Using the Bitcoin dominance to understand the flow of money within the cryptocurrency market, particularly the rotation of investment between Bitcoin and altcoins (including large-cap, mid-cap, and low-cap cryptocurrencies).
So what does this chart tell you about the stated goal?
joaobrocatto
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I'm not an experienced trader, just practicing and being skinn in the game, but from my learnings and understandings, when BTC dominance hits major resistance levels, it could (I'm not saying it is, but it could) indicate stress from the buying side.
This means that profits might not be as high for the new eye balls that got to the market on its hights, and investors may start searching for other types of coins in pursuit of giga gains.
This situation maybe highly correlated with the Fear and Greed Index, especially when it involves hitting highs of 80-90 on the greed level in the last few weeks but we need more to validate this idea.
BTC money outflows needs to be getting bigger and total3 be in an uptrend line.
But I don't think this is not a setup for a initial bull run. I'm just backtesting it.
This is a tool for degen market, where btc is hitting consistently new hights and we need to understand when altcoins party starts and ends.
joaobrocatto
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I'm seeing you're very insightfull in your analysis, what do think you about my thought process?
I think you made some good points. There certainly is the perception of diminishing returns of the more mature bitcoin market. I suppose that's a reason for the popularity of altcoin season, when even small investors can be very happy.