Overview:
As many others might suggest, BTC's bull run and dominance has seemingly come to an end. Personally, I believe this was long over due. Its technology as a whole is fast, secure, and reliable; but when considering BTC relative to the thousands of other cryptocurrencies it is superior in popularity but not much else.
Elon Musk recently commented on BTC's energy inefficiencies, as it is very costly to mine, and the negative effects it has on the environment. While he is a public figure, do not be so foolish as to think he is the one who is responsible for BTC's retracement... BTC has grown exponentially over the past year alone. It deserves a consolidation period and time for reconsidering its energy consumption. Elon is only pointing out what most of the experienced crypto traders already knew.
Comparative Analysis:
BTC's Dominance (shown in orange) you can see has peaked at the beginning of 2021, with a high of ~70%, and has gradually been tapering off to almost 40%, as of today.
The Total Crypto Market Cap (shown in purple) has closely correlated with BTC's run. This was true until May 4th (highlighted in yellow) when BTC's dominance moved less than 50% and we see this correlation die off.
Technical and Fundamental Analysis:
Technical: BTC is started to look bearish on a decreasing monthly volume, reaching its March lows. BTC is starting to look bearish as it retests March lows. Could see lower lows if it fails to rebound on the retest. If we see a spike in volume without it rebounding back towards VWAP, BTC may be especially bearish short term. Looking at the Volume Profile (VP) the price level with highest volume is shown at ~$18,500 and this is where BTC might be headed
Fundamental: Just looking at the energy efficiency of BTC, things look quite bearish. However, BTC adoption among investors, banks, the general public, and merchants is increasing rapidly. This is good news as BTC should start to stabilize and become less volatile. With the largest crypto market cap, ~$1 trillion, it likely wont see much growth in BTC until ETH, DeFi, and the other sectors within crypto catch up.
Trading Discussion (NOT financial advice):
Watch for lower lows and monthly volumes. If BTC gaps down in the coming weeks it may be wise to hold until it flushes back upwards and sell afterwards. There are many opportunities for growth even if BTC is bullish. For BTC lovers & HODLers continue holding as you please but do some research and see what developers are working on. If devs are working towards switching BTC from PoW to PoS or some other energy efficient protocol for validating the blockchain then see what that timeline looks like. If BTC does migrate to PoS then decide a good entry point right before the protocol is scheduled to migrate and you might find yourself in a great position for another bull run in the future.
Chart Description:
Symbol: BTCUSD Index (Bitcoin price in USD index)
Comparing Symbols:
CRYPTOCAP BTC.D (Bitcoin's % Dominance in Total Crypto Market Cap)
CRYPTOCAP TOTAL (The total market cap of all cryptocurrencies)
Indicators:
Log scale
Volume w/ 30d MA
VWAP (anchored on the monthly)
Volume Profile (180d)
As many others might suggest, BTC's bull run and dominance has seemingly come to an end. Personally, I believe this was long over due. Its technology as a whole is fast, secure, and reliable; but when considering BTC relative to the thousands of other cryptocurrencies it is superior in popularity but not much else.
Elon Musk recently commented on BTC's energy inefficiencies, as it is very costly to mine, and the negative effects it has on the environment. While he is a public figure, do not be so foolish as to think he is the one who is responsible for BTC's retracement... BTC has grown exponentially over the past year alone. It deserves a consolidation period and time for reconsidering its energy consumption. Elon is only pointing out what most of the experienced crypto traders already knew.
Comparative Analysis:
BTC's Dominance (shown in orange) you can see has peaked at the beginning of 2021, with a high of ~70%, and has gradually been tapering off to almost 40%, as of today.
The Total Crypto Market Cap (shown in purple) has closely correlated with BTC's run. This was true until May 4th (highlighted in yellow) when BTC's dominance moved less than 50% and we see this correlation die off.
Technical and Fundamental Analysis:
Technical: BTC is started to look bearish on a decreasing monthly volume, reaching its March lows. BTC is starting to look bearish as it retests March lows. Could see lower lows if it fails to rebound on the retest. If we see a spike in volume without it rebounding back towards VWAP, BTC may be especially bearish short term. Looking at the Volume Profile (VP) the price level with highest volume is shown at ~$18,500 and this is where BTC might be headed
Fundamental: Just looking at the energy efficiency of BTC, things look quite bearish. However, BTC adoption among investors, banks, the general public, and merchants is increasing rapidly. This is good news as BTC should start to stabilize and become less volatile. With the largest crypto market cap, ~$1 trillion, it likely wont see much growth in BTC until ETH, DeFi, and the other sectors within crypto catch up.
Trading Discussion (NOT financial advice):
Watch for lower lows and monthly volumes. If BTC gaps down in the coming weeks it may be wise to hold until it flushes back upwards and sell afterwards. There are many opportunities for growth even if BTC is bullish. For BTC lovers & HODLers continue holding as you please but do some research and see what developers are working on. If devs are working towards switching BTC from PoW to PoS or some other energy efficient protocol for validating the blockchain then see what that timeline looks like. If BTC does migrate to PoS then decide a good entry point right before the protocol is scheduled to migrate and you might find yourself in a great position for another bull run in the future.
Chart Description:
Symbol: BTCUSD Index (Bitcoin price in USD index)
Comparing Symbols:
CRYPTOCAP BTC.D (Bitcoin's % Dominance in Total Crypto Market Cap)
CRYPTOCAP TOTAL (The total market cap of all cryptocurrencies)
Indicators:
Log scale
Volume w/ 30d MA
VWAP (anchored on the monthly)
Volume Profile (180d)