Cash inflow into alts : if the cycle repeats, what to expect ?
This chart is based on the assumption that the 2017 bull run for BTC and alts will repeat in 2021. This is a very risky assumption and to be honnest it should be wrong because of the enormous cash amount those percentage represent. And also it should be wrong because past price action doesn't determine futur price action, it's just an indicator.
In all honesty I have no clue how much billion of fiat will go into crypto in 2021.
That being said, cash flow is certainly going into crypto if we are indeed in this kind of cycle, but what percentage of it will go into BTC and into alts ? When should we enter, and when should we exit ? Should we consider percentage, total cash flow, or even the timeline to know when we should exit ?
The only thing I know is we should try to find out what target to expect in order to not be the idiot who buys the top and sell the bottom. I think those macro studies can help remove strong emotions generated from the day trading and the fact that we all watch charts all day long.
Fundamentals are very good for BTC as you probably know, since the last halving, it seems that it mimics the now classic huge bull run, and parabolic trend with a few minor correction along the way.
Fundamentals are even better in my opinion on alts especially for DeFi (you can watch the DEFIUSDTPERP index that keeps on giving new ATH).
Trading alts is always risky because it all depends on the so called alt season that is entangled in the btc bull run and find it's power during btc correction and sideway movements. Alts may just be a way for smart money to accumulate more BTC when it's correcting during huge cash inflow. It certainly looks like it. This could mean that the price of alts (both the shitcoin or the very good project) are really overvalued. But if we look at BTC.D since the beginning, it looks like some alts (ETH is the best example) really do have some value and that value may be groing faster than the value of BTC. Lot of alt/btc pairs on exchange can be studied to determine alt potentials.
Now, with those charts in mind. IF total market cap of crypto go from 1kB to 12kB like the log charts tells us. and IF 73.63 on btc.d was indeed the top for the bitcoin dominance during this cycle and dominance will decrease by 50%, it could mean that at least 50% of the 11kB cash flow going into crypto will go to the alts (at one point).
Alt total market cap is now 370.264 B as TOTAL2 shows us, this would be a 2000% increase.
Some alts will perform better than other, and we don't really know when alt season will start. If I remember well, during 2017 we had several alt boom in the summer and then in nov/december.
Between those pumps, bitcoin recovered and crushed alts all the way.
Anyway to summarize what this analysis tells me to do :
1/ to study which alt will perform (based on project fundamental, technichal analysis, and hype)
2/ entry should be based on dip buying (because there will be many)
3/ exit should be really greedy.
4/ expect huge volativity and expect huge fear of missing out when bitcoin grows, and panic when alts goes down.
=> For instance, if I think SNXUSDT will outperform other alts and enter the top 10 on coinmarketcap. It's x4 on the price of 1 SNX, but as other alt market cap will grow too as cash flow into cryptos the good exit could be +8000% and $1400 USD. Now, this one is a little crazy, I'll admit. As SNX has already grow a lot.
But if you look at some other alts from 2017.
NEO went from $5 to $185 (+3600 %)
NANO went from $0.2 to $36 (+17000 %)
ZCASH went from $100 to $900 (+900 %)
IOTA went from $0.16 to $5 (+3000%)
Be greedy.
In all honesty I have no clue how much billion of fiat will go into crypto in 2021.
That being said, cash flow is certainly going into crypto if we are indeed in this kind of cycle, but what percentage of it will go into BTC and into alts ? When should we enter, and when should we exit ? Should we consider percentage, total cash flow, or even the timeline to know when we should exit ?
The only thing I know is we should try to find out what target to expect in order to not be the idiot who buys the top and sell the bottom. I think those macro studies can help remove strong emotions generated from the day trading and the fact that we all watch charts all day long.
Fundamentals are very good for BTC as you probably know, since the last halving, it seems that it mimics the now classic huge bull run, and parabolic trend with a few minor correction along the way.
Fundamentals are even better in my opinion on alts especially for DeFi (you can watch the DEFIUSDTPERP index that keeps on giving new ATH).
Trading alts is always risky because it all depends on the so called alt season that is entangled in the btc bull run and find it's power during btc correction and sideway movements. Alts may just be a way for smart money to accumulate more BTC when it's correcting during huge cash inflow. It certainly looks like it. This could mean that the price of alts (both the shitcoin or the very good project) are really overvalued. But if we look at BTC.D since the beginning, it looks like some alts (ETH is the best example) really do have some value and that value may be groing faster than the value of BTC. Lot of alt/btc pairs on exchange can be studied to determine alt potentials.
Now, with those charts in mind. IF total market cap of crypto go from 1kB to 12kB like the log charts tells us. and IF 73.63 on btc.d was indeed the top for the bitcoin dominance during this cycle and dominance will decrease by 50%, it could mean that at least 50% of the 11kB cash flow going into crypto will go to the alts (at one point).
Alt total market cap is now 370.264 B as TOTAL2 shows us, this would be a 2000% increase.
Some alts will perform better than other, and we don't really know when alt season will start. If I remember well, during 2017 we had several alt boom in the summer and then in nov/december.
Between those pumps, bitcoin recovered and crushed alts all the way.
Anyway to summarize what this analysis tells me to do :
1/ to study which alt will perform (based on project fundamental, technichal analysis, and hype)
2/ entry should be based on dip buying (because there will be many)
3/ exit should be really greedy.
4/ expect huge volativity and expect huge fear of missing out when bitcoin grows, and panic when alts goes down.
=> For instance, if I think SNXUSDT will outperform other alts and enter the top 10 on coinmarketcap. It's x4 on the price of 1 SNX, but as other alt market cap will grow too as cash flow into cryptos the good exit could be +8000% and $1400 USD. Now, this one is a little crazy, I'll admit. As SNX has already grow a lot.
But if you look at some other alts from 2017.
NEO went from $5 to $185 (+3600 %)
NANO went from $0.2 to $36 (+17000 %)
ZCASH went from $100 to $900 (+900 %)
IOTA went from $0.16 to $5 (+3000%)
Be greedy.
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