Altcoin season officially over - BTC takes over
Starting with last cycle and the emergence of altcoins in the cryptoverse, BTC has been in a tango with them - either dominating the market or allowing alts to shine.
This dance can be seen in the BTC dominance chart
BTC.D
When comparing the last and current cycles, we notice some key differences:
1. The market has matured. We've had no blow-off top - either because institutional money is influencing price instead of FOMO or people realized that the blow-off top doesn't last for long and decided to take profits earlier. Or both.
2. Trading opportunities have grown exponentially. Last cycle, during the bear market, BTC has regained dominance swiftly. So far in this cycle, BTC dominance has been bouncing around 39%-48%. Why keep your value in a bearish asset when you can play a short term trade to grow your value?
3. People are not leaving the cryptoverse entirely. While last cycle you could either switch back to BTC safehaven or exit to FIAT, today many are using stablecoins to keep their portfolio value waiting for the next opportunity to enter a trade.
For the last two cycles BTC has spent a considerable amount of time in the Value Area (area between .618 and .786 Fib retracement from bottom to top) and found the market bottom below this area. Some say that the bottom is in, others that we still have a leg down to reach the market bottom. Either way, we are not far from it.
What we can state as more probable than less probable is that we still have at least 3 months to spend in the Value Area before moving up. Depending on how you measure it, we could still be here for the next year or so.
During this time (3-12 months) I expect BTC dominance to rise no matter if its USD valuation rises, falls or ranges. Whether it will find resistance around 48% or move to the next level at 58%, we'll have to see. But in the medium term, the dominance looks very likely to move up.
PRO TIP: We are still in a bear market. Now is the time for accumulation. If you have in your portfolio alts that are overvalued compared with BTC, there is an opportunity to trade for accumulation. This means trading it to BTC now to buy more back with same BTC later.
This dance can be seen in the BTC dominance chart
BTC.DWhen comparing the last and current cycles, we notice some key differences:
1. The market has matured. We've had no blow-off top - either because institutional money is influencing price instead of FOMO or people realized that the blow-off top doesn't last for long and decided to take profits earlier. Or both.
2. Trading opportunities have grown exponentially. Last cycle, during the bear market, BTC has regained dominance swiftly. So far in this cycle, BTC dominance has been bouncing around 39%-48%. Why keep your value in a bearish asset when you can play a short term trade to grow your value?
3. People are not leaving the cryptoverse entirely. While last cycle you could either switch back to BTC safehaven or exit to FIAT, today many are using stablecoins to keep their portfolio value waiting for the next opportunity to enter a trade.
For the last two cycles BTC has spent a considerable amount of time in the Value Area (area between .618 and .786 Fib retracement from bottom to top) and found the market bottom below this area. Some say that the bottom is in, others that we still have a leg down to reach the market bottom. Either way, we are not far from it.
What we can state as more probable than less probable is that we still have at least 3 months to spend in the Value Area before moving up. Depending on how you measure it, we could still be here for the next year or so.
During this time (3-12 months) I expect BTC dominance to rise no matter if its USD valuation rises, falls or ranges. Whether it will find resistance around 48% or move to the next level at 58%, we'll have to see. But in the medium term, the dominance looks very likely to move up.
PRO TIP: We are still in a bear market. Now is the time for accumulation. If you have in your portfolio alts that are overvalued compared with BTC, there is an opportunity to trade for accumulation. This means trading it to BTC now to buy more back with same BTC later.
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