If you were in the crypto market in late 2017, these price actions may look similar to you. Yet, there are a couple of parameters to be considered. Let's throwback to 2017 initially, then we can scrutinize what's taking place in 2020's crypto ecosystem.
Until 2017, Bitcoin had small scale bull-runs in which the price multiplied by x times. However, neither the market cap nor the mass adoption was enough to push the price further. 2017 was a milestone in the history of Bitcoin.
Bitcoin traded between $ 19800+ when it was an all-time high. However, while Bitcoin was marching, the ones whose bags were full of altcoins were not delighted with the increase in Bitcoin price.
Here is a snapshot from 17/12/2017 when Bitcoin was testing new ATH. If you check the prices of altcoins, they were taking a slice from the crypto market pie but the bull-run was only acknowledged for Bitcoin.
What happened after Bitcoin was overfed?
Here is a snapshot of when Ethereum was testing the ATH. The reason why I took this snapshot regarding ETH because it's the pioneer of altcoins.
Once the chart was examined in detail, the price of ETH, BCH, XRP, and many others gained value against both USD and BTC because, this time, it was alt-season.
The main rationale behind this move is that once people take enough profit from BTC, they either sold BTC for USD or they bought altcoins with their BTC bag. As a result, the market had green days for altcoins.
Note: Market cycle for each coin does not take place synchronously for all of them. Some coins may pump earlier while the others are stable or vice versa. (Inner Cycles are exceptional ^^)
Why did the market have 2 separate cycles?
There are some basic reasons for the division of BTC and Altseason pumps. First of all, people believe in Bitcoin Standard because of the corrupted financial system in the world. They want to have sound money that is limited in terms of supply and accepted by the majority. Gold, Silver, and Bitcoin are called together against the policies of Central Banks.
The other reason is related to the altcoins having solid products. The prices do not necessarily locate by technical analysis; the prices are calculated through fundamental and sentimental analysis, as well. So, there was an opportunity to increase the number of BTC or USD you have with the pump of these hardworking altcoins. In the end, they pumped a lot.
What was great about the altcoin seasons is that even if a coin was useless, it was even bought and pumped by people who were a bit greedy š I made quite nice gains by finding Gems that were about to pump even though they were totally copy-cat.
What lessons can be taken from the history of Cryptomarket?
For me, without understanding the major trend that Bitcoin is in, I never trade BTC/X pair in the market to make gains. The basic reason is that if Bitcoin loses %5 value, altcoins lose %10 respectively. So, I always consider the last bull-run and stay away from trading altcoins against BTC as long as they are traded at a strong support level.
ā Buy if it is a strong support level/area (not local, at least daily/weekly)
ā Take profit or use stop-loss against BTC (The first role, do not lose your money)
ā The main strategy is to pile up BTC until new ATH
Within the Altcoins-world, there are local kings, too.
For example, Ethereum is the king of the alt season. Especially in this term, Ethereum is evolving into something else. People started talking about Ethereum while expressing their positive ideas. Other precursors are LTC, BCH, and XRP remembering the previous bull-run. However, lots of things have changed in 3 years. I believe there are a couple of other altcoins that will be pumping earlier than the other with the new alt season.
Over the last 2-3 weeks, some "pioneer" altcoins pumped in double digits. However, I'm not satisfied with these pumps. With today's market cap, more than %50 increase in price would be much desired.
Last but not least: While still waiting for a new pump in BTC, having a new position in altcoins can be a bit risky because people care a lot about the number of BTC that they hold.
These are personal notes that I took for myself. I closely observed the market; earned and lost a lot over the last 4 years.
What is your stance for the topic? What lessons did you take?
Please enlighten us with your experience. š