💉 There will be blood...
This is a positive post... ...sort of. If you heed the warning
I see a change in market sentiment. I now definitely see a change in market sentiment!
The people shouting "bear, bear, bear!" have gone quiet. Keeping my ear to the ground, the phrase I am hearing most is "during the next bull market". I've told you before: a market does what people expect it to do. I didn't make that up, it's common knowledge.
I'm actually busy drafting my next monthly "Index of posts" post, but this information is perhaps more pertinent and won't take long to convey. You can have the index tomorrow.
From https://www.pexels.com/photo/hand-full-of-blood-673862/
💉 There will be blood...
Five days ago when I wrote a blog post to say that I had observed the beginning of strange, new, positive market behaviour; I said this:
I can't tell you what this means for future price action, how long it will last or who is doing the buying. I can tell you that this is a change and that a change in investor behaviour could well signify some sort of change to the market as a whole.
That point remains valid. I don't believe that we are in the next big bull run yet. I believe the market will dip again before it runs properly. It shouldn't dip to any horrible new levels, just back to levels it has already been at a few times this year. After that it should climb, in waves, but in strongly positive waves.
I'm still expecting this sort of behaviour: (Taken from this post.)
Yes, I did predict the end of the bear market in that post 25 days ago. So far, so good...
Why the blood?
This is a warning to those who have not been in crypto for very long. It's a reminder to those who have.
BTC has a nasty habit of murdering altcoins when it gets into a bullish mood. In contrast to how BTC and altcoins are closely linked in less active markets, in a bull run BTC tends to lead the charge; leaving altcoins far behind. This causes the weaker hands (if there are still any of those left!) to sell their alts and buy BTC instead (perhaps clever hands is a better description...). Only once BTC starts to slow its climb do the alts catch up and have their revenge.
In plain English:
During the next big bull run I expect BTC to gain in market dominance. I expect altcoins to lose value relative to BTC, perhaps rather severely. I believe that it would be a good idea to start converting altcoins into BTC now as I am already seeing the signs of BTC starting this process.
Of course one must remember that past performance is not necessary indicative of future performance; but on the other hand, patterns do occur. I consider it likely that the altcoins will lose ground to BTC in the near to medium-term future.
I'm a hypocrite
Having said that, I'm going to do what I always do: hodl what I have. Sure I'll do the regular couple of trades, but I won't be cashing out all my alts into BTC. It's too much work (I have too many) and too much stress for me. I'll be holding my alts as is, believing that their time will come too. You can follow my hodl plan if you prefer, but I wouldn't necessarily advise it, it's not the optimal plan for making profits. This is a good time to "do as I say, not as I do".
Conclusion
Keep a close eye on the BTC dominance chart. It also has patterns (as I have blogged about before), but they are not well defined yet. Consider converting your altcoins into BTC before they get "murdered" by it during the next big bull run (which I still think we will see this year). As always DYOR.
The BTC dominance chart can be found here: https://coinmarketcap.com/charts/#dominance-percentage
I hope you are looking forward to having a shiny new index to my latest recent posts. It should be published tomorrow. Should be.
Yours in crypto,
Bit Brain
Published on
by Bit Brain
Holding alts has been painful for a while now, and I agree it's likely to continue if Bitcoin goes up. But on the other hand it does seem like the alts have pretty much all bottomed out. There is of course a chance that at some point alts might finally decouple - they're getting to be ridiculously cheap in some cases.
I too just hodl whatever I have. Best way to enjoy this market.
I had hoped that this wouldn't happen (again), especially with the alts, as you say "ridiculously" low. But I always have to remind myself that what happens in crypto is not necessarily what I want or expect, because BTC is starting to eat its young (again).
I doubt that it will continue for long, or that BTC dominance will go far beyond 50%, but I do think that going to BTC for the short to medium term is a good idea; until this cycle inverts.
Though as I said: I'm too old to play games, I'll be watching this from my comfortable lawn chair over in Camp Hodl.
I think this is a short term increase vs altcoins as the market decides which are the assets that will truly create value and those that will fail. Sorry to say that the days 5-10x gains are over for most assets that are listed and will list.
I agree with the first part of your statement, but I think (and hope) that the second part will come back to haunt you! I still forsee this market growing in value to MANY times what it is now. That's especially true for the low market cap coins. I hold coins that have total market caps of less than $1 Mil. If they succeed (not a certainty by any means!), then their growth factors will be in the hundreds to thousands!
I agree BTC will outperform alts when the real bull run takes place. Like you, I’m also not touching my longterm alt holds. The reason isn’t only laziness. It’s the fact I’d have to pay short term capital gains if I sell. What I'd loose by holding my alts in instead of converting them to BTC will be less than the tax penalty of trading to BTC. Of course I might be wrong. Because I’m not sure, why not error on the side of less work.
Good point