The last BTC bull run (July 2017 - December 2017)
While other coins did do well during this period, we all saw the influx of new capital into the crypto market. CEXIO:BTCUSD ran up nearly 5x during this time and FOMO overtook novice investors looking to get in on the gains. I'd argue that much of the new money knew very little about the crypto space, and even fewer actually understood the technology behind CEXIO:BTCUSD and altcoins.
BTC flattens out (December 2017 - mid-January 2018
The slight recovery for 20k down to 17k was much needed and did not signal the beginning of the pullback that we saw starting a month ago. In that time, I made a killing in mid-cap and small-cap coins that were underpriced compared to CEXIO:BTCUSD . The behavior that we saw here was not the new novice investors, but largely smart money moving in to capitalize on altcoins. During this time, we still saw new money pouring into the crypto space. With CEXIO:BTCUSD holding relatively stable, it seemed that the inflow of money into CEXIO:BTCUSD balanced the flow of money from CEXIO:BTCUSD to altcoins. At this point, we saw whales and smart money take profits and begin the .
BTC crashes (mid-January 2018 - early February)
Weak hands, weak hands, weak hands. This correction was absolutely needed, as the growth that we saw in CEXIO:BTCUSD with the influx of new money was not sustainable. Talk to any novice that got in at 15k+, and they'd tell you that the price of CEXIO:BTCUSD was cheap compared to its 50k/100k targets that they saw. These targets were not realistic in the short-term, but may be in the long-term. And as they saw their investment value fall and retrace up to 70%, they decided to cut their losses and pull out. For the new investor, losing that much money that quickly is a difficult thing to deal with. But if you buy into an overpriced market, what else do you expect?
BTC is oversold and now recovering (early February - today)
With the frenzied selling over, we saw smart money transfer that took profits early buy back in after the crash. However, the difference that we see here is that there isn't new money, or at least not as much, pouring into the market. Where does this money come from? ALTS! We're seeing nearly every altcoin lose ground to CEXIO:BTCUSD as investors try and ride the recovery up.
... To be continued in the next comment ...
"Number one rule of Wall Street. Nobody... and I don't care if you're Warren Buffet or if you're Jimmy Buffet. Nobody knows if a stock is gonna go up, down, sideways or in fucking circles. Least of all, stockbrokers, right?"
- Mark Hanna (Matthew McConaughey, The Wolf of Wall Street)
If you think this part is incorrect, call it out in the comments. The trend that I see is that an upward CEXIO:BTCUSD market with no new money coming in must mean that altcoins lose ground. That's the only place that capital can come from! Until we see either (1) CEXIO:BTCUSD level off or (2) see a new frenzy of new money coming into the market, we will continue to see altcoins bleed.
How to profit?
My strategy is to pull my investment from every coin that I don't think is already undervalued. Until I see a trend reversal on coins, I'll hold in CEXIO:BTCUSD . If we see CEXIO:BTCUSD go down with altcoins going down, I'll pull into fiat. When we see CEXIO:BTCUSD level off and altcoins begin to flatten and eventually move upwards, I'm going to put money into strong coins. This is a cycle, and I don't see CEXIO:BTCUSD as overvalued ... yet.
Short-term BTC analysis
In order for CEXIO:BTCUSD to maintain its upward channel, we need to break through 12k with strong RSI and volume. Expect a challenge here and stay focused on signs for reversal. For now, the price is below the long-term MA and it looks like we're going to break through. Stay tuned for updates as I watch this market closely.
I'd like to hear your thoughts on BTC vs. altcoins! Please comment below, as the more input we see, the more informed we are!
*** This is not a recommendation to buy or sell, this is for educational purposes only! ***