BTC.D & capital flow into altcoins

Core idea

BTC.D (Bitcoin Dominance) = total BTC market cap ÷ total market-wide market cap. BTC.D rising = capital is flowing toward BTC; BTC.D falling = capital is flowing toward altcoins. Reading BTC.D together with Total2 (total alt market cap, excluding BTC) is a way of watching capital flow — the thing that decides whether alts have a chance at all — instead of guessing at each alt coin individually.

Details

Two indicators, two different questions

• BTC.D answers: is money gathering into BTC, or spreading out into alts? For example, BTC.D = 40% means BTC's market cap is 40% of the total market cap.
• Total2 answers: is the whole family of alts expanding or shrinking?
• Both of these indicators also have structure, edge zones, ranges and waves just like a normal price chart → wave logic and RSI can be applied to them.

SIDEWAYS / DOWNTREND phase: sharks "act out BTC" to sweep up cheap alts

This is the flip side that few people notice (the uptrend side is already covered in Wave scenarios when the market IS TRENDING — money flows BTC → large-cap → mid/low-cap):

• Context after a distribution cycle: the sharks have already finished selling their alts, and most of the alts are now sitting in retail hands at high prices.
• The sharks' goal in the sideways/downtrend phase is not to pump alts so retail can recover their capital, but to make retail grow bored and let go of their alts at low prices on their own.
• The tool for doing that is acting out BTC: if BTC.D starts a corrective wave on the 1D/2D/3D timeframe, the coming phase leans toward BTC.D rising → BTC runs strong, alts crawl up (except a few low-caps heavily held by a pump team).
• Retail sees BTC up 10–15% while their own alt is only up 5–7%, and gets impatient — exactly the psychology the sharks need.

Two ways alts get sold off (both bad for whoever holds them)

1. BTC rises but the alt doesn't follow → the alt holder sells the alt to switch into BTC.
2. BTC falls → the alt, already an impatient holder, gets sold off harder than BTC. → Result: both directions of BTC drain the alt. That's why in this phase alts always come out worse off.

Reading the sharks' position through the BTC ↔ Total2 correlation

• BTC has returned to a support zone but Total2 hasn't reached its corresponding support (the alt has fallen LESS than BTC) → the crowd is still holding firm, not yet willing to capitulate → not yet time for the sharks to accumulate alts → there's no real alt wave yet.
• Conversely, once alts have been thoroughly shaken loose and Total2 forms a bottom structure before or together with BTC, only then is altseason worth discussing.

Consequences for capital allocation

• Prioritize 80–90% of capital in BTC during this phase. ETH is still worth watching; the teacher estimates the difficulty/risk of small alts at roughly 4x that of BTC.
• Low-caps worth a few tens of millions of dollars (especially projects heavily pumped in Vietnam): usually involve inside information / a handshake with a market maker → buying and selling there is "no different from a dice game," technical analysis is nearly worthless (see ban co du an altcoin).
• Alt futures should only be considered when the Weekly timeframe forms a clear breakdown edge (the alt falling more than BTC) — that is, trading exactly the "alt amplifies the downside" trait, not trading blindly.

Sign of "dirty money flow": BTC drifting sideways while a low-cap flies a few dozen percent

This is an on-the-spot recognition signal, no need to wait for BTC.D to finish drawing its pattern — usable the same day.

The order of capital flow in a REAL uptrend wave: BTC → top coins → mid-tier → small alts fly LAST. The whole basket rises smoothly and together.

A suspicious state: BTC is sideways/weakly rising, top coins and mid-tier coins aren't rising either, but shitcoins / low-caps are flying a few dozen percent. This is almost always unstable capital flow, not the start of a trend.

Mechanism (the most important part — it explains why, not just what): when BTC stands still, the team pumping the alt profits on both legs at once — profit measured in BTC and profit measured in dollars. If BTC is running, the alt/BTC exchange rate doesn't expand, which makes pumping the alt pointless. In other words, BTC being sideways is a necessary condition for pumping an alt to be profitable — so this phenomenon is a sign of "picking up loose change" while waiting, not a sign of big capital coming in.

Rebutting a very common misunderstanding. Many people interpret the phenomenon above as "the sharks pump alts so small fish sell BTC to chase alts, then the sharks scoop up cheap BTC." The teacher says that scenario is not correct at this phase, for a simple positioning reason: in the drifting phase after distribution, retail isn't even holding BTC anymore — they already jumped into alts earlier. With no BTC in the crowd's hands, there's nothing to lure them into selling. → The "pump alt to pull BTC out of the crowd's hands" scenario is only correct at the TOP of the cycle, exactly when the crowd has just FOMO-bought BTC and is holding a lot of it. Misreading the phase means applying the wrong scenario (ban co du an altcoin).

Minimum conditions to believe a medium-term wave is REAL

Before concluding "the market has started to run," demand both of these on the 12H/1D timeframe:

1. A price spike, and
2. A volume spike — it must overwhelm the volume of the nearby sideways zone, not just edge above it.

The reason is arithmetic, not a feeling: a 12H/1D wave at this scale is usually equivalent to roughly 20% of the market's total market cap. That level necessarily requires large capital to get involved, and large capital is forced to pick the most liquid asset — meaning BTC. So a real medium-term wave can't start with BTC standing outside it. Seeing the price inch up while 12H/1D volume still equals the sideways baseline means it's drifting, not running (Volume & the DXY index).

A force metaphor the teacher uses: to send the ball from your own half all the way to the opponent's goal, the goalkeeper has to kick it hard right from the start; if the ball gets passed around lazily right there in the back line, it will never make it up the field. The force of a big wave has to be visible from the bottom zone, not something that spontaneously appears halfway through.

Putting it into practice

1. Before deciding whether to touch alts, open BTC.D and Total2 as two independent charts: determine whether they're sideways or trending, and where they are in their own wave.
2. BTC.D entering a corrective wave/uptrend on the ≥1D timeframe → by default stay out of alts, concentrate capital in BTC.
3. Compare the correlation: when BTC returns to support, check whether Total2 has reached support yet. Alt falling less than BTC = the crowd hasn't capitulated yet = it isn't the alt's turn yet.
4. If you still want to hold alts: limit your allocation, prioritize large-cap, and only when there's a real uptrend/altseason (full conditions in ban co du an altcoin).

What the teacher stresses / common traps

• Biggest trap: thinking the sharks will pump alts so you can recover your capital. Their actual plan is the opposite — bore you into letting go of your holdings.
• Second trap: only watching the chart of the alt you hold, not the capital flow. An alt standing still while BTC flies isn't "its turn is coming soon" — it's usually a sign that no capital is flowing into it.
• Third trap: seeing a low-cap pump 5–10x and concluding "technical analysis works on alts too" — that's a coin with a pump team, not real supply and demand.

Related lessons

• Wave scenarios when the market IS TRENDING — the UPTREND side of the same capital-flow story (BTC → large-cap → alt); this note is the sideways/downtrend side
• Volume & the DXY index — the rest of the macro indicator toolkit: volume confirms real capital flow, DXY is the counterweight
• News & the market (narrative, good/bad news, capital flow) — alt narrative is a tool for releasing news according to wave position
• Risk wave vs profit wave (the 80/20 rule) — why this phase demands playing defense first