21.10.2020 - Bitcoin dominance (BTC)Hi Traders!
Why does Bitcoin grow and other altcoins not? Why don't small altcoins grow against Bitcoin despite the growth of Bitcoin? Find out more in today's analysis.
Today we analyze the dominance of Bitcoin, which is absolutely key for traders. What is it actually telling us? Currently, Bitcoin dominance is at 61.71%, which means that up to 61.71% of all money in cryptocurrencies is in Bitcoin. The rest is allocated in other cryptocurrencies. It is, therefore, logical that if the dominance increases from the current 61% to 70%, for example, then the money is transferred from altcoins to Bitcoin (another option would be the influx of new money into alts, which is not currently happening). Conversely, if dominance declines, money is shifting more from Bitcoin to altcoins.
Let's look at the chart. As we can see in the summer the dominance decreased. If we mention the summer months, this is exactly what caused the huge pumps and growth in the DeFi sector, for example. Likewise, as the market grew, so did altcoins. In recent weeks, the situation has been the opposite. Bitcoin increases and altcoins stagnate or decrease. However, technical analysis can also be applied to this chart, and this graph is the absolute key to trading altcoins. There is a need to "catch" cycles when dominance decreases, as this is the period when altcoins are stronger and grow.
Currently, we have reached a very strong resistance, on which the trendline of the channel, MA21, and point resistance is at the level of 62.87%. RSI still holds the trendline. So we expect a minor rejection soon. After a few weeks of hard trading, better times could come.
May the crypto be with you!
