📈Bitcoin's dominance has grown to 45%, while most altcoins have fallen by 75-90% from their ATH. One Luna🌔 lost $18 billion in capitalization. Why do we need this dominance and how it helps to increase the win rate? I'll explain it in this idea.
💼What is dominance? Bitcoin dominance is the ratio of the capitalization of the major cryptocurrency ( BTC ) to the total capitalization of cryptocurrencies. Simply put, % of Bitcoin's capitalization in the TOTAL capitalization of the crypto market (Bitcoin+Altcoins). Now it`s 45%.
💹What does dominance help to identify? As we can see from the 8% dominance growth, altcoins are getting weaker. But why does this happen? It is because of the panic of retail traders. In search of a quick profit and investing all their depo in altcoins without any analysis, they have lost significant capital and are trying to sell them as fast as possible despite the 90% fall of alts.
✅The key level of 50%, when the value of all altcoins=the value of all Bitcoins, will be the huge resistance to Dominance. Bitcoin can reach that level if it can drop to $23-25k and all retail investors finally panic sell off their alcoins, pushing the price down. That would be the best place to buy, but I'll tell you about that later.
🏁Let me know if you want to know more about altseasons: why and when it`s happen? Altseason is the best opportunity to grow your deposit.
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P.S. Personally, I open an entry if the price shows it according to my strategy. Always do your analysis before making a trade.
If you believe in the 4 year cycle theory, I would strongly suggest waiting till the 2024 halving to buy Altcoins. Being in a cyclical bear market, we simply do not know which altcoins will survive the crypto winter. Unless you are investing in blue-chip altcoins that you are absolutely certain will weather these economic conditions, you are vastly increasing your downside risk. Bear in mind, that there are several indicators to suggest that the market bottom is not in (though there are a handful to suggest it is). Even if you are absolutely certain your altcoin will survive, you will need to factor in the event bitcoin drops 50 percent, most altcoins (excluding ETH perhaps) will drop 70-90 percent and some may never recover from this drop.
Full disclosure, I sold ALL of my altcoins for BTC at the 45-48k rally that occurred in April, and am now 100% allocated in BTC and stablecoins or fiat equivalent(USDC/BUSD). Accumulating BTC during this bear market, with some more aggressive BTC buys as we drop further
I would suggest waiting for the halving and swapping some BTC for alts during this period to minimize your downside risk. NFA, DYOR, just my 2 cents :)