How to Trade the Bitcoin Cycle for Profit
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:
Group #1 shifts their portfolio in ANTICIPATION for a cycle shift from altcoins to Bitcoin (or vice versa)
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)
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.