Today a quick post about the Bitcoin dominance, compared to the rest of the crypto market (Altcoins). A few months back I posted about this chart (weekly chart) and showing that Bitcoin was bottoming and that we were likely going to see a reversal, meaning Altcoins moving down in dominance and Bitcoin moving upwards. This is happening steadily and strongly for BTC, but it seems that we are going to hit resistance very soon ! This week it seems already. Here is a weekly chart :
I have drawn a yellow channel (very strong channel), a blue line (I keep it on although it seems unlikely it will get hit) and a green horizontal line, in case BTC breaks upwards above the yellow channel.
Bitcoin has been rising in dominance strongly ever since its bottom in September 2020. Altcoins had their season and it was clear to see in the dominance chart that BTC was bottoming out in terms of its dominance. There was a bullish divergence for BTC in August/September looking at the RSI (going upwards), while the dominance of BTC was still going downwards. The question is of course if you can chart this type the same way as normal price charts for BTC and Altcoins, but it seems to be working. Bitcoin started to rise and Altcoins were starting to loose dominance and even starting to decline in dollar prices. This has been happening for weeks now and BTC has its time right now.
When looking at this chart, you could have guessed that BTC was going to run towards the top of the yellow channel and it is happening. This means as well that you could have been patient for Altcoins and their decline in prices. Right now we see Bitcoin is going to hit the top of the yellow channel and most likely it is going to stall and meet resistance. This could well mean bottoms in dollar prices for Altcoins and you can start to nibble in with small amounts ! The RSI is going erect as well and this will stop at some point of course. Bitcoin just broke 14K in dollar price and this is great news of course. I hope we will see a move towards 16K, move back down towards 14K, hold it as support (which means dominance likely moving down a little bit compared to Altcoins) and after that try in December a Christmas run towards 20K ! This would mean that dominance is going to break the yellow channel, but might top out around the green horizontal line at around 68,11%. RSI would go towards overbought as well, which would be confluence.
After this Altcoins could get their Altseason in the first quarter of 2021, which often seems the case for them (first quarters in a year seem to work wonders for Altcoins). Looking at Ethereum launching 2.0 it seems reasonable for Altcoins to jump up since they like to follow ETH. Going slowly in right now in your favorite Altcoins is not a bad choice and keep some USDC or USDT on the side, if it moves a little lower again. Dollar cost average in for the months of November and December and you will likely get rewarded.
I am not here to give you price targets for all kinds of Altcoins, but be happy if you move towards a double in prices or even 50% rise. Take some off the table and let the rest rise. You will feel a lot better taking some percentage off the table (profit, or your money back). It will give you some serenity and happiness and it will be easier to deal with Altcoins if they move downwards again. You know that at least you had your money back and not losing anything. If it moves further up then great, you can sell some again for profit.
By the way to make things clear (I forgot to mention this, so it is at the end of this post), a dominance chart shows dominance, not price movements that will happen for sure ! To give you examples : Bitcoin can rise in dominance compared to the Altcoins, while moving down in prices (dollar value). This would mean that Altcoins are moving down more heavily than BTC. Another example would be Bitcoin rising hard and Altcoins rising more slowly, compared to the dollar and this would mean BTC rising in dominance compared to the rest of the Altcoins. If Altcoins move up stronger than Bitcoin, you will see BTC dominance decline. I have seen quite some people being confused about this, so I wanted to write this, in case someone is confused.
I am not a financial adviser and this is not financial advice. Please do your own research and make your own decisions.