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Bitcoin Strength Index (BGE)

PreviousDominance Momentum Oscillator (DMO) Chart

Last updated 8 days ago

The Bitcoin Strength Index (BGE) is a technical indicator that measures Bitcoin's dominance and influence in the market by considering both its price and trading volume. It helps traders assess whether Bitcoin is gaining or losing market control.

BGE Formula:

Where:

  • BTC Dominance represents Bitcoin’s share in the total cryptocurrency market capitalization.

  • BTC Volume is the total trading volume of Bitcoin.

  • Total Market Volume is the overall trading volume of all cryptocurrencies.

  • BTC Price is the current price of Bitcoin.

How to Interpret BGE?

  • Rising BGE: Bitcoin is strengthening, indicating that it is dominating the market. Traders may favor Bitcoin over altcoins.

  • Falling BGE: Bitcoin’s influence is declining, suggesting that altcoins might be gaining momentum.

Key Considerations for Traders Using BGE

  1. Market Leadership:

    • If BGE is rising, Bitcoin is leading the market, and investors may shift funds into BTC.

    • If BGE is falling, it could signal an increasing interest in altcoins.

  2. Volatility Tracking:

    • Since BGE incorporates both price and volume, it can indicate whether Bitcoin’s strength is supported by real market activity.

  3. Confirming Market Trends:

    • Using BGE alongside RSI, MACD, or moving averages can help traders confirm whether Bitcoin’s strength is sustainable or weakening.

Conclusion:

The Bitcoin Strength Index (BGE) is a valuable tool for assessing Bitcoin’s market dominance and overall strength. By analyzing its price, volume, and dominance together, traders can better understand market cycles and anticipate shifts between Bitcoin and altcoins.

🚀 BGE is especially useful for identifying Bitcoin-led bull runs or the potential start of an altcoin season.