Crypto Total Market Cap Excluding Top 10 Dominance, %CRYPTOCAP
Description
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Many of us look at the Crypto market on a daily basis, multiple times a day in some cases. What are some of your top used apps? Blockfolio, CMC, Binance? When you look at these apps so often, it's easy to lose sight of the big picture. It's easy to over trade, to get scared of volatility, to be shaken out of good set ups. I've been there before and I'll be there again, but I'm working on controlling those impulses better.
I was part of the FOMO crowd December 2017. It was easy money. I didn't know what I was doing, so I lost my gains and then some. I could have given up, but that's not my mentality. I chose to learn and in doing so, I learned about a possible future of finance. I learned about a new asset class. With the way the world economy is going, Cryptocurrency becoming a dominant force doesn't seem that crazy anymore.
I zoomed out to the monthly Others dominance chart (i.e. everything but Bitcoin). The altcoin market hit the bottom of the channel in September 2019 and has been trending up since. Yes the fiat value of cryptos have fluctuated and individual altcoins and altcoin categories (e.g. privacy, exchange, DeFi, gambling, IoT--the list goes on) are over/under-performing the market in general, but as a whole, altcoin dominance has been going up since September 2019. A few projects bottomed at that time: LEND, KNC, RLC, CRO, and RCN are the few I can think of (mostly Binance coins) and performed well. Many others have found new lows this past spring.
There will be corrections along the way, we're probably coming up on one in the next few weeks (The weekly RSI for the Others dominance chart is approaching overbought), but overall the trend is up. If the trend breaks, then it's over until a new bottom is found and a new trend forms.
If Cryptocurrency is bullish for the upcoming year or two, which seems to be the case when you look on the general attitudes on Crypto Twitter, then altcoins will again outperform Bitcoin. If you look at the previous Altseason, altcoin dominance went from ~1.5% Dec 2016 to ~11% Jan 2018. That was a 7 x on average. We know there were a whole host of cryptos that did 10-100-1000 x within that time frame! This two year long bear market has scarred so many of us, it's easy to not believe that the same gains of 2017 could happen again.
The key for this altseason is the same as last season: choose your players and know when to GTFO.
1. Pick real projects with real use cases. Projects that won't take your money and exit scam (e.g. Centra, Bitconnect, etc.).
2. Pick real projects with lots of hype (or categories with lots of hype): companies with active marketing campaigns and active social media accounts. I don't know if I really care about the use-case, but if there is hype that will draw a buyers who will turn to followers. Example: XRP, TRX, DOGE, and recently LINK. Those all have a massive community. They also have a community who hate those respective coins. Don't love or hate a project. If it'll make you money, then don't let your personal opinions cloud your objectivity.
3. Don't marry your bags. Don't let greed overtake you. Don't be a bag holder.
4. ...But, marry your bags for a bit. It's cliche: let your runners run. Take partial profits at levels you think are reasonable, but don't fully exit. I bought BAND at the bottom and it went on to 5 x from where I sold it. Oof. I believed in BAND as a project but I chose to exit.
5. Take responsibility for your choices and actions. No one is forcing you to buy a 50% green candle and no one is forcing you to hold. If you follow shady characters on Twitter shilling a bag that has already 10x'd then that's on you as to whether you follow their "advice".
6. When everyone and their dog is making money in Crypto, when CNBC is telling you how to buy XRP at $100 a coin, and when the greed index is nearing 100%, consider cashing out and book profits. Buy fear and sell greed.
Almost every altcoin retraced their gains of their epic runs. Many have even made new lows. Even the most legitimate projects gave back their gains. The market doesn't care how good you think your Altcoin is. The market doesn't care about your hopes and dreams or how much you've invested. It doesn't give a flying f*ck who you are. People are on the other side of the screen waiting to take your money. Take theirs first.
Trade active
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It's alt season, I haven't really picked the best players to be honest, but I'm still learning. Number go up, is number go up.
Great post, very entertaining and educative, I enjoyed it.
Namaste.
Mybean
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Outstanding post, very good advice and I for one intend to take it. The small lesson I've learned is you can't pick all the winners so once you've identified the projects you think will grow, then make sure you have a good position so that when they run, you have a better chance of achieving a life changing increase in wealth. Make sure you have a good exit strategy and know where you're going to put those profits! Well done.
Namaste.