Altcoins Still In A Bear Market? This Indicator Says YES

14 ביוני

In this analysis I want to take a look at an indicator that is not often mentioned, but can say a lot of interesting things about the current state of the market.

Note: we only have a population of 2 (N=2) to look at and deduce information from, so take it with a grain of salt.

The indicator in question is the value of TOTAL3 (total crypto marketcap minus ETH and BTC) divided by the price of Bitcoin (BTCUSD). This indicator measures the strength of altcoins compared to BTC.

In other terms:
Indicator goes up = altcoins outperforming BTC, often during altseasons.
Indicator goes down: BTC outperforming alts, often during bear markets.

In the last 6 years there have been 2 strong alt seasons, which occured at a later stage during the Bitcoin bull-market. The indicator touched the bottom support and shot all the way up towards the top resistance. This caused a massive bull-run in alts, where many did a 10x or more in a matter of weeks.

Looking at the past, it seems that there's still more value to be lost in alts relative to Bitcoin. Assuming we have to touch the bottom support, of course.

Furthermore, nothing about this chart suggests that altcoins are a good investment at the moment. They're only losing more value against BTC, even during the latest move from 30k > 70k.

For now, I'd put an alarm around the bottom support. Once the indicator touches that area it's historically an AMAZING time to switch your Bitcoin to alts.

Happy to hear your thoughts!