Bitcoin (BTC) is up 88% from the bottom price of $15600.
Many people are confused about finding the best entry points and the best strategy to maximize gains. This bear market drags down the portfolio of many traders by more than 80% to 90%. In this article, I will share the price analysis of Bitcoin (BTC), Bitcoin’s Correlation with BTC’s Dominance, and BTC’s Dominance Correlation with Altcoins.
As an example, I will share the strategy and analysis of Ethereum (ETH) and Cardano (ADA).
This will help in developing a great Altcoin strategy, the idea about the altcoin market. This will also help in making an entry and exit strategy.
Bitcoin (BTC) Price Analysis
Bitcoin marks the highest value of 2023, Bitcoin the largest crypto by market cap tested $28700 yesterday before entering into the correction zone. We shared this correction alert on our website cryptonewsbytes.com in an article published earlier this week.
Earlier this week we noticed that there is a bearish divergence at Relative Strength Index (RSI) in the 4-Hour time frame. This divergence played out when BTC was marking a higher high and RSI was marking a lower high in the 4-hour time frame.
This initiated a correction in the prices. Along this, on a lower time frame, BTC is forming a rising wedge pattern. Currently, the price is within the wedge and hovering around $27200. The rising wedge is a bearish pattern that mostly breaks the downside.
If it breaks the downside the first strong support is at $23946 and the second support is at $22000. However, if it breaks upside the next resistance is at $31800.
Bitcoin’s Dominance and its correlation with Altcoins
Bitcoin’s dominance is the share of the bitcoin market valuation in the total crypto market capitalization. When bitcoin dominance starts increasing this means the market share of bitcoin is increasing.
This is the normal function of the market when bitcoin price increase after hitting the bottom BTC’s dominance starts increasing and causes a blood bath in the altcoin in the BTC pair.
In this type of scenario altcoins price increases in the dollar pair and decreases against BTC, Because Bitcoin’s price is increasing not altcoin’s prices. I am sharing a chart, for a better understanding of BTC and its correlation with BTC’s price.
ETH/BTC Price Analysis
In the bear market, Ethereum (ETH) in the BTC pair came 89% down while BTC dominance was rising. In the last bear cycle, BTC’s dominance tested the bottom near 35% in January 2018, and at that time ETH price in the BTC pair was 0.12 BTC.
When Bear ETH lost 89% of its value against BTC and ETH price it left only 0.017 BTC in sep-2019. It is a good idea to hold BTC at the start of the Bull run until BTC dominance is rising.
Similarly, this time BTC is getting strong and including ETH all altcoin are losing their value against BTC except a few. Then why enter into Altcoin so early? It’s better to enjoy profit while holding the same number of BTC in the wallet instead of losing satoshi.
ETH in the BTC pair just started bleeding on the higher time frame, Currently, it’s hovering around 0.064 BTC, losing nearly 29% of its value in the past two months.
If ETH against BTC loses 66% of its value while BTC dominance is increasing, ETH in the BTC pair can come as low as 0.029 in the next 6 months.
ADA/BTC Price Analysis
Currently, BTC’s dominance is hovering at around 47.11% and after testing the bottom at around 38%. According to the previous data, In the coming bull run, the BTC’s dominance can go up to 75% in the next 6-8 months.
At the time of writing ADA/BTC price is at 0.00001327, ADA in the BTC pair is down 80% from its last bull run’s ATH. And in it come as low as 0.00000438 in the next 6 months when BTC’s dominance will reach its max level of 75%.
AS ADA on the higher time frame is losing its value against BTC, it will be a better idea to hold BTC instead of ADA at least while BTC’s dominance is rising.
Conclusion
As long as BTC’s dominance is rising Bitcoin will outperform the rest of the crypto market. Because of the largest market cap, it is safe to say that Bitcoin is the safest currency in the crypto market. Holding BTC while BTC’s dominance is rising will give more returns than other coins.
When BTC’s Dominance reaches its highest level of the running cycle, I mean at least above 65%, then this will be better to convert BTC into other altcoins to make maximum profit out of the coming Bull Run.
*Disclaimer: All views expressed in this article is for educational purposes only and should not be constituted as financial advice.
Image from: Tradingview and Featured Pic : Link to TV analysis