The cryptocurrencies market has been on a bear run for the past two weeks. After reaching a high of about $120 billion in mid June, the market cap of most cryptocurrencies have been reducing. This has taken a toll on their prices. Bitcoin prices have fallen from the highs of close to $3000 to about $2410 as I write this post. Ethereum price has come down from $420 to $250. Likewise, the price of most of the top 20 cryptocurrencies have reduced drastically.
So when does the market stop bleeding?
In my opinion, the bleed can be attributed to a combination of both a natural market correction and the uncertainty pertaining to the future of Bitcoin after August.
I expect Bitcoin prices to hit as low as $1500 around August. The price will consistently reduce over the next six weeks. During this time, the alts will reduce vis-a-vis bitcoin. What I noticed over the past two weeks is that BTC dominance has risen from 36% to 42%, meaning that despite the uncertainty over bitcoin's future, it is gaining market share as investors are cashing out their positions in alts to fiat/USDT.
When the crypto market bottoms out, I expect BTC dominance to grow to close to 50%. Also the BTC market cap will be 62.5% of its current market cap ($1500/$2400 = 62.5%).
Current BTC Market Cap ~ $40 billion
Expected BTC Market Cap in August ~ $25 billion
Expected BTC Dominance in August ~ 50%
Expected Cryptocurrency Market Cap in August ~ $25 billion * 2 ~ $50 billion
I am being a little conservative with my expectations here. It is widely expected that the BTC price would find strong support at $1800 and that its dominance will max out at around 45%, in which case the lowest market cap we'll see will be ~ $65 billion.
Recommendation: One could start buying into the alts when the market cap approaches the $65 billion mark. It would be a good entry point since the prices are at worst likely to dip a further 20%-25% from then. Also, it reduces the risk of missing out on the beginning of the next bull run which might happen before reaching $50 billion market cap.
P.S.: The contents of this article reflect entirely my viewpoints. They should not be taken as official trading advice. As always, when it comes to cryptocurrencies, DO YOUR OWN RESEARCH.