stablecoins. This inflates stablecoin market caps and depresses standard BTC.D—even if Bitcoin itself is holding steady.
Using the adjusted indicator allows you to distinguish between:
- Real weakening in Bitcoin’s position.
- Apparent weakness caused purely by stablecoin accumulation.
Confirming Bull or Bear Phases
In bull markets, Bitcoin typically leads gains before altcoins follow. A rising BTC dominance (excluding stablecoins) can confirm early-stage bullish momentum. Conversely, sustained drops may signal late-cycle speculation rotating into smaller-cap assets.
Limitations and Notes
While highly insightful, users should keep several considerations in mind:
- 🔹 Currently excludes only USDT and USDC—the two largest stablecoins. Others like DAI, BUSD, or FRAX are not subtracted by default but can be manually added by modifying the script.
- 🔹 Data accuracy depends on TradingView’s
CRYPTOCAPfeeds, which may reflect minor delays or discrepancies based on exchange reporting times. - 🔹 Best used on daily or higher timeframes to filter out short-term noise and produce smoother, more reliable signals.
For advanced users, customizing the script to exclude additional stablecoins enhances precision even further—especially during periods when decentralized or algorithmic stablecoins gain traction.
Frequently Asked Questions (FAQ)
Q: Why is excluding stablecoins important for BTC dominance?
A: Because stablecoins aren’t speculative assets like Bitcoin or altcoins. Including them distorts dominance metrics when users move funds into USDT or USDC during volatility, creating false signals about Bitcoin’s actual performance.
Q: How does this differ from the standard BTC.D indicator?
A: Standard BTC.D includes all cryptocurrencies—even stablecoins—in its total market cap. This version subtracts USDT and USDC, focusing only on Bitcoin’s share of the volatile crypto market.
Q: Can I add other stablecoins to the exclusion list?
A: Yes. The Pine Script is open for modification. You can include symbols like CRYPTOCAP:DAI or CRYPTOCAP:BUSD in the adjustment calculation for broader filtering.
Q: Is this indicator useful for short-term trading?
A: It’s most effective on daily or weekly timeframes. Intraday readings can be noisy due to rapid stablecoin movements across exchanges.
Q: Does this mean stablecoins should always be ignored?
A: Not necessarily. Stablecoin data is valuable for liquidity analysis. But for assessing asset dominance, excluding them offers a cleaner perspective on investor behavior in risk-on vs. risk-off environments.
👉 Get real-time insights into Bitcoin’s true market dominance today.
Final Thoughts
The BTC Dominance Excluding Stablecoins indicator fills a critical gap in crypto analytics. By stripping away the noise introduced by non-volatile assets, it delivers a sharper, more honest view of where capital is truly flowing—whether into Bitcoin, altcoins, or temporary safe havens.
Whether you're analyzing macro trends, timing entry points, or evaluating portfolio allocations, this tool adds depth and clarity to your decision-making process.
As the crypto market matures, so too must our metrics. Precision matters—and this indicator takes us one step closer to measuring what really counts.
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