Good day Hiveians!
Join me in analyzing the crypto markets!
I want to share a technique here that could be interesting for anyone wanting to buy the potential next dip.
This technique is especially useful for buying alt coins and is based on a relative drop of altcoins to bitcoin. The main idea is that bitocin could see a further drop down to 20k - 23k. If you are just thinking about bitcoin this might be a great buying range. I would then suggest that you ladder your orders and split them up into at least four buying orders between this range.
But if you are thinking about buying alt coins here is a method of figuring out the potential lows for them. But keep in mind that you basically have to update these buying orders everyday as the market is in constant movement. Here again is the range of the potential drop:
We now have to figure out how alts would drop relative to bitcoin. I did these calculations for July 1st, so they are already somewhat outdated. But I just wanted to share the technique.
These calculations are based on the previous drop seen in this chart. One can then look at alt coins and see how they performed. Generally they all corrected more than bitcoin as they are more volatile. We can then use the ratio of the degree of their correction relative to bitcoin to calculate their potential drop if bitcoin drops between 28% and 40%.
Once again, this was done for July 1st, so they are already outdated today. What you can see are the ratios relative to BTC (Divergence to BTC in % which is calculated by dividing the drop of an alt coin to that of bitcoin; e.g. for Rune it is 78/55=41%). This can be done for any alt coin. As you can see some alt coins corrected 40%+ more than bitcoin while others (ETH, SOL) only corrected 10-16% more. In other words, they are more stable and will resultingly also drop less in a next potential correction.
Identifying these ranges has to now also be combined with chart analysis. One has to look at past support levels. Let's do that demonstrative for Sol.
On July 1st, Sol had a range of 32% and 46%. There is good support at ~18$ which should be the low point for that correction. Accordingly, one should set up buying orders above that level as seen in the chart.
Useful? Let me know!
As a general reminder: Please keep in mind that none of this is official investment advice! Crypto trading entails a great deal of risk; never spend money that you can't afford to lose!
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