The market is about to have a Bitcoin moment. #18
Everyone is looking for the next 100x altcoin while forgetting the market king. Your eyes should be on the Bitcoin dominance chart.
Arguably, the most important chart in crypto right now is not a price chart. Rather, it is the Bitcoin market share or dominance which is now approaching 50%!
Why is this important?
It sets the tone for the whole crypto market. After more than two years of consolidation under 50%, Bitcoin’s dominance may experience a significant breakout which will have a dramatic impact on all market participants.
You don’t want to be caught off guard. I suggest your keep reading and watch my technical analysis video below.
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As you can see from the below chart, the BTC dominance has been moving sideways between 40% and 50% since May 2021! With the current dominance at 49%, Bitcoin is inching closer and closer to a possible breakout.
If that happens, then the path will open for BTC to suck all the money from the market and pump towards a 60% market dominance. This means less money for altcoins or it may even come at their expense as money shifts back to BTC.
Why would that happen?
Big money wants to hold winners, not losers. And a break above 50% dominance would signal that holding Bitcoin is the winning hand for the remainder of this year. My video gives you additional insight (see minute 6).
If you are not familiar with the money flow cycles in crypto, then check the below infographic. With meme coins like PEPE taking the spotlight most recently (a $100 buy made you a millionaire), we may be at the bottom of this money flow cycle.
Price speculation is 95% of crypto right now. However, what is not speculation, is holding Bitcoin. While big money may require some convincing to buy low cap coins, Bitcoin needs no introduction. Hence, when the shift will happen, it will be fast and sudden.
How can you use this to your advantage?
Poor people buy lottery tickets, rich people buy stocks and smart people buy Bitcoin.
Meme coins are the best examples of gambling while crypto folks call it trading. But you want to be smart with your money, right? If you are in profit holding low cap coins, then take profit as soon as Bitcoin breaks 50% dominance if you didn’t do it already.
When I say take profit, I mean you sell your speculative coins you gambled with and you buy Bitcoin. This achieves two things:
You protect your wealth and profits (instead of gambling them on another meme coins and lose it all)
You get exposure to a possible Bitcoin rally
This allows you to further increase your wealth. But most of all, if you managed to buy at least 1 BTC with such profits, aim to never sell it. That is your retirement.
Try to control FOMO and hold your profits in Bitcoin. One of the worst mistakes is to overtrade when you are profitable, thus achieving the inevitable - you increase your risk of losing it all. What the market gives can also be easily taken back.
Nevertheless, not all altcoins are pure speculation, some have real use-cases. Such coins should be held until the next bull market FOMO starts. Your plan should be to slowly sell into the FOMO and accumulate Gold and BTC with the profits. Then hold profits for at least one year. You will buy the next bear market.
If you don’t have a plan to manage your portfolio in the coming bull market, then work on it now. Take advantage of this time before the FOMO takes over to organize your strategy. Rationality is quickly lost once emotions take over. That is when your plan can save you.
What if Bitcoin dominance falls?
If Bitcoin is rejected at the 50% resistance, then you cancel the above strategy and you maintain your exposure to altcoins. Whenever the Bitcoin dominance falls, we call that an altcoin season. This is basically the opposite strategy.
Money flows to altcoins instead of Bitcoin.
Nevertheless, based on the current data, the chance of Bitcoin breaking the resistance is the highest it has ever been in the past two years. Thus, a breakout is the most likely scenario right now.
All trades are a game of probability. Even if you are 99% sure on a trade, there is still that 1% chance you can be proven wrong. Hence, the market humbles everyone.
The winners plan for both scenarios. Be a winner.
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