The Crypto Carousel: BTC, ALTS, and the Money Merry-Go-Round
✅Bitcoin Dominance, BTC, Altcoins✅
Today we're diving into the fascinating world of money rotation within the cryptocurrency subclasses. We're talking about the rotation of cash between Bitcoin and altcoins, its younger, more diverse siblings.
Imagine a pie where each slice represents a different cryptocurrency. The pie here indicates the total cryptocurrency market cap of both Bitcoin and altcoins, which can increase or decrease at any given time. In other words the TOTAL chart.
- If BTC market cap increases but altcoin market cap shrinks (relative), the pie stays the same size.
- If BTC market cap increase and altcoin market cap increases, the pie size increase and so forth.
Total Market Cap (
TOTAL
) and BTC.D
Now, imagine a big shiny carousel. Bitcoin is the majestic stallion at the center, while altcoins are the colorful horses surrounding it. Riders (investors) hop on and off, injecting money into the ride (buying) and taking it out (selling). This constant movement is what keeps the crypto carousel spinning.
Let's break it down with visuals:
Chart 1: The Bitcoin Rollercoaster
This rollercoaster represents Bitcoin's price action, and also my view on where we are in the current cycle. (I believe we're in a multimonth correction, followed by the last impulse wave up). You'll need this to know where we are in the cycle right now / LOWER-STABLE:
Chart 2: Bitcoin & Bitcoin Dominance Dance
This chart shows Bitcoin's dominance, which is basically its share of the total crypto market capitalization (market cap = total value of all cryptocurrencies). When Bitcoin's dominance goes up (higher on the chart), it means investors are putting more money into Bitcoin, potentially at the expense of altcoins. Conversely, when dominance goes down, it suggests capital is flowing towards altcoins. The difference is clear:
Chart 3: BTC.D vs TOTAL3
In this chart, we overlay the Total 3 Priceline (turquoise) on top of the Bitcoin Dominance chart. TOTAL3 shows us all alts except ETH.
The Bitcoin Rollercoaster and the S&P 500:
Imagine Bitcoin's price as a rollercoaster. When Bitcoin surges (line goes up), it can sometimes lead to increased investor risk appetite. This might entice some investors to move funds from the S&P 500 into riskier assets like Bitcoin, potentially causing a slight dip in the S&P 500. Conversely, when Bitcoin experiences a price drop, investors might flock back to the perceived stability of the stock market, potentially causing a rise in the S&P 500.
So, is there a guaranteed correlation?
Not quite. The crypto market is a complex beast. But by understanding the relationship between Bitcoin, altcoin prices and dominance, you can get a better sense of where the money merry-go-round might be headed.
Remember, this isn't financial advice! Do your own research before making any crypto investments. But hey, with this knowledge under your belt, you're one step closer to navigating the world of crypto rotations!
_______________________
Today we're diving into the fascinating world of money rotation within the cryptocurrency subclasses. We're talking about the rotation of cash between Bitcoin and altcoins, its younger, more diverse siblings.
Imagine a pie where each slice represents a different cryptocurrency. The pie here indicates the total cryptocurrency market cap of both Bitcoin and altcoins, which can increase or decrease at any given time. In other words the TOTAL chart.
- If BTC market cap increases but altcoin market cap shrinks (relative), the pie stays the same size.
- If BTC market cap increase and altcoin market cap increases, the pie size increase and so forth.
Total Market Cap (
TOTAL
) and BTC.D
Now, imagine a big shiny carousel. Bitcoin is the majestic stallion at the center, while altcoins are the colorful horses surrounding it. Riders (investors) hop on and off, injecting money into the ride (buying) and taking it out (selling). This constant movement is what keeps the crypto carousel spinning.
Let's break it down with visuals:
Chart 1: The Bitcoin Rollercoaster
This rollercoaster represents Bitcoin's price action, and also my view on where we are in the current cycle. (I believe we're in a multimonth correction, followed by the last impulse wave up). You'll need this to know where we are in the cycle right now / LOWER-STABLE:
Chart 2: Bitcoin & Bitcoin Dominance Dance
This chart shows Bitcoin's dominance, which is basically its share of the total crypto market capitalization (market cap = total value of all cryptocurrencies). When Bitcoin's dominance goes up (higher on the chart), it means investors are putting more money into Bitcoin, potentially at the expense of altcoins. Conversely, when dominance goes down, it suggests capital is flowing towards altcoins. The difference is clear:
Chart 3: BTC.D vs TOTAL3
In this chart, we overlay the Total 3 Priceline (turquoise) on top of the Bitcoin Dominance chart. TOTAL3 shows us all alts except ETH.
The Bitcoin Rollercoaster and the S&P 500:
Imagine Bitcoin's price as a rollercoaster. When Bitcoin surges (line goes up), it can sometimes lead to increased investor risk appetite. This might entice some investors to move funds from the S&P 500 into riskier assets like Bitcoin, potentially causing a slight dip in the S&P 500. Conversely, when Bitcoin experiences a price drop, investors might flock back to the perceived stability of the stock market, potentially causing a rise in the S&P 500.
So, is there a guaranteed correlation?
Not quite. The crypto market is a complex beast. But by understanding the relationship between Bitcoin, altcoin prices and dominance, you can get a better sense of where the money merry-go-round might be headed.
Remember, this isn't financial advice! Do your own research before making any crypto investments. But hey, with this knowledge under your belt, you're one step closer to navigating the world of crypto rotations!
_______________________
Comment:
Considering the rotation of money between BTC and alts; here's a list of ALTCOINS that are underperforming:
