Crypto isn’t just about picking the next moonshot. The real pros—the ones who consistently make money—know that understanding market structure, capital flows, and risk sentiment is the key to winning the game.

That’s where crypto indexes come in. These indicators help traders and investors read the market like a book, showing where the money is flowing, which assets are gaining dominance, and when major trend shifts are coming.

If you’ve ever wondered why Bitcoin dominance (BTC.D) matters, how stablecoin dominance (USDT.D) signals market risk, or why Total3 is a secret weapon for altcoin traders, this is for you. Let’s break down the most important crypto indexes to track and what they signal.

Bitcoin Dominance (BTC.D) – The King’s Grip on the Market

What it Measures:

BTC.D tracks Bitcoin’s market cap as a percentage of the total cryptocurrency market cap.

Why it Matters:

Bitcoin is the foundation of crypto, and BTC.D tells us how much capital is concentrated in Bitcoin versus altcoins.

  • Rising BTC.D → Bitcoin outperforming (or altcoins bleeding)
    • Signals a risk-off environment: investors are seeking safety in BTC.
    • Happens during bear markets or periods of uncertainty.
  • Falling BTC.D → Altcoins outperforming
    • Signals a risk-on environment: capital is flowing into riskier assets.
    • Often a sign of an altseason if BTC.D drops sharply while the market grows.

📈 Key Insight: If BTC.D starts dropping while Total3 rises, altcoins are about to fly.

Tether Dominance (USDT.D) – The Fear Gauge

What it Measures:

USDT.D shows how much of the total crypto market cap is sitting in Tether (USDT), the most used stablecoin.

Why it Matters:

USDT.D is a risk sentiment indicator:

  • Rising USDT.D → Investors fleeing to stablecoins (risk-off)
    • Indicates fear, uncertainty, and doubt (FUD).
    • Often happens during market crashes or sell-offs.
  • Falling USDT.D → Investors moving into crypto assets (risk-on)
    • Money is leaving stablecoins and entering Bitcoin, Ethereum, and altcoins.
    • Often a leading indicator for market recoveries.

📉 Key Insight: If USDT.D is dropping while BTC.D is also dropping, altcoins are about to shine.

Total Market Cap (TOTAL, TOTAL2, TOTAL3) – The Big Picture

TOTAL (Total Market Cap)

What it Measures: The entire cryptocurrency market valuation.

Signals:

  • Rising TOTAL → Bull market strength
  • Falling TOTAL → Broad market weakness

TOTAL2 (Altcoin Market Cap Excluding Bitcoin)

What it Measures: The total market cap of all cryptocurrencies except Bitcoin.

Signals:

  • Rising TOTAL2 → Altcoins gaining strength
  • Falling TOTAL2 → Altcoins struggling

TOTAL3 (Altcoin Market Cap Excluding Bitcoin & Ethereum)

What it Measures: The total market cap of all cryptocurrencies except Bitcoin and Ethereum.

Signals:

  • Rising TOTAL3 → Small-cap altcoins are pumping
  • Falling TOTAL3 → Risk appetite is dropping

🚀 Key Insight: When TOTAL3 is rising while BTC.D is falling, we’re in full-blown altseason.

Ethereum Strength – The ETH/BTC Ratio

What it Measures:

The ratio of Ethereum’s price compared to Bitcoin.

Why it Matters:

This is a risk-on vs. risk-off indicator for the altcoin market:

  • Rising ETH/BTC → Altcoins gaining strength
    • Ethereum is outperforming Bitcoin, which often leads to an altcoin rally.
  • Falling ETH/BTC → Bitcoin dominance increasing
    • Bitcoin is the safer play, meaning risk appetite is lower.

🔥 Key Insight: If ETH/BTC is rising while BTC.D is falling, we’re entering an altcoin bull run.

Crypto Market Volume (VOL) – The Liquidity Indicator

What it Measures:

The total trading volume across all crypto markets.

Why it Matters:

  • High volume → Strong trend confirmation
    • If prices are rising with high volume, the move is legit.
  • Low volume → Weak or fake moves
    • If prices are rising with low volume, be cautious—it might be a trap.

📊 Key Insight: Always confirm breakouts with volume. A pump without volume is just exit liquidity.

DXY (U.S. Dollar Index) – The Macro View

What it Measures:

DXY tracks the strength of the U.S. dollar against a basket of foreign currencies.

Why it Matters:

The dollar competes with crypto as a store of value.

  • Rising DXY → Bad for crypto
    • A strong dollar means investors prefer fiat over risk assets.
  • Falling DXY → Bullish for crypto
    • A weak dollar means money is flowing into alternative assets like Bitcoin.

🌎 Key Insight: If DXY is dropping while BTC and TOTAL are rising, a crypto bull market is underway.

Emerging Indexes: The Future of Crypto Metrics

Beyond the classics, here are two emerging indexes that are gaining attention:

CEX vs. DEX Trading Volume

  • Tracks the shift between centralized (CEX) and decentralized (DEX) exchanges.
  • Rising DEX volume → More users prefer decentralized finance (DeFi).
  • Falling DEX volume → Centralized exchanges still dominate.

NFT & DeFi Market Cap Indexes

  • Measures the growth of NFTs and DeFi projects.
  • Rising NFT market cap → Interest in digital assets surging.
  • Rising DeFi market cap → Users seeking yield and decentralized finance solutions.

🔍 Key Insight: Watching DEX trading volume can foreshadow trends in DeFi and altcoin sectors.

How to Use These Indexes Together for BTC and Altcoin Price Action

No single indicator can tell you where the crypto market is headed, but when multiple indexes align, they are a strong indication of Bitcoin’s next move and whether altcoins will follow its lead or break away. 

Let’s break it down.

🚀 Bullish Signals for Bitcoin (BTC Price Increase)

If these indicators line up, Bitcoin is likely gearing up for a rally:

 ✅ BTC.D rising → Bitcoin is absorbing capital, signaling strength even if altcoins struggle.
✅ USDT.D falling → Investors are moving money out of stablecoins and back into BTC.
✅ TOTAL rising → Overall market cap is increasing, showing broad capital inflows.
✅ DXY falling → A weakening dollar makes Bitcoin a more attractive store of value.
✅ VOL (trading volume) increasing → A rising BTC price with strong volume confirms real buying pressure.

📈 Key Insight: If BTC.D is rising alongside BTC’s price and volume, Bitcoin is in a strong uptrend, even if altcoins lag behind.

⚠️ Bearish Signals for Bitcoin (BTC Price Decrease)

If these indicators align, Bitcoin could be heading for a downturn:

 🚨 BTC.D falling while BTC price drops → Bitcoin is losing both dominance and value, signaling widespread weakness.
🚨 USDT.D rising → Investors are fleeing to stablecoins, a clear risk-off move.
🚨 TOTAL declining → Market-wide capital outflows confirm selling pressure.
🚨 DXY rising → A strengthening U.S. dollar tends to put downward pressure on Bitcoin.
🚨 VOL decreasing while BTC price drops → Low volume on a decline means buyers aren’t stepping in (weak demand).

📉 Key Insight: If BTC.D is falling while BTC’s price and TOTAL are also dropping, the entire market is in risk-off mode, and a broader downtrend may be underway.

🚀 Bullish Signals for Altcoins

For alts to take off, these conditions should align:

 ✅ BTC.D dropping → Capital is flowing into altcoins.
✅ TOTAL, TOTAL2, and TOTAL3 rising → Altcoins are gaining market cap, confirming a shift in investor focus.
✅ USDT.D dropping → Traders are moving risk capital back into crypto.
✅ ETH/BTC rising → Ethereum outperforming Bitcoin often signals a broader altcoin rally.
✅ DXY falling → A weaker dollar supports risk assets like altcoins.

🚨 Bearish Signals for Altcoins

If these indicators align, altcoins are likely in trouble:

 🚨 BTC.D rising → Bitcoin is reclaiming dominance, often at the expense of alts.
🚨 TOTAL, TOTAL2, and TOTAL3 falling → Altcoins are losing value relative to Bitcoin.
🚨 USDT.D rising → Investors are seeking safety in stablecoins.
🚨 ETH/BTC dropping → Ethereum losing ground to Bitcoin signals broader weakness in altcoins.
🚨 DXY rising → A stronger dollar often leads to a lower risk appetite for altcoins.

By tracking these combined signals, you’ll always have an edge in predicting where the market is headed—before the crowd catches on.

Final Thoughts

The crypto market is an ocean of volatility, and these indexes are your compass. By tracking BTC.D, USDT.D, TOTAL3, ETH/BTC, and DXY, you can anticipate major market moves before they happen.

Don’t trade blind—use the data. And when the right signals align, you’ll be ready to ride the waves to profits.

What do you think? Which index do you use the most? Let me know!

MichaelHeadshot
Michael Hearne

I’m a serial entrepreneur, and I’ve spent the last 15 years taking companies to new levels, breaking the boundaries of innovation, and triumphing over adversity. My wife, Victoria, and I started our first business in a 2-bed/1-bath apartment with 4 kids, next to a crackhouse. We pushed through setbacks and failures to lift our family out of poverty. Along the way, I’ve learned that my struggles make me stronger. And that being the best version of me is the greatest contribution I can give to the world. It makes me a better husband, and father. It improves my health, energy, and my capacity to serve others. And it has allowed me to build businesses that make the world a better place. Today, I work for passion, to make a difference, and solve real problems in the real world through my business ventures. This little site is where I share the things I’ve learned, and am still learning, on my journey.