If Bitcoin Leads The Market, That's Bullish (BTC.D)
Updated
Many people already forget that Bitcoin spent weeks going up while Bitcoin dominance marched towards 73% in December. Bitcoin dominance tends to decline when Bitcoin itself has lost steam, not when it's trending hard. An exception might be the recent market bounce. This is of some concern, because when alts increase in value at this rate it's often unsustainable. Just look at SOL, QNT, and other coins that have reached new all-time highs during this bounce.
As mentioned in my recent posts, I think sentiment has been running a little too hot in the altcoin market. TOTAL2 made a new all-time high monthly close. Comparatively, sentiment in the Bitcoin market has been quite subdued. This tells me that either 1) The market has already topped, or 2) Some alts will need to correct very hard on their ratios before their next leg up, while Bitcoin catches up on the monthly. I also believe the next big leg up is likely to be the last of this bull cycle. Perhaps we could see a more sustainable run for cryptocurrencies in the long term, but sentiment and the assignment of value within the space still seems very immature to me. Blockchains that are barely operational receive unnecessarily high valuations, simply because of hype and speculation. I suppose this will always happen in crypto to an extent....but we're also seeing some of this with meme stocks in traditional markets. There's irrational and greedy behavior everywhere. We're living in a surreal time. I believe cryptocurrencies will need to transcend speculative valuation in order to be operational as a decentralized financial system.
Anyway, for the market to make another leg up, I think Bitcoin will need to lead for a time, draining some of the sentiment in the altcoin market. I do think Dominance can eventually see a new low near the cycle peak, as outlined in my chart. In this case, we can see Dominance head back up to the high 40% or low 50% area, if only briefly. Ideally, this occurs as Bitcoin breaks ATH. This can still occur even with Bitcoin dropping back to the lows, so it's important to manage risk and expectations.
This area for Bitcoin is extremely choppy. Price is currently supported (barely) by the 50 day MA (red), and it is trying to manifest a golden cross, which occurs when the 50 crosses over the 200 day MA (teal). Just as with the death cross, the golden cross doesn't necessarily predict price action, but it is interesting nonetheless. It tells us that despite the death cross in June, price has bounced and stabilized enough for the cross to reverse.
TL/DR: I WANT to see Bitcoin lead. If Bitcoin continues sideways while alts continue to skyrocket, this will seem like a repeat of the distribution back in April/May. I'd rather see something like the period from August - > December 2017 (circled in yellow on the left).
This is not financial advice. This is meant for speculation and entertainment only.
-Victor Cobra
As mentioned in my recent posts, I think sentiment has been running a little too hot in the altcoin market. TOTAL2 made a new all-time high monthly close. Comparatively, sentiment in the Bitcoin market has been quite subdued. This tells me that either 1) The market has already topped, or 2) Some alts will need to correct very hard on their ratios before their next leg up, while Bitcoin catches up on the monthly. I also believe the next big leg up is likely to be the last of this bull cycle. Perhaps we could see a more sustainable run for cryptocurrencies in the long term, but sentiment and the assignment of value within the space still seems very immature to me. Blockchains that are barely operational receive unnecessarily high valuations, simply because of hype and speculation. I suppose this will always happen in crypto to an extent....but we're also seeing some of this with meme stocks in traditional markets. There's irrational and greedy behavior everywhere. We're living in a surreal time. I believe cryptocurrencies will need to transcend speculative valuation in order to be operational as a decentralized financial system.
Anyway, for the market to make another leg up, I think Bitcoin will need to lead for a time, draining some of the sentiment in the altcoin market. I do think Dominance can eventually see a new low near the cycle peak, as outlined in my chart. In this case, we can see Dominance head back up to the high 40% or low 50% area, if only briefly. Ideally, this occurs as Bitcoin breaks ATH. This can still occur even with Bitcoin dropping back to the lows, so it's important to manage risk and expectations.
This area for Bitcoin is extremely choppy. Price is currently supported (barely) by the 50 day MA (red), and it is trying to manifest a golden cross, which occurs when the 50 crosses over the 200 day MA (teal). Just as with the death cross, the golden cross doesn't necessarily predict price action, but it is interesting nonetheless. It tells us that despite the death cross in June, price has bounced and stabilized enough for the cross to reverse.
TL/DR: I WANT to see Bitcoin lead. If Bitcoin continues sideways while alts continue to skyrocket, this will seem like a repeat of the distribution back in April/May. I'd rather see something like the period from August - > December 2017 (circled in yellow on the left).
This is not financial advice. This is meant for speculation and entertainment only.
-Victor Cobra
Note
Well, unfortunately dominance is increasing with Bitcoin DROPPING, which is always a possibility. Bitcoin is nearing a crucial level. This is in line with corrective scenarios I was looking at back in August (you'll be able to see this in my recent podcast appearance - I'll link this when it's up!). Much lower, and things will start to look more long term bearish for Bitcoin and the crypto space. There is the possibility of a panic low (anywhere from 35k down to 24k), but I would prefer to see candle closes above the light blue trendline, and above the long term uptrend (purple). Note
If we don't see a quick recovery, another death cross might be painted in the coming days as well. I'm looking for the 100 day MA (yellow) to generally hold as strong support. If people begin to sell below there, that will also be a concern. 
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