Bitcoin Dominance, Mirror Wedges, & The Long Term Downtrend
This chart is pretty simple. I'm not going to go really deep here in terms of why I think this may play out. I'm just noticing a potential pattern and drawing a speculative chart to show what COULD happen if Bitcoin dominance is in a long term downtrend. In the 2016-2017 bull market, dominance only started declining once Bitcoin passed its all-time-high, but it may not happen that way this time around.
Chart features:
RED - Potential Downtrend lines for dominance that can be traced back to the period between 2014 and 2017.
PINK - Reflective wedges showing downside acceleration followed by correction to the upside. Downside occurs in a broadening wedge formation, while upwards correction occurs in the form of a rising wedge.
ORANGE - Pathway that would include a new low for Bitcoin dominance, potentially around 30%. We are very close to the wedge support at this point. If it doesn't hold, I expect an acceleration to the downside for dominance.
Bearish Possibility for Alts and Crypto
We have a couple of bearish possibilities:
1) Dominance increases because Bitcoin wants to test ATH first. It can head up towards 79%-80%. If it heads to 90%, I don't think that would be good for the crypto sphere as a whole.
2) Dominance increases because Bitcoin cannot hold current levels, and the entire market falls apart.
3) Dominance increases back to 95%+, erasing the entire altcoin market. Bitcoin wins out as the only cryptocurrency used globally aside from national-backed cryptos.
I think #1 is the most likely, if dominance is to increase. But...dominance is in a long term downtrend. Unless it gets back to 90% and above, I won't be worried. This cycle is quite painful for altcoin holders, but I do expect projects with widespread use will at least try to compete with Bitcoin over the next 5 years.
That's it! This is not financial advice. This is entirely speculative, and should be treated as such.
-Victor Cobra
Chart features:
RED - Potential Downtrend lines for dominance that can be traced back to the period between 2014 and 2017.
PINK - Reflective wedges showing downside acceleration followed by correction to the upside. Downside occurs in a broadening wedge formation, while upwards correction occurs in the form of a rising wedge.
ORANGE - Pathway that would include a new low for Bitcoin dominance, potentially around 30%. We are very close to the wedge support at this point. If it doesn't hold, I expect an acceleration to the downside for dominance.
Bearish Possibility for Alts and Crypto
We have a couple of bearish possibilities:
1) Dominance increases because Bitcoin wants to test ATH first. It can head up towards 79%-80%. If it heads to 90%, I don't think that would be good for the crypto sphere as a whole.
2) Dominance increases because Bitcoin cannot hold current levels, and the entire market falls apart.
3) Dominance increases back to 95%+, erasing the entire altcoin market. Bitcoin wins out as the only cryptocurrency used globally aside from national-backed cryptos.
I think #1 is the most likely, if dominance is to increase. But...dominance is in a long term downtrend. Unless it gets back to 90% and above, I won't be worried. This cycle is quite painful for altcoin holders, but I do expect projects with widespread use will at least try to compete with Bitcoin over the next 5 years.
That's it! This is not financial advice. This is entirely speculative, and should be treated as such.
-Victor Cobra
Comment:
Looks like we can head to the high 70's/low 80's if it breaks out from here. On the downside, there's a lot of room to fall, so traders may wait until Bitcoin is at peak hype to activate this breakdown. As we've seen in the past, dominance didn't really plummet until Bitcoin retested ATH.
Comment:
Interestingly, dominance failed to break out and has now headed towards the wedge support, as I've been suspecting needed to happen anyway, even if Dominance is to make a new high. Crypto traders should monitor this closely. If dominance breaks down heavily below the pink line, we can have a very large altcoin resurgence.
Comment:
If I shift over the line a bit (there's some room to move it around a little), we bounced right off the trendline today. Let's see how the daily closes.
