Yes, I know, everything that goes down must come up again and there is a big chance we will see a relief rally towards 37K before we´ll see the drop to 21K. And I wouldn´t mind.
I have been trying to hold off on buying Altcoins, but some days I am just a week baby and the "what if this is the bottom" gets the best of me.
Now I need to get rid of those ALTS asap because of what is happening.
Now if you read yesterday´s forecast you know that the big boys and the little baby expect a further dump, and I promised to tell you a second reason why I was holding off on ALTs, this is reason number 2:
This story is almost always the same, in a bear market BTC dominance increases. It just reached its highest point in the last 7 months.
When the market goes down, BTC dominance increases. This means that the little money that flows, flows into Bitcoin. This causes the ALTs to bleed even harder, basically.
Of course, this will change at some point, the only constant in life and the crypto market is change. But that might take a while just look at this:
Last year BTC dominance was high when the price was low, and anytime the price would go up dominance went down and money flowed into ALTs.
It´s almost like we have been in an almost constant ALT season if you compare last year's dominance to let's say the last 5 years.
Now based on my expectations we are around the same point in the cycle as we were 4 years ago. So that would be around May-July 2018, and look what a climb the BTC dominance made back then.
I don´t expect to see an exact copy due to having a lot more serious ALTs this time, and a wider range of investors. I do expect to see a similar trend though.
Okay quick recap, if BTC dominance goes up, ALTs bleed. If BTC dominance is high and the price of Bitcoin goes down, ALTs go down even faster.
For the sake of this story, let's pretend I am right this time and we are at the around May/July 2018 point in the cycle. Hence past the top and heading for the bottom.
Now keep in mind that bitcoin dominance climbed to 55 during that trip to the bottom time in 2018.
If that plays out the BTC dominance will be above 50 by the time we hit the real bottom, which I expect to happen between July and November 2022 (hence a bit earlier than in 2018). And with an even higher BTC dominance than we have today ALTS will get smashed and I will start buying.
The only question I have is: what is the impact of ETH and its merge on this whole story?
ETH is still considered an ALT but has proven to be a real runner up to BTC. So will ETH get hammered as bad as the rest, or will it start comparing more to its Big Brother BTC?
All in all, don´t think that ALTs look tasty already, you might not have seen ALT prizes this low but the best is yet to come.
Have a lovely day, remember that hitting the like button is one of the few free things in life, and hope to see you tomorrow.
Previous Forecast:
𝐂𝐫𝐲𝐩𝐭𝐨 𝐖𝐞𝐚𝐭𝐡𝐞𝐫 𝐅𝐨𝐫𝐞𝐜𝐚𝐬𝐭 #7 - If BTC slides another 20% ALTs might slide 70%
The Crypto Weather Forecast is my daily take on the crypto market, sometimes serious, sometimes sarcastic, often with a wink, and Always Honest.
