August 4, 2018       Bitcoin Dominance Trend Reversal

August 4, 2018 Bitcoin Dominance Trend Reversal

 

In light of today’s selloff in the cryptocurrency markets, I wanted to share what is actually.

Many traders and investors were used to the theory of buying anything, that worked last year, but not.

Then the trend moved to, if Bitcoin is up, sell Bitcoin and buy another major, it will outperform IE, Litecoin, Ethereum, Doge, Bitcoin Cash.  That worked the first six months of the year, but not very well in the past couple of months.

Yet many are stubborn and this can be seen by the market movements, as I have mentioned over the past month.  Once Bitcoin Market Share breached new highs for the year, then the proverbial herd who were seemingly the last one’s at the party, decided to pile on to the buy Bitcoin sell anything else.  Well as with top’s and bottom’s when the boat is too full, people have to jump overboard.

In today’s selloff, I look at it as a capitulation of many traders and small leveraged players being the last to be long Bitcoin and short the other majors.

What we just saw will mark a major top in Bitcoin Dominance as well as a trend reversal where as  on rallies bitcoin will underperform and initially on selloffs Bitcoin will underperform.

In my opinion, BTC Dominance should head back to the 44 handle in rather short order.

Here are Charts from Cryptopia, as I know many of the readers are familiar with that exchange, for some of the major pairings of interest to me.

BTC-ETH

BTC-LTC

BTC-DOGE

Take a step back and see how far the Bitcoin  “Dominance” has come over the past One to Six months and it may help give some perspective on why seeing Bitcoin Down is actually Bullish for the overall market.  Many may argue, and that is there opinion, but just as I pointed out some key support levels a month ago, my belief is looking at these three pairings will help guage market conditions in amore complete manner rather than only looking at Bitoin’s US Dollar Price.

 

 

eth-btc   6 mo.

 

 

eth-btc  1 mo.

 

 

ltc-btc  6 mo.

 

 

ltc-btc  1 mo.

 

 

doge – btc     6 mo.

 

doge – btc     1 mo.

 

 

I have mentioned how LOG moves and LOG charts for longer term positions in high volatility assets have helped me during my career.  Often times many will disagree, and thats fine, but in the cryptocurrency markets, the LOG targets for longer term price movement have been exceptional.

Look at the ETH-BTC six month chart.  High was near .1 btc, low was right near .05 btc.

DOGE-BTC, highs were in the 80 handle, low was just under 40.

 

LTC-BTC seems like it way have overshot a bit, but the LTC-BTC spread is down 58% in six months, with highs being just under .025 and lows near .01.

 

I covered some basics of LOG moves in some of my prior market updates.

Without reading a massive dissertation on the math of LOG moves, the short way I was taught.

Rally Target = Double the Current Price

Selloff Target = Divide current price by two

 

 

 

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