As promised in my last post, “ ” here’s the first in a series of articles about altcoins. Time to Buy Altcoins? By now, you’ve probably heard about the “bitcoin dominance” chart. That chart shows bitcoin’s percentage of the total cryptocurrency market capitalization. It looks like this: Most analysts use this to trade bitcoins against altcoins or identify trends that make it advantageous to buy or sell altcoins. When the line goes down, altcoins dominate. When the line goes up, bitcoin dominates. Sounds good but it won’t help you navigate the altcoin market. Why not? Because it includes stablecoins and Ethereum. Collectively, those assets have a total market cap almost as large as bitcoin’s and larger than all other remaining altcoins combined. In other words, the bitcoin dominance chart tells you more about bitcoin’s relationship to ETH, USDT, USDC, and BUSD than bitcoin’s relationship to altcoins. You hardly see the other 30,000 altcoins reflected in this chart. Know what you’re missing If you keep using this chart, you will miss key shifts in momentum. Are you sure you want to base your decisions on a chart that contains only a portion of the information you care about? Try this one instead. This chart strips out USDC, USDT, and ETH to better reflect the actual dynamics of altcoins vs. bitcoin. (I would filter out BUSD, too, if I could figure out how to do this. BUSD skews the data a bit, but not enough to substantively change what it’s saying.) When the line goes down, altcoins are losing to bitcoin. When the line goes up, altcoins are winning against bitcoin. Usually, I only show this chart with paid subscribers of my newsletter, . I made an exception for this article because it’s too important to ignore, just note that the specific version I present to subscribers has some extra features. Crypto is Easy See what you couldn’t see before While the bitcoin dominance chart shows bitcoin pacing the wider market since May 2021, my chart tells a completely different story. From May 2021 to May 2022, bitcoin crushed altcoins in an accelerating, parabolic, downward black arc — a long, powerful trend marked in black in the image above. Even as bitcoin’s price made all-time highs, altcoins lagged behind. Once bitcoin’s price started to fall, altcoins fell harder. What happened at the end of May? Altcoins broke the parabola. They shifted the trend. I mentioned this in . my weekly rundown for May 29, 2022 https://cryptoiseasy.substack.com/p/weekly-rundown-may-29-2022#details?embedable=true Since then, altcoin dominance has mostly kept pace with bitcoin within a range of four percentage points. Descriptive, not conclusive Why have altcoins paced bitcoin since May? Aren’t they supposed to bleed against bitcoin for the next two years? Isn’t that why my friends don’t want to let me buy altcoins? I don’t know. My best guesses? Altcoins have already suffered so much. You can see that in my chart. Most are already dead and probably not coming back. Of the ones that are still alive, they don’t have much more room to fall. Some offer staking rewards and other incentives for holding tokens, contributing to the community, and participating in the network. I published some of them in , including . my altcoin reports a new one in November Meanwhile, bitcoin has to deal with selling from miners, bankrupt lenders, recipients of the Mt. Gox settlement, and potentially worse depending on the fallout from FTX’s collapse and problems at Digital Currency Group. Does it matter? Crypto faces lots of headwinds in the short term. This chart looks only at relationships, not causes or expectations. The real deal To be fair, I used the traditional bitcoin dominance chart for a long time. Too long! As a result, I missed key shifts in patterns during 2021 and early 2022. Once I switched to my chart, the picture became very clear: Bitcoin demolished altcoins in a parabolic move from May 2021 to May 2022. In June 2022, momentum shifted to altcoins after breaking the 75% level, a historical inflection point. Altcoins already crashed against bitcoin. We don’t need to wait for this to happen (it already happened). What other relationships will this chart reveal? I’ll keep you posted in my newsletter. Crypto is Easy This post is available as an NFT on . Mirror https://mirror.xyz/0x9a6600c7B40801dda9A0Fa4E8DE7b1B99FE524a7/PbGnTKHB65oGa7LGboGifFdlrlXKRCE4Ddseg-cI9ek?embedable=true Mark Helfman publishes the newsletter. He is also the author of three books and a top bitcoin writer on and . Learn more about him in his and connect with him on . Crypto is Easy Medium Hacker Noon bio Superpeer

Is $14k Bitcoin the New $100k Bitcoin?

Time to Buy Altcoins?

Crypto is Easy Newsletter

Nominated for 2022 - HackerNoon Contributor of the Year - Cryptocurrency

Nominated for 2022 - HackerNoon Contributor of the Year - Investing

Nominated for 2022 - HackerNoon Contributor of the Year - Bitcoin

Nominated for 2022 - HackerNoon Contributor of the Year - Crypto Trading

Nominated for 2022 - HackerNoon Contributor of the Year - Money

Too Long; Didn't Read

The Altcoin Chart You Can’t Afford to Ignore

The Altcoin Chart You Can’t Afford to Ignore

About Author

Comments

TOPICS

THIS ARTICLE WAS FEATURED IN

Related Stories

2020 is The Year Wall Street Could Take Over Cryptocurrency

An On-Chain Analysis of Chainlink

Start Transacting This Memecoin Cryptocurrency Without The Headache [feat. BANANO]

Top 15 Small-Cap DeFi Projects to Keep Your Eye On in 2021

4 Reasons Trading In Bear Markets Does Not Work

89 Stories To Learn About Bitcoin Price

2020 is The Year Wall Street Could Take Over Cryptocurrency

An On-Chain Analysis of Chainlink

Start Transacting This Memecoin Cryptocurrency Without The Headache [feat. BANANO]

Top 15 Small-Cap DeFi Projects to Keep Your Eye On in 2021

4 Reasons Trading In Bear Markets Does Not Work

89 Stories To Learn About Bitcoin Price

Light-Mode

Classic

Newspaper

Minty

Dark-Mode

Neon Noir

Minty

HN StartUps