Do not judge this idea by its title
Apt Title - Alts are behind BTC dominance by a wave
Waves nomenclature :
Primary wave - Violet colour waves in chart
Intermediate wave - Yellow colour waves in chart
Minor wave - White colour waves in chart
Some spoon feeding will be done in this post keeping in mind the traders who are new to trading like me and are willing to learn to stack up BTC. Experienced traders can right away jump into Technical Analysis section of this post.
Educational :
1) In markets, an asset’s price increases with respect to its base currency mostly when the base currency is stable or is sliding. When an Alt is being traded with BTC, Alt is the asset and BTC is the base currency. So the BTC has be stable for your Alt to gain value over BTC.
2) Elliot wave theory is one of the best methods for market analysis which when combined with trading strategies like Price action, Trend following, Swing trading, etc., gives the best results for traders. I suggest you to understand this theory before you proceed further in this post. If you do not know the basics of this theory, here is a link for a quick read - school.stockcharts.com/doku.php?id=market_analysis:introduction_to_elliott_wave_theory .
Technical Analysis :
In the above chart you can see that I drew the Elliot waves for BTC Dominance. Based on the current and historical price action of BTC(discussed later), I didn’t consider the slight touch between minor wave 1 and minor wave 4 of intermediate wave 5. Also the closing dominance values of these two minor waves on the daily chart didn’t touch. The primary wave 1 has been topped out at 70 and the dominance is due for correction. Support levels are drawn in the chart. Considering the Elliot wave theory guideline that the ABC correction of the primary wave 2 cannot bottom beyond the bottom of the intermediate wave 4 of the primary wave 1, we can say that the lowest value that the dominance can reach before reversal is 52. As of now we do not know whether this correction would be sharp or flat. But during this correction time, we will be seeing many ALT/BTC pairs like ETH, XRP, ADA, EOS, BAT, etc., which are consolidating at their historical supports to make their primary wave 1.
Now coming to BTC/USDT market, you can see in the below chart. BTC finished its primary wave 1 and is correcting now.
We do not know whether this primary wave 2 would be a sharp or a flat correction. But we can anticipate it to be a flat correction based on BTC’s historical price action. Take a look at below chart once.
In both the previous two Elliot primary wave cycles, primary wave 2 was flat, primary wave 3 was the extended one and the primary wave 1 didn't close above the then ATH. If you observe clearly, after the primary wave 2 has bottomed out we have a long and tight consolidation before a bigger move was made to the upside. If this fractal were to repeat this time as well, we will be seeing BTC’s price to quickly bottom out and then consolidate for a long period before moving towards 20000usd. What I am trying to say is that the BTC's primary wave 2 can be bottomed out in less than a month. But after bottoming out, the market may move sideways between 9000 usd and 11000 usd for longer time(like 3 months) before making a huge move upwards.
Here also from the Elliot wave theory guideline, that the ABC correction of the primary wave 2 cannot bottom beyond the bottom of the intermediate wave 4 of the primary wave 1, the lowest price that BTC could reach is 8000 USD.
Historically the primary wave 1 didn't close above the then ATH. If a similar market structure plays out this time, the BTC dominance decreases slowly when BTC moves to lower prices and then moves sideways when BTC undergoes tight consolidation. We cannot expect the dominance to increase when BTC corrects. This is why I am considering that the primary wave 1 of the BTC dominance has topped out at 70 and the overlap between minor waves 1 & 4 of intermediate wave 5 is not considered as an overlap. The Alts which are currently struggling for volume will print their primary wave 1 when BTC corrects and print primary wave 2 as the BTC consolidates.
Here we have to acknowledge that the BTC price consolidation after primary wave 2 bottom is a part of primary wave 3. As BTC dominance completes its primary wave 1, alts are about to start their primary wave 1. When BTC dominance completes its primary wave 2, alts will be starting their primary wave 2. So this goes on and the alts are always a primary wave behind BTC dominance. This can also be seen in the 2017 bull run where the BTC topped its primary wave 5 at 20000usd on 17th december, 2017, whereas the alts rallied even after that date and topped their primary wave 5 on 1st February, 2018(of ETH/BTC market).
Summary : Now is the time to catch the primary wave 1 of Alts.
P.S :- My trading journey started 3 months back. Been working hard to improve my TA. I am always ready for discussion. I am greedy to learn than to earn at this point of time. Warming up for the 2 year long bull market ahead of us.
Waves nomenclature :
Primary wave - Violet colour waves in chart
Intermediate wave - Yellow colour waves in chart
Minor wave - White colour waves in chart
Some spoon feeding will be done in this post keeping in mind the traders who are new to trading like me and are willing to learn to stack up BTC. Experienced traders can right away jump into Technical Analysis section of this post.
Educational :
1) In markets, an asset’s price increases with respect to its base currency mostly when the base currency is stable or is sliding. When an Alt is being traded with BTC, Alt is the asset and BTC is the base currency. So the BTC has be stable for your Alt to gain value over BTC.
2) Elliot wave theory is one of the best methods for market analysis which when combined with trading strategies like Price action, Trend following, Swing trading, etc., gives the best results for traders. I suggest you to understand this theory before you proceed further in this post. If you do not know the basics of this theory, here is a link for a quick read - school.stockcharts.com/doku.php?id=market_analysis:introduction_to_elliott_wave_theory .
Technical Analysis :
In the above chart you can see that I drew the Elliot waves for BTC Dominance. Based on the current and historical price action of BTC(discussed later), I didn’t consider the slight touch between minor wave 1 and minor wave 4 of intermediate wave 5. Also the closing dominance values of these two minor waves on the daily chart didn’t touch. The primary wave 1 has been topped out at 70 and the dominance is due for correction. Support levels are drawn in the chart. Considering the Elliot wave theory guideline that the ABC correction of the primary wave 2 cannot bottom beyond the bottom of the intermediate wave 4 of the primary wave 1, we can say that the lowest value that the dominance can reach before reversal is 52. As of now we do not know whether this correction would be sharp or flat. But during this correction time, we will be seeing many ALT/BTC pairs like ETH, XRP, ADA, EOS, BAT, etc., which are consolidating at their historical supports to make their primary wave 1.
Now coming to BTC/USDT market, you can see in the below chart. BTC finished its primary wave 1 and is correcting now.
We do not know whether this primary wave 2 would be a sharp or a flat correction. But we can anticipate it to be a flat correction based on BTC’s historical price action. Take a look at below chart once.
In both the previous two Elliot primary wave cycles, primary wave 2 was flat, primary wave 3 was the extended one and the primary wave 1 didn't close above the then ATH. If you observe clearly, after the primary wave 2 has bottomed out we have a long and tight consolidation before a bigger move was made to the upside. If this fractal were to repeat this time as well, we will be seeing BTC’s price to quickly bottom out and then consolidate for a long period before moving towards 20000usd. What I am trying to say is that the BTC's primary wave 2 can be bottomed out in less than a month. But after bottoming out, the market may move sideways between 9000 usd and 11000 usd for longer time(like 3 months) before making a huge move upwards.
Here also from the Elliot wave theory guideline, that the ABC correction of the primary wave 2 cannot bottom beyond the bottom of the intermediate wave 4 of the primary wave 1, the lowest price that BTC could reach is 8000 USD.
Historically the primary wave 1 didn't close above the then ATH. If a similar market structure plays out this time, the BTC dominance decreases slowly when BTC moves to lower prices and then moves sideways when BTC undergoes tight consolidation. We cannot expect the dominance to increase when BTC corrects. This is why I am considering that the primary wave 1 of the BTC dominance has topped out at 70 and the overlap between minor waves 1 & 4 of intermediate wave 5 is not considered as an overlap. The Alts which are currently struggling for volume will print their primary wave 1 when BTC corrects and print primary wave 2 as the BTC consolidates.
Here we have to acknowledge that the BTC price consolidation after primary wave 2 bottom is a part of primary wave 3. As BTC dominance completes its primary wave 1, alts are about to start their primary wave 1. When BTC dominance completes its primary wave 2, alts will be starting their primary wave 2. So this goes on and the alts are always a primary wave behind BTC dominance. This can also be seen in the 2017 bull run where the BTC topped its primary wave 5 at 20000usd on 17th december, 2017, whereas the alts rallied even after that date and topped their primary wave 5 on 1st February, 2018(of ETH/BTC market).
Summary : Now is the time to catch the primary wave 1 of Alts.
P.S :- My trading journey started 3 months back. Been working hard to improve my TA. I am always ready for discussion. I am greedy to learn than to earn at this point of time. Warming up for the 2 year long bull market ahead of us.
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