How to Trade the Bitcoin Cycle for Profit

in #bitcoin6 years ago (edited)

Bitcoin dominance has finally eclipsed 40%, a milestone it hasn't achieved since the beginning of the year as altcoins had killer returns in December and the very beginning of January. Bitcoin has been testing that 40% level for the past week or so now and finally broke above it and is sitting close to 41% now at the time of writing this.

If you're holding altcoins right now, you've probably been getting hammered still despite the market recovering fairly well from its monsterous drop. If you're in this position, it might be tempting to continue holding your altcoins, but I still suspect that Bitcoin is overall favored to continue rising in relation to altcoins now that we have broken past 40% dominance.

If you recall from my video where I discussed why Bitcoin is a superior investment to altcoins, I talked about 3 groups:

  1. Group #1 shifts their portfolio in ANTICIPATION for a cycle shift from altcoins to Bitcoin (or vice versa)

  2. Group #2 shifts their portfolio AFTER momentum starts moving in favor of a new cycle, or in other words once altcoins start to shift into Bitcoin (or vice versa)

  3. Group #3 waits a while, then convinces themselves they're part of Group #2 and jumps on board last - completing the cycle and usually end up being the bag holders.

Sometimes Group #1 profits more (depends on how early they were - too early can dampen profits), sometimes Group #2 profits more - but either way, usually Group #3 comes in dead last. Don't be part of Group #3. We are starting to see the beginnings of Group #2 - the boat has sailed on being part of Group #1.

However, despite believing Bitcoin to be superior, we are seeing some interesting price levels in certain altcoins on the market. For instance, Cardano - which admittedly has limited trading history - is trading close to previous support and might be a decent pick-up even though I still suspect the cryptoasset is overvalued.

For trading DURING the Bitcoin cycle, I am watching very closely certain cryptocurrencies like Monero and Steem which I view as strong holds and would like to acquire more for lower prices (Monero just hasn't been dipping though sadly).

The point is that during a Bitcoin cycle, you should start looking at altcoins that start trading near support or around their 100 - 200 day moving averages (and even below them). In other words, buy low. The time to sell (for either BTC or USD) is when the next altcoin cycle begins, similar to how we are looking to trade our BTC for alts as its value increases in proportion to them.

What are your thoughts on the market? Do you think we are moving into a Bitcoin cycle? Perhaps you think the volume is too low to say for certain? That's a topic I'll probably discuss in anotehr video here soon - but I'd love to hear your thoughts. Thank you for watching / reading.

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You will have a great opportunity with the steem price because of the current problems with the poloniex wallets. Check @transisto's post on the matter: https://steemit.com/bitcoin/@transisto/circle-buying-poloniex-and-why-it-s-making-steem-price-go-down-temporarily

Yeah Poloniex has not been fun (at least in my opinion), but if it provides an opportunity for Steem then I'm happy. I tend to think it's also just general market correction too though, but either way - an opportunity is an opportunity.

Hello @cryptovestor, I usually don't drop links around, but you are one of the people on the cryptoverse that i truly respect, because your opinions are well fundamented, and you don't talk bullshit only to appease your audience.

So, i would like your opinion on something i wrote about value and price of steem, specially the last part, where i talk about the STEEM and SBD price.

I see a lot of people using the pair STEEM/USD to define if the value of the coin is increasing or not, but i quickly noticed that STEEM and SBD isn't being traded for USD on any significant exchange, so i would like to know if what i wrote about it makes sense or not.

BTW, i like the new thumbnails on your videos.

I think that we are definitely entering a Bitcoin cycle , and if such an uptrend does occur is it not the case that many of the altcoins will hitch a ride and also go up in value ?

They will go up in USD value but down in BTC satoshi value

From what I've seen, each cycle seems to reveal more and more coins with non-correlating charts. But in (logical) theory, when trading against BTC, Bitcoin's rise inherently causes the alts to drop satoshis.

Even so, what Mr. CI says here still holds true - look to exit weaker alts while watching for the exceptions.

See what devinrose said.

(Sorry, i wrote some bullshit here. You do vote people that comment your posts. Just was looking at the wrong page)

What are youre opinions on Request Network (REQ)? Have you ever looked into it?

OK you want thoughts, here goes. I hold some of all 3 bitcoins. I don't try and trade back and forth, i buy and hold. I hold a dozen alts lean heavily toward litecoin, and bought several ICO's. Made a killing on a couple and took profits to see them drop 50% later. I say always take profits when you hit something that does 1000% or more. I have bought 6 ICO's year to date and will pick up another this month and hold for 5-6 months. I believe in a diversified portfolio and don't like to put all my eggs in one basket....as always thanks for your opinions, you put it all out there.

Thanks for sharing jimbo - Taking profits in hype markets is one of the hardest, but best things you can do, at least in my opinion.

This is the most unsurprising video you have ever made for anyone who has been following you for any real length of time. LOL. I almost feel like the title of this video should be "I told y'all bitches, but nobody wants to listen"

You made no reference to the fact that your prediction (about a month ago or so) that BTC dominance will rise and for which you were doubted by many, came true. To your credit, you never mentioned this once. My hat’s off to you sir.

Your sarcasm was pretty evident, the irony and the punchline was on those who didn't catch it. Was a great video btw. I see BTC continue to go sideways with little pump and dumps here and there. Not a confidence booster for trading alts. Random select alts pumping and dumping as other alts dip compared to BTC. People will continue to pile into BTC like you say. Bad news are starting to be in the rear view mirror now, but still think that we're one bad news away from sinking more. I'm excited for platforms like Cardano and EOS to launch, I think it's going to create a new perspective on how blockchain tech will be adopted and what's possible, make shitcoins look like what they really are, and re-igniting enthusiasm and the next hype cycle.

Thanks for your thoughts hors, glad you enjoyed the last video.

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