Tracking a nice bounce on BTC dominance here, in my opinion the head and shoulders at the recent highs of this chart was targeting the location of the bounce, but it will take a couple of more days to confirm this and to see if BTC dominance starts climbing once again. This is just an idea and I am not planning anything around it, but if dominance climbs and stalls at the theoretical levels I have drawn (rather crudely), then we have the makings of an even larger head and shoulders that would see Bitcoin dominance plummet to levels not seen yet. Only a a theory at this point, but a very real possibility. I've heard some people say that the future is alts...
I don't see Bitcoin losing all relevance but I do see dominance waxing and waning over the years. There is the potential to make very decent profit with this chart as a rough guide on when to convert BTC into ALT and visa versa. One factor that will keep BTC very relevant in the medium to long term is the ever-constricting supply which will lead bitcoin price higher by and order of magnitude as new BTC becomes more difficult to source. As always, having a relatively diverse portfolio but keeping the majority of funds in BTC and then ETH, with an even smaller amount in some Alts is a safer way to keep increasing net worth and/or preserving purchasing power over the long term until government monetary policy changes to include sound money principals - in other words not likely in the next few years.
Also this, an observation, now that a fair bit of new money has bought ETH at 2 year highs, there is the danger that if ETH retraces and goes lower over the short-to-medium term (say a couple of weeks), a bit of that new money might actually look at the chart and get scared after they perceive a drawdown and fear additional losses on ETH. Should this happen, selling will beget selling. Where will this money go? Some of it will go into BTC (correctly in my humble opinion), but some of it will find a way into smaller cap ALTs and this might actually trigger "Alt Season." The cycle will complete and the smarter money will eventually exit Alt Season at the peak, and the dumb money will be left holding bags of worthless vapourware tokens when the time comes. Not all Alts are vapourware, but doing research is key in this case.
As always, if you do not have the time to research alts, as a new investor to this sector, I would caution anyone on investing in anything but BTC and ETH, the rest of the Top ten has seen much rotation over the last few years and will likely continue to see rotation. In this case if you are holding the majority of your economic power in one of the top ten and that project loses market cap and possibly top ten status, well congratulations, you have become a bag-holder by definition. I consider myself fortunate that in most of the cases where I have been a bag-holder, it has been with a very small percentage of my account in most cases.
I don't see Bitcoin losing all relevance but I do see dominance waxing and waning over the years. There is the potential to make very decent profit with this chart as a rough guide on when to convert BTC into ALT and visa versa. One factor that will keep BTC very relevant in the medium to long term is the ever-constricting supply which will lead bitcoin price higher by and order of magnitude as new BTC becomes more difficult to source. As always, having a relatively diverse portfolio but keeping the majority of funds in BTC and then ETH, with an even smaller amount in some Alts is a safer way to keep increasing net worth and/or preserving purchasing power over the long term until government monetary policy changes to include sound money principals - in other words not likely in the next few years.
Also this, an observation, now that a fair bit of new money has bought ETH at 2 year highs, there is the danger that if ETH retraces and goes lower over the short-to-medium term (say a couple of weeks), a bit of that new money might actually look at the chart and get scared after they perceive a drawdown and fear additional losses on ETH. Should this happen, selling will beget selling. Where will this money go? Some of it will go into BTC (correctly in my humble opinion), but some of it will find a way into smaller cap ALTs and this might actually trigger "Alt Season." The cycle will complete and the smarter money will eventually exit Alt Season at the peak, and the dumb money will be left holding bags of worthless vapourware tokens when the time comes. Not all Alts are vapourware, but doing research is key in this case.
As always, if you do not have the time to research alts, as a new investor to this sector, I would caution anyone on investing in anything but BTC and ETH, the rest of the Top ten has seen much rotation over the last few years and will likely continue to see rotation. In this case if you are holding the majority of your economic power in one of the top ten and that project loses market cap and possibly top ten status, well congratulations, you have become a bag-holder by definition. I consider myself fortunate that in most of the cases where I have been a bag-holder, it has been with a very small percentage of my account in most cases.