There’s a dark cloud hanging above the altcoin market, where nobody seems to be talking about. It’s the BTC dominance. Those who don’t take this into account will get rekt. A thread:
1/ What is BTC dominance? BTC dominance is calculated by dividing the market cap of Bitcoin by the market cap of the total crypto market. BTC dominance = Marketcap BTC / Total market cap * 100%.
2/ Historically, BTC dominance peaks during a bear market and bottoms during a bull market. When BTC dominance increases, money flows from alts to BTC. In other words, people sell their alts to buy Bitcoin
3/ Since January 2023 we are in a bear market, but after a temporary increase in June, the BTC dominance is still at around 40%, which is at ATL territory. This means that there is still much room for alts to decrease in value.
4/ Looking at the history of the crypto market it could very well be that BTC dominance will increase to 60%, maybe even 70%. This would be disastrous for alts with decreases of /10 not out of the question.
5/ So keep this in mind when you DCA into alts at current levels, thinking you are buying the bottom. We may not even be close.This post is based on this twitter thread.