Analysis of TOTAL2 Dominance: The Altcoin Market Share Indicator
In the thrilling and highly volatile world of cryptocurrency markets, investors are always seeking tools that can help them make more precise and informed decisions. Among these tools are indicators that show the relative share of different assets in the overall market. Within this framework, TOTAL2 Dominance is a lesser-known but highly practical metric that plays a critical role in market analysis.
In this article from iX Broker, we provide a comprehensive guide to understanding TOTAL2 Dominance, its importance, how to analyze it, and how to apply it strategically within the digital asset market.
What Is Dominance?
To better understand TOTAL2 Dominance, it’s essential to first grasp the general concept of dominance. In simple terms, dominance refers to the proportion or share a particular cryptocurrency holds within the total market. This figure is calculated as a percentage and indicates how much of the overall market cap is attributed to a specific digital currency.
The most commonly referenced metric in this context is Bitcoin Dominance (BTC Dominance). For example, if Bitcoin Dominance is 47%, it means that Bitcoin constitutes 47% of the total cryptocurrency market value.
Alongside BTC Dominance, there’s also the TOTAL2 index, which focuses exclusively on altcoins, excluding Bitcoin.
What Is TOTAL2 Dominance?
TOTAL2 Dominance refers to the percentage of the total cryptocurrency market cap that belongs to all digital assets excluding Bitcoin. To understand this metric, it’s important to recognize the classifications found on platforms like TradingView:
- TOTAL: Total market capitalization of all cryptocurrencies (Bitcoin + Altcoins)
- TOTAL2: Market capitalization excluding Bitcoin
- TOTAL3: Market cap excluding both Bitcoin and Ethereum
This article focuses on TOTAL2. Therefore, TOTAL2 Dominance reflects the market share of altcoins (excluding BTC) in relation to the total market.
Why Is TOTAL2 Dominance Important?
The significance of TOTAL2 Dominance lies in its ability to show whether capital is flowing into altcoins. This insight is particularly valuable during periods of market trend shifts. Key reasons why this index matters include:
- Identifying the Altseason
- Gauging market sentiment toward risk
- Detecting capital inflow or outflow in altcoins
- Supporting technical signal confirmations
- Analyzing market cycles and potential reversals
How Is TOTAL2 Dominance Calculated?
The formula for calculating TOTAL2 Dominance is as follows:
(TOTAL2 ÷ TOTAL) × 100
For example, if the total crypto market cap (TOTAL) is $1.5 trillion, and TOTAL2 is $900 billion, the TOTAL2 Dominance would be:
(900 ÷ 1500) × 100 = 60%
This means that altcoins account for 60% of the entire cryptocurrency market.
How to Analyze TOTAL2 Dominance
Like any other price chart, the TOTAL2 index can be evaluated using technical analysis tools. These include support and resistance levels, classical chart patterns, and indicators such as RSI, MACD, Moving Averages, and Fibonacci retracement levels.
The most important point in analyzing this metric is correlating it with Bitcoin Dominance and BTC’s price chart.
Common Market Scenarios:
- Rising TOTAL2 Dominance + Rising BTC = Bullish for Altcoins
- Falling TOTAL2 Dominance + Rising BTC = Stronger Bitcoin Dominance, Altcoin risk-off
- Rising TOTAL2 Dominance + Falling BTC = Possible altcoin recovery or short-term opportunity
TOTAL2 Dominance and the Start of Altseason
One of the most exciting uses of the TOTAL2 Dominance metric is its potential to help forecast the Altseason—a period when many altcoins outperform Bitcoin significantly.
If you observe a rising TOTAL2 Dominance accompanied by increasing trading volume across altcoins, it may signal the early stages of an Altseason.
Risks of Misinterpreting TOTAL2 Dominance
Just like any other market indicator, TOTAL2 Dominance can occasionally present misleading signals. For instance:
- If Bitcoin experiences a sharp decline while altcoins remain steady, TOTAL2 Dominance may rise—but this growth is not necessarily genuine.
- Sometimes, sudden spikes in TOTAL2 can result from pump-and-dump activities involving low-value tokens.
To minimize the risk of misinterpretation, always analyze this index in conjunction with TOTAL, BTC Dominance, and Bitcoin’s price action.
Practical Applications for Traders
- Identifying ideal entry points into altcoins
- Timing exits from high-risk market phases
- Supporting volatile trade signals
- Combining with BTC Dominance for capital flow analysis
- Integrating into portfolio management strategies
Conclusion
TOTAL2 Dominance is a valuable metric for understanding the behavior and performance of altcoins within the broader crypto market. It can significantly improve your timing in entering and exiting positions, ultimately leading to smarter investment strategies.
However, remember that no single indicator is ever complete on its own. Always use TOTAL2 Dominance in combination with other metrics and analysis methods to gain a comprehensive view of market dynamics.
