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1/ ALTCOINS: Is it time for ALT SEASON?
It's time to update my long-term outlook on altcoins.
A thread:
It's time to update my long-term outlook on altcoins.
A thread:
2/ I use ETH/BTC to assess the alt market (it drives DeFi and alts)
My definition of a bull market is a consecutive HL and HH (John Murphy's "TA bible")
ETH printed a HH in Feb then corrected in the corona crash
ETH/BTC printed a 2nd HL in Spring 2020.
Bull market confirmed.
My definition of a bull market is a consecutive HL and HH (John Murphy's "TA bible")
ETH printed a HH in Feb then corrected in the corona crash
ETH/BTC printed a 2nd HL in Spring 2020.
Bull market confirmed.
3/ Now we are at a crucial juncture. ETH/BTC needs to 0.026 as a 3rd higher low to keep the trend going.
The good news: We still have bullish market structure.
The bad news: If we lose 0.026 on a 1W candle close, we are in no man's land.
The good news: We still have bullish market structure.
The bad news: If we lose 0.026 on a 1W candle close, we are in no man's land.
4/ But this is ok! There is strong support here and good reason to believe we will bounce
0.026 was strong resistance before a breakout and should hold as support (see chart on left)
Also, we were due for a correction (see humble brag September tweet on right) $ETH
0.026 was strong resistance before a breakout and should hold as support (see chart on left)
Also, we were due for a correction (see humble brag September tweet on right) $ETH
5/ Let's simplify. A smart trader trades the trend until proven wrong
1. We are currently in an altcoin bull trend, proven by HLs and HHs
2. We just completed a bearish correction in the midst of that bull market
3. The bull market is invalidated with a lower low
1. We are currently in an altcoin bull trend, proven by HLs and HHs
2. We just completed a bearish correction in the midst of that bull market
3. The bull market is invalidated with a lower low
6/ Ethereum vs. BTC is a great gauge for altcoins, but we can strengthen our case with more evidence.
BTC Dominance = BTC's share of the total cryptocurrency market cap
BTC.D bear market = Altcoins gaining strength
BTC.D remains in a bear market until a long term HH forms
BTC Dominance = BTC's share of the total cryptocurrency market cap
BTC.D bear market = Altcoins gaining strength
BTC.D remains in a bear market until a long term HH forms
Perhaps the most overheated major altcoin of the Summer DeFi pump (mini alt season) was LINK
LINK/BTC is also completing a healthy correction. After a breakout, it went parabolic
It is just now returning to the breakout region. Again, previous resistance becomes support $LINK
LINK/BTC is also completing a healthy correction. After a breakout, it went parabolic
It is just now returning to the breakout region. Again, previous resistance becomes support $LINK
7/ Let's add DEFIPERP to assess alts (FTX's index of DeFi alts vs USD)
In 2020, the market is smarter than 2017. Inactive dinosaur projects don't pump
New coins with promising use cases and attractive narratives do. That's DeFi
Again: bullish market structure. Breakout pending
In 2020, the market is smarter than 2017. Inactive dinosaur projects don't pump
New coins with promising use cases and attractive narratives do. That's DeFi
Again: bullish market structure. Breakout pending
8/ This is compelling, but let's add historical context
Feb 2017:
-BTC broke ATH and rallied past
-Corrected 33%
-Pumped 150% to 2.5X previous ATH
Today's equivalent: Dump to $16.5k, pump to ~$50k
During this, alts PUMPED. Dominance fell 30% in 3 months
Will history repeat?
Feb 2017:
-BTC broke ATH and rallied past
-Corrected 33%
-Pumped 150% to 2.5X previous ATH
Today's equivalent: Dump to $16.5k, pump to ~$50k
During this, alts PUMPED. Dominance fell 30% in 3 months
Will history repeat?
9/ Many fundamental factors support this case
M1 is increasing at historically high rates. Nobody wants cash. The new fiat must go somewhere
BTC broke ATH and is getting tons of media coverage
--> New entrants deploy capital to "cheaper" alts bc they feel they missed out on BTC
M1 is increasing at historically high rates. Nobody wants cash. The new fiat must go somewhere
BTC broke ATH and is getting tons of media coverage
--> New entrants deploy capital to "cheaper" alts bc they feel they missed out on BTC
10/ Let's remember the name of the game. Altcoins move in boom or bust cycles
How/why this happens is a huge debate, but imo:
1. Whales buy the bottom on ALT/BTC pairs
2. They sell the top to retail
3. They end up with more BTC - the soundest money in 2020
How/why this happens is a huge debate, but imo:
1. Whales buy the bottom on ALT/BTC pairs
2. They sell the top to retail
3. They end up with more BTC - the soundest money in 2020
11/ Trade like smart money. Plan to sell most of your alts to lock in gains
Alt seasons usually last 1-3 months. Each cycle brings new alts. They all trend down vs. BTC in the long term
Follow me and I'll update my assessment of the trend in alts as best I can
A quick caveat..
Alt seasons usually last 1-3 months. Each cycle brings new alts. They all trend down vs. BTC in the long term
Follow me and I'll update my assessment of the trend in alts as best I can
A quick caveat..
12/ I could be wrong. Alts could continue to bleed, and BTC could continue to gain dominance.
For this reason, I always keep at MINIMUM 30% BTC
If ETH/BTC enters "no man's land" or "bear market territory", I'll look to allocate closer to 100% BTC
For this reason, I always keep at MINIMUM 30% BTC
If ETH/BTC enters "no man's land" or "bear market territory", I'll look to allocate closer to 100% BTC
13/ If you want to make money this alt season:
1. Know your plan. Stick to it
2. Don't be greedy. Resist leverage. Trading spot altcoins will get you 5-10x gains (or much greater)
3. Don't short. Take some profit during euphoria and buy dips instead
1. Know your plan. Stick to it
2. Don't be greedy. Resist leverage. Trading spot altcoins will get you 5-10x gains (or much greater)
3. Don't short. Take some profit during euphoria and buy dips instead
14/ Hopefully you got some knowledge from this thread and feel better about analyzing alts
We are STILL early. There remain MANY skeptics of BTC and crypto. Read replies to any mainstream tweet about BTC
We will be rewarded. Excited to make money with you all!
We are STILL early. There remain MANY skeptics of BTC and crypto. Read replies to any mainstream tweet about BTC
We will be rewarded. Excited to make money with you all!
If you want a place to trade alts with LOW leverage.
Register with my link on Phemex and get yourself a deposit bonus. They are offering UNI, YFI, and other new DeFi coins.
It will also make me money, which would be pretty cool. https://phemex.com/register?group=231&referralCode=BAAIL
Register with my link on Phemex and get yourself a deposit bonus. They are offering UNI, YFI, and other new DeFi coins.
It will also make me money, which would be pretty cool. https://phemex.com/register?group=231&referralCode=BAAIL
