#AltcoinSeason or False Alarm?
Here's a thread with everything you need to know.
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First, we'll take a look at the #Bitcoin Dominance chart.
The #BTC.D is a metric that measures Bitcoin's market share compared to other cryptocurrencies.
If BTC.D is high, it suggests that Bitcoin is dominating the market & investors may be focusing on it more than alts.
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Conversely if BTC.D is low, it suggests that other cryptocurrencies may be gaining more attention and market share.
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The Bitcoin dominance chart is unique in that it can act as both a leading and lagging indicator of an altseason, depending on the timeframe/method being used for analysis.
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As a leading indicator, changes in the BTC.D chart can be used to predict a potential altseason or capitulation.
Ex. As the BTC.D reaches a macro resistance/support level, a reversal pattern could unfold, increasing the likelihood of an impeding altseason/capitulation.
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As a lagging indicator, the BTC.D chart can be used to confirm/invalidate an altseason.
Ex. If #altcoins have already started to perform well, the Bitcoin Dominance chart may reflect this by trending downward, in a lag, as investors diversify away from Bitcoin.
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With that out of the way, how is the BTC.D chart looking like now?
The 1W chart illustrates a tower top taking form, a strong bearish reversal pattern.
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BTC.D is also at macro resistance, a level where it got rejected, consecutively, several times before.
So since the BTC.D is at macro resistance and a tower top is in formation, wouldn't that imply a high probability for an altseason?
Well, there's more...
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The #Ethereum vs Altcoins chart (total3) shows a major lag in performance by the altcoin market.
Regardless of #ETH's consecutive bullish structural breaks, the Alt Market remains stagnant, just as it's been for the past 3 months.
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To understand the significance of a lagging Alt Market, we would have to look at previous altcoin seasons/price action, and compare them with $ETH.
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The Alt Market has a tendency to follow Ethereum, even structurally so, and perform similar/better bullish structure breaks.
These breaks tend to be followed by significant markup phases.
Today however, the Alt Market lost its structural adjacency to Ethereum.
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What does this mean for altcoins?
In essence, this indicates a rather significant loss of trust in altcoins by market participants.
Investors are staying clear of altcoins.
This is uncharted territory for the Alt Market.
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As for the #altseason, the best case scenario would be a multi-week rally, a rather weak one too, into a selloff.
This is the best possible outcome I see unfolding.
That said, I'm completely out of altcoins and not looking to enter any time soon.
Risk>Reward
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Hopefully, this thread helped you gain a deeper insight into the current state of altcoins and what it means for the altcoin season.
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RT appreciated.
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