Trading Bitcoin against Altcoins

Bitcoin is a scarce asset, while US Dollar is not. Thats why we want to trade more Bitcoin over time instead of US Dollar. Therefore we are trading Bitcoin vs Altcoins instead of USD vs. Altcoins.

Bitcoin Dominance Chart

If you are trading Bitcoin against Altcoins, the most important chart to watch is the Bitcoin Dominance chart (BTC.D in TradingView).

Bitcoin Dominance chart. Ratio between Bitcoin and Altcoins. If this chart goes up, Altcoins lose value against Bitcoin. If this chart goes down, Altcoins gain value against Bitcoin.


If you are using a DCA strategy and your portfolio is already quite deep into altcoin positions and the Bitcoin Dominance chart hits major support levels, it is recommanded to clear your portfolio, since its likely that Altcoins are about to drop in value against Bitcoin and produce drawdown. You may also consider to lower the initialCostPercentage parameter or strengthen your trading strategy.

The opposite way, if Bitcoin dominance tops out or is about to enter a long term downtrend, you may increase the initialCostPercentage parameter slightly and use a strategy that generates more buy entries.

By these optimizations you will increase your profits over time even further while keeping the drawdown quite low.