Bitcoin Forum

Great thread on twitter by Mr. Brendan Bernstein inspired Fundstrat data. I will share it here as I think it is very helpful analysis.

1/ Are “alts actually back”? The crypto market moves in well defined cycles, and we just completed the 3rd major one. Inspired by @fundstrat, below is the best metric I've seen to show it: the % of alts (top 5-100 by MCAP) increasing 200% over 90 days.

https://pbs.twimg.com/media/DbFYrkVWsAAqfST.jpg

2/ Howard Marks describes two ways to profit from markets: (1) buy more of what goes up and less of what goes down, and (2) cycle adjustment: building risk exposure when markets rise and reducing when they fall. Most people ignore the 2nd. Let’s dig in.
3/ Each cycle is more exaggerated than the previous. The first peaked at ~10%, the second >30%, and the last at ~70%. Absolutely crazy. 70% of alts went up 3x over 90 days. It was shooting fish in a barrel and way too overheated.

4/ Each time, the cycle peaks and sharply reverses back to near 0. The time on the way up and down is usually symmetrical. The most recent one just completed. A few questions: (1) What causes each cycle (2) are there predictive factors (3) What's next? Can we get a clue from BTC?

https://pbs.twimg.com/media/DbFY0jVWkAAt1QZ.jpg

5/ Hopefully this doesn’t cause PTSD- let's dig into the most recent cycle w. BTC added. BTC went from $6009 on 11/11 to $19500 on 12/16. The % altcoins increasing 200% went from 3% to 71% on 1/13. BTC then fell to $5900 from the peak of $19.5k, retracing the full move

https://pbs.twimg.com/media/DbFZOdvWsAE5lNR.jpg

6/ BTC peaked about 34 days, or 27% into the cycle. This is also 54% of the way to the alt top on 1/13.

https://pbs.twimg.com/media/DbFZZ67WsAUDe7s.jpg

7/ After the BTC peak, alts took off for the next month. About 1 mo after the BTC peak, their MCAP (shown in green) fell from $187bn on 1/16 to $46bn on 4/7. Meanwhile, the % of alts increasing 200% fell and flatlined at 0%. The cycle played out: BTC —> Alts —> Overall pullback.

https://pbs.twimg.com/media/DbFZq_8WsAUBClH.jpg

8/ What drives this? BTC runs the show as it’s the most liquid fiat on-ramp and most established asset. Before and during the start of each cycle, BTC price increases as more fiat comes into the space. As people are comfortable with BTC the new wealth trickles into riskier assets

9/ Going into each cycle, BTC dominance rises. As the 2nd cycle (04/17-09/17) progressed and turned into the next one, BTC rallied 240% more than an mcap weighted portfolio of the top 20 altcoins. After a large gain in BTC, you can see the peak as that money moved into alts

https://pbs.twimg.com/media/DbFaCg0WsAMtEiI.jpg

10/ Given most alt trading is against bitcoin and BTC is the best mechanism to bring fiat in, before alts can go on a major rally, it looks like *wealth first needs to be made* in BTC. If you look above, there is a lag between BTC and the alt cycle.First BTC gains, then alt gains

11/ Before last cycle, from 9/1 to BTC’s peak and the start of the massive altcoin gains, BTC dominance (shown in orange) rose from 45% to 65%.

https://pbs.twimg.com/media/DbFahoWWsAM547H.jpg

12/ As risk tolerance and “house money” grows, the technologically weaker assets rise the most. B/c alts are more illiquid, each fiat purchase compounds price more. Sentiment gets out of control. The flippening is on the horizon. Its unsustainable and the *whole market* corrects

13/ How should we position ourselves now? Lets look at the previous, 4/1/2017 cycle to figure out. 1st, some similarities. During the cycle, BTC rose from $767 on 1/12 to $2910 on 6/11-a 267% increase. And prior to the cycle getting started BTC ran up from $572 to $1241 or 117%

https://pbs.twimg.com/media/DbFbIZsWsAI9mUm.jpg

14/ Before the cycle, BTC outperformed alts and dominance rose. The gains rebalanced into riskier altcoins that rallied even harder after. The wealth generated in BTC sows the seeds for the next alt coin rally. This looks almost identical to our recent cycle.

https://pbs.twimg.com/media/DbFbWn6WkAA4zpV.jpg

15/ Are alts back? Let’s look at the 2nd cycle again. As the cycle trended back towards 0, alts bottomed and even increased in USD terms. We're in a similar place now. The fall in USD terms ended then and it may have here too. But I wouldnt go chanting alt season just yet

https://pbs.twimg.com/media/DbFbkD1WsAIsX1u.jpg

16/ Traders need to keep in mind oppty cost. I’d argue that the big gains in alts — the super cycles where many rally 200%, can and will only happen after a large cap rally. There are still gains to be made in altcoins right now, but oppty cost may be high vs large caps.

17/ Before each of the last 2 cycles, BTC and large caps rallied 2-3x more than alts. Despite the altcoin usd rise, you would have done better by holding the larger caps. Pictures once again below.

https://pbs.twimg.com/media/DbFelUkWsAI2bFO.jpg

https://pbs.twimg.com/media/DbFenVxWsAQHu-u.jpg

18/ Before the next cycle, I’d look for the dominance of large caps to rise like it has before previous cycles. Prices are largely driven by liquidity. For another major super cycle to form there needs to be more fiat that comes into the system. Question is where that goes first?

19/ What to watch? The larger institutions who bring in new capital likely will do so through the more established assets. BTC dominance is up about 5% from the end of the last cycle on 3/1 from 40% to 42%. As this # changes it could be a good indicator of the market composition

https://pbs.twimg.com/media/DbFccSeWkAAVofn.jpg

20/ 1 good indicator to watch is ETH / BTC. Last cycle, ETH / BTC fell >50% as BTC rallied to highs. But on 12/11, 5 days before the BTC peak, it bottomed right before alts started to rally the most. ETH / BTC may be a good leading indicator to track the next major super cycle

https://pbs.twimg.com/media/DbFc1hyWsAEVlzL.jpg

21/ Disclosure: Long BTC

 

Too much graphs and pics without any real conclusions.

You can't predict alts > Top 30 movement, because they can be easily manipulated. Even somebody with few BTC volume could push in one or another direction. Examples: FunFair, MonaCoin, Centrality and many more with few hundred K to 1-2-3 M daily volume.

I also think like you. Capital is being focused on altcoin. and it has increased by 20% in the past 2 days. I think altcoin is really back. Hopefully the market can go up slowly but it will be sustainable

If you havent invested yet,id recommend to wait another few weeks to minimize the risk.Btc might just bouncing due the crash and dragging alts up.Neee to see ,will market hold the support or not

You can not predict how will be look market in future. Nobody can do it because market can be manipulated by whales in any moment. So your work has been in vain

It was interesting to read, but still make predictions about the future price is useless.

Very interesting post with a lot of useful information.
Most of the alts dipped almost 90% during the last few months compared to their previous Aths. Most of them are slightly recovering now. We can't say that the alts season started, Anytime BTC can ruin the fun. Anyway im short term bullish on both alts and btc.

Thank you for these charts. Easy to see and easy to read. My decision is always simple. Make back what I invested, which I did in January, and then keep the rest for holding or for buying in more alts. As I said, January was that opportunity so I gained back all my bitcoins invested plus a little profit, and then played around with the rest of the alts. Now the market dipped and again I bought into long term holdings but also some risky alts, thankfully, not everything crashed and like with Verge I made back plus profits. Sort of like trying to ride this pattern, but maybe I am just lucky?

Answering on your thread by my thoughts it is able that market will recover and prices will be back in soon days or weeks so just you need to follow real market and don't speculate nowadays cause prices are so uncertain.

Reading the movement with the graphs and charts can be helpful sometimes but we can not always rely on the past movements, there are sometimes negative and positive outcome in what is happening all the time with the value of bitcoin and other Cryptocurrency, In my opinion it will sometimes work but not all the time we should rely on it, And have a mind set that in every investment you make there is a risk involve in it.

I think is sure alts actually back, if I see in your graphics share, alts grow with on unexpected

Very helpful but as far as I know alts ride the bitcoin wave which means when the bitcoin price rises so do altcoins rise ,unless an alt is weak on the market it wont ride this wave.

And I agree with Mr. Brendan Bernsteins analysis as the crypto market does follow through the trade cycle of Recovery, Boom, Recession, and depression which is a continous loop and this trend will forever happen so people need not to lose confidence in the market should a dip happen, FYI these are normal market behaviours which we need to go through to stimulate demand and supply.

I don't think making predictions is useless as this is used to draw an estimate of how long you could hodl before selling some for profits.

I do not know much about it, but in this week altcoin in the market is in a pretty good trend, obviously it is good news for everyone.

Whether or not altcoins actually back... Bla bla it is a big bubble, there is no production no real value... But you make lots of money even you can't believe in it.

For sure, making predictions is useless, but analysing the market is not.

I really liked this profound research, that by no means couldn't be called "a prediction".
Actually I never cared much about ETH/BTC chart, though now I see that indeed it can be a great indicator to watch, so I opened cryptowat.ch now and checked it - and yeah, it really makes sense.

I don't think that we're "fully back" yet.

We're seeing a temporary halt in the bear market with a pump. ETH, LTC, EOS, IOTA are all benefiting a lot from this pump. It is definitely a result of BTC's movements stabilizing at the $6600 level which led to a pump, and later a short squeeze.

As kolesozw said, there is way too many irrelevant graphs and no conclusions drawn.

I personally think that this may only be a temporary upward adjustment, that will be followed by a correction soon after. The real bull market's not here yet.

If I am going to observe the graphs in the past days, I can already include that the altcoins are already back in green. But for me, it can go back to red any time because it can be controlled easily by the whales.

So many graphs sir?!
Also why it kinda looks like pump and dump?
Anyway i don't think top 5 altcoins are still there next year. Maybe just bitcoin cash

Yes it's already back but I just don't recover at all because of scam ebtc . I lose total of 70 percent . If I just invest it on ETH I recover it back but anyways maybe you need to experience to lose and profit and that's will you lead to be a good trader .

It is enough to analyze only bitcoin, now all coins depend on bitcoin. I think bitcoin is now very bullish, it is just waiting for its exploder.

I can't read graphs like experts do. I read about latest updates on social media and those really works for me. News really affects alts movement and trades and a simple negative news will make alts value dip in minutes, and so with positive news. Some gives trading signals and that also helps a lot.

yes its back, almost every altcoin is pumping more than 15 percent,,its good time to buy more altcoin actually when bitcoin up like this week..

i do not dare to say it,
because everybody have different opinion regarding those statement,for me an alts are back when we are moving 50% Minimum from its price before.
but right now everything was moving up for only 20%(even though some of them were moving for more than 100%).
what we are talking were not those low cryptocurrency but those top cryptocurrency,
when those top cryptocurrency get pumped hard,our total market capitulation will increase that is the sign that alts are back.
for now i do not know,but if Bitcoin keeps moving up like this we may see it in a couple months later.

When I check coinmarketcap I see that the top alts have risen by a higher percentage than bitcoin. More to be made in some alts than bitcoin.

Hey where are you mate, from alien country huh? Everyone happy being this day since we find the good price growth on each and every day. I suggest to don't read the fake news shared on media side.
If you think that those news are true you will be fooled and others will make money by investing on a right time mate.
Please read the news only on Coindesk. Then don't spread negative on this forum as well.

All altcoins recovered but fluctuations are still possible any time. If this is the time for the altcoins  to be back on their track, daily traders might do a long term investing for a while since the market is showing us a good view for this quarter.

They didnt leave after all which means they dont really need to comeback  :D Price increase and Price decrease its a normal thing which i dont really expect too much as long you can able to ride on the waves which it can able to make you money then thats the thing what matters most and as a trader or investor you are really here for that thing. Am i right? Checking out those graphs it does really signifies that this is indeed a very volatile market.

I actually think altcoins would consolidate for few days before take off again. We saw some heavy profit taking today. But overall technical is in favour for more uptrend. The charts are ok to look the the trends and cycles. We would see more volatility for these few months. Anyone that want to see mega bullring might need sometime, overall fomo is picking steam now for crypto.

This a nice stat, I like people who back up their claims with data, instead of people coming here and just giving information base on their feeling, this can easilty be seen in the market with the performance of most of the Altcoins this week that the market is back and BTC dominance has decreased significantly to 3*% from 45 we were earlier this month

so many points in your post , but in the end i will say buying alts now will be a good choice .
bcoz we know it is still not bull run . and when bulls will come we can secure good profits .

I really love this presentation, a very good one indeed. And as we all know, most coins are traded against BTC and hence if BTC is getting back on its feet then there's a higher prediction that most alts will bounce back

Great statistics. Reading and understanding cycles in these markets are essential knowledge for proper trading strategy. This article is a bit too complicated, too many charts and structure is a bit blurred, but the main idea is understandable. And yes, everyone involved in cryptocurrencies should know market cycles very well.

Awfully right so as a trader,  we should not let our emotions eat us up because if we let it we will end up as a failed trader.  It is not easy to do trading especially if you can't accept the fact the cryptos are volatile,  getting emotional will only make you contribute to the panic selling.

I also do day trading but mostly when the price is getting high.  Selling coins at low price will not be helpful so holding is the best at this time. I know what I'm doing and I am sure that it I am earning profit with my way of holding when price is low and selling when price is high.  Anyways,  my method could be the opposite of what other people are doing.

Alts are definitely back, nice green candles everywhere. Not just a bitcoin dominated market, it has room for all sorts of coins so go and diversify your portfolio without holding 90% btc, you can reduce that to around 50% and still trade safely

Thanks for all the work you have put into this research. It was an interesting read.

In my opinion, alts and the entire crypto industry has not yet fully recovered. I still believe that we are in a bear market. I could be wrong but I expect the market to drop a little over the next days. It might not be a flash crash but it could still drop in value. Hopefully, this will be the last drop before a great crypto season.

A bit too many of these charts. But thanks for your work. It seems to me, however, it all depends on how bitcoins behave. The rest of the coins are usually adjusted to the direction determined by bitcoin.

Thanks for the data and graphs. I think that alts are definitely back and have started the next big rising cycle already. We can see that many good altcoins are already more than double from their bottoms so that is a good sign. Bitcoin also is breaking above its downtrend so it is looking good for now.

When bitcoin cash moves this way
https://www.coingecko.com/en/coins/bitcoin-cash#panel
It's a positive sign for alts

I think the most alts are nearly back. If you are still sitting in a coin that has not pumped in the last 8-10 days, you maybe have a problem :D You should think about buying some other stuff that has potential to pump!

look like the reason is about to start we can see new pumps in almost all coins most probably we can see pump of all coins by next month most probably

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Studying what project/coins that you are holding will give you a good glimpse of success, most of those top alt project already showing strong movements,
but not because they are the first one to increase value means that those other coins will be stuck, there's always good timing for crypto investment, better to know the progress of some project before deciding what to do next.

Predicting the future is virtually impossible. It's enough if the whales want to manipulate the market. All predictions and graphs are then useless.

Yeah I personally think altcoins are pretty much back in business. They still are not in good price level when you consider all time high levels. But I am very bullish on their price for future as markets are in green.

Alt will be back if bitcoin back. Underlying all of alt is bitcoin. I dont think alt will be back if bitcoin stay at this price except very good fundamental altcoin like Dash, eth and EOS. Dash have a really good features, ethereum also good used at every ico and EOS have enough funding to hold the price againts bitcoin. The platform also will be launch soon.

I think we see good buy-in levels atm. for longterm investors it does not matter if whales or bad news will dump the market again, mid-/ longterm we will see great performances for solid projects like eth, dash, xmr, zcash, ltc, waves and so on.

However, I think some projects, especially Eos is totally overhyped (don't forget that its a erc20 token atm!!!); even with the best main net the crypto community has ever seen, it will take years until devs all over the world will use Eos platform instead of eth.. Cardano next overhyped blockchain. tron has NOTHING lost in top 10..

What I want to say: buying solid (old/ stable) projects now: good idea in my opinion; buying new projects cause they are so great and everyone loves them: (always) risky