Usually in crypto we get stucked in 'price' & 'sats' terms when we measure the value of our holdings.
Nonetheless, I think it's very important to always take in consideration the MACRO side of the market (regarding % dominance) to get a rough idea of 'when it's the best time to rotate between alts-btc.
Let me show you this beauty:
Ok, before you start shouting at me 'I don't understand anything', take a sec and a deep breath to catch this amazing piece of information.
This chart represents the overall 'weight' of Bitcoin related to ALL the other coins.
It's represented with a plain '%'. That means that according to the chart (& today), 66,31% of the overall market cap (of the entire crypto market) it's sitting in bitcoin.
That also means that all the rest (~33,7%) sits in the 'altcoin market'. Including Ethereum*.
*Ethereum represents a bit less of a ~10% of the overall crypto market. Which lets us with a ~23% for ALL the other coins.
According to cmc:
If you never did it before, hope this helped to grasp a bit of the 'magnitude' of bitcoin. Which again it's something very relative, as the crypto market it's still a drop in the ocean when we look at Wall Street or any 'legacy market'.
Again, let's go back to the first chart. (I wanted to make a bit of a TA with that one damn!):
And this is exactly what I'm thinking. Note that the bearish candles not necessarily represent a fall in BTC price, it only represents a fall in dominance regarding the other coins, which means that if BTC dominance falls sharply some money is flowing from bitcoin into alts.
With this learned, observe how BTC performed in 2017, giving away a good chunk of market share to other participants. How the bear period of 2018 happened, how BTC 'reabsorved' again a lot of %, foing from a low of ~35% to the last top of ~70% (Almost 100% increase).
Now the interesting things start to happen and I formulate the following questions:
-Will bitcoin keep recovering % dominance? (Do you see it again breaking their ATH in % terms?)
-Do you see feasible to top again in the ~70% area (reason:halving), before start giving away % to other market participants?
-If we have another bull run, where do you think we'll have the next generational bottom (in % terms?).
Definitevely food for thought. Tell me below, I'm giving upvotes to the best answers :)
Thanks for reading btw
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I think that after the halving it will get to the 70% dominance range and will probably stay there for months but, at some point % will flow to alts. It's just cycles and I have the obsession with the next bull market replicating the previous one, probably because I haven't really took advantage of it. Now I'm ready...
Not sure if the next will replicate the previous... but the dominance reducing to the 30-40% it's (almost) a sure bet IMO
Hi! Nice post.
I see likely throughout this month that btc dominance will rise to 70%. But I dare say it will fall back to 60% during the summer months.
However, I am a bit Noob.
Growing up to 70% it's a very possible scenario, but I think that when the time to flow into alts will be fast & violent paced.
We'll have like 1-2 months of crazy gains before seeing another reaccumulation from the BTC side.
Thanks for your answer! I always enjoy to see you posting and commenting 😉
posh