Bitcoin Dominance

Hey everyone and thanks for jumping back Into the cryptoverse today we're going To talk about Bitcoin but more Specifically we're going to discuss the Bitcoin dominance which as always of Course is everyone's favorite topic if You guys like the content make sure you Subscribe to the channel give the video A thumbs up and also check out the sale On into the cryptiverse premium at into The cryptiverse.com do remember that There is a free tier available at into The cryptiverse.com which will of course Get you access to things like DCA tool Like a DCA tool as well as a few Logarithmic regression models Let's go ahead and jump in now the Bitcoin dominance is something that we Have actually been talking about it Feels like forever and our general Expectation has been That the dominance will ultimately go From 40 to approximately 60 right that Has been the view we have talked about That view for a long time and I still Stand by that view now what is Interesting is that there are we know That the path from 40 to 60 is not a Linear one it is very much a stochastic Process but without fail every time the Dominance has any type of a pullback A lot of people come out and and they Say why the dominance you know is no Longer going to Rally right they they

Sort of poke fun at the idea of the Dominance rallying on each higher low Okay so the same arguments that are Being made here To sort of flood the idea behind the Dominance rally were also made here and They were made here as well and they Were made here And here and the list goes on and on Right So eventually right eventually Dominance will likely top out eventually But the arguments that are being made Such as the the relative strength index And all that sort of stuff all those Arguments were made at every prior level As well and and then eventually the Dominance broke back out to the upside So in this video what I want to do is I Want to show you at least some Compelling evidence in my view as to why The dominance will move higher we'll Talk about a couple of nuances uh to This Theory as well and and show you a Couple things to take into consideration Even though I do remain very bullish on The Bitcoin dominance and hopefully by The end of the video uh we can be at a Better understanding of of just the Extent of how far the altcoin Reckoning Can in fact go So the first thing I would say is that Retesting the breakout point was always A likely outcome it is an outcome that We discussed many times and in fact it

Is the same thing that occurred last Cycle as well after we broke out uh it Occurred a lot quicker I think it Occurred a lot quicker last cycle Because there was not nearly as much Excess liquidity as there is this cycle But we broke out and then we came back Down to the breakout Point only to then Continue the rally so yes retesting the Breakout point Is a legitimate thing right and this is A this was always a likely outcome Oftentimes when you spend a long period Of time in a range and you break out of That range you can often come back to Retest the the range that you broke out Of I do not believe this is my view and Again like I could be wrong right I've Been wrong about things before I do not think that Bitcoin dominance Spent two years consolidating in this Range only to get a false breakout that Is my view okay I think it is important To have some views that I stand by that Is my view I do not think that dominant Spent two years in that range only to Get a false breakout and then break back To the downside I think what's more Likely is that this is just simply back Testing the breakout point now I want to Talk about something that you know I've Received a lot of feedback on this year And a lot of people say well you know

You've been focusing on the Bitcoin Dominance rally a lot but how come you Never focus on the Bitcoin USD rally Right well if you follow this channel You should know the answer to that if You follow it closely and the answer of Course is well my expectations for the Prehabbing year is that Bitcoin spends About half a year going up and half the Year going down so I'm not going to you Know get super bullish on something that I ultimately expect to spend most of the Year going sideways right one of the Things that we actually talked about Before is that when Bitcoin USD was sort Of testing the 20-week back over uh back Over here in in June we noted then that The dominance was more bullish than Bitcoin USD itself and why did we note That because dominance back then was not Even at the point where it was testing The bull market sport band right back Over here in June the dominance was so Bullish that it did not even get a Re-test of the 20-week SMA and the 21 Week EMA so what we said back then was That whenever Bitcoin USD does fall Below the 20-week SMA and we suggested That it could very likely occur in August or September of the prehabbing Year due to a seasonal correction in the S P 500 in August or September of the Pre-election year that the dominance Should still continue to go higher even

If Bitcoin does not so we could have a Pre-hiving year where Bitcoin ends the Year at the same price that it started The year But the dominance could have gone from 40 to 60 percent during that time frame So you would have effectively seen a Rotation of capital from lower or from Higher risk assets to lower risk assets From lower liquid assets to higher Liquidity assets and so you can see that Bitcoin has broken below its bull market Support ban but Bitcoin dominance has Not Going into that same idea that the Dominance of Bitcoin is fundamentally More bullish than Bitcoin USD is and the Reason for that of course is because We are in a in a phase of the cycle Where liquidity is being pulled out and The higher liquid assets get hit quicker Or sorry the higher risk assets get hit Quicker and there's not nearly as much Liquidity in the altcoin market so yes The altcoin market on these on these Bear Market rallies by by these all Coins they can bounce a lot but there's Still not a whole lot of liquidity there And so when when the when the risk-off Environment sets in those alt coins get Absolutely wrecked right and that's Where the altcoin Reckoning comes from You don't have to have not you know you You did not need to wait for Bitcoin to

Close the 20 week to close below the 20 Week to to realize that all coins were Getting wrecked just look at what they Were doing on their Bitcoin pairs for The last 20 months Because Bitcoin was in a risk-on Environment since January it is load a Lot of people into a false sense of Security with the altcoin market but I Would say yet again that the altcoin Market I will talk about ether Bitcoin Later Um but the altcoin market Has been unable to put in a single Higher high All of these are lower highs it has not Been able to put in a single higher high Since this whole thing kicked off and This price this price action you see Over here that is relatively humdrom and And no one really cares about this Occurred when Bitcoin was going up Okay so think about that Bitcoin went up And this is what total three Accomplished Nothing it's at the same level that it Was at back in November 2022. so what Happens to the altcoin market if we go Into a risk off environment where Bitcoin Goes Down And if you are bullish On the S P 500 and therefore you think That because the s p is bullish which Again there that we're we're in a Seasonal phase where the s p corrects

There's no guarantee that this is quote Unquote the big one if it is the big one Then yes the crypto gets a crashed even If it's not even if even if the s p Trends higher later on I will remind you That in 2019 The s p had a pretty deep correction Here in August September and then it Rallied to new Highs but during that Rally Bitcoin kept going lower Okay so when we look at at the dominance When we look at at things like you know Bitcoin and and how is it going to Perform if the s p goes higher well I'm Putting forth the arguments that I have For a long time that in the second half Of the prehabbing year it doesn't really Matter what the S P 500 does crypto Likely gets wrecked either way because It's further up on the risk curve we're Getting later on into the business cycle The closer we get to the uninversion of The yield curve the closer we get to the Recession risk actually materializing And that's where typically all coins Going into that might actually find a Bottom and and say the early part of Your recession but I just don't simply I Think we're not at that point just yet Okay so yes we have basically all these All these influencers coming out and They're they're fighting the Bitcoin Dominance but why should this fight why Should this be time be any different

They they did the same thing here at 47 They said they did the same thing at 43 The same thing at 41 and 39 and 38 Percent You know so if you go look they're going To use the same argument no matter what And they've been fading the dominance Every step of the way and I think they Will continue to fade it every step of The way so look to see If this holds even if it goes below like It did last cycle you can see here if This if this was the rate If This Were The breakout point right here We we came slightly below it but then we Got back right above it the following Week so even in that environment you Would have to see multiple weekly closes Below 49 right really below the breakout Zone of around 48.9 percent or so so if You get multiple weekly closes below There Then it might start to pay attention in Terms of perhaps it goes back down but I Don't think that will be the case I Think it's more likely that the Dominance holds the dominance moves Higher it consolidates it moves higher And consolidates and it moves higher Consolidates and it moves higher and Consolidates again One thing that we've talked about a lot Too is that whatever Direction the Dominance is going into September it

Typically reverses course and you know We said a few months ago that if the Dominance get to rally over here going Into September then it might actually Get a temporary pullback before Continuing its run in you know sometime After the having but it's actually gone Down Into September right I mean you could See that it hit a local high in June It's gone down and we're only about a One week one week away from from September so I would argue that there's A good chance that September could lead The dominance higher once again There's a couple of interesting charts That we could really take a look at here That I think are are somewhat compelling And one of those of course is total Three minus usdt divided by the Bitcoin Market cap and when you look at that This is the chart that you get and you Will notice again that the altcoin Market tends to top when it reaches a Parity with Bitcoin so when the when the Altcoin market cap is approximately Equivalent to the Bitcoin market cap you Can see that's equivalent at about one That's where the altcoin market tops out On their Bitcoin pairs but they also Bottom out at around 25 percent with the Exception of the post having rally by Bitcoin it took it all the way down to About 18 okay

Now where we are right now with the bull Market support band or bear Market Resistance band of this metric it is now At 0.48 to 0.5 and we just hit .48 0.48 Or 48 so the altcoin market right now Using this metric is about 47 of Bitcoin's market cap what I find Interesting is that this is the same Level that it got rejected at more or Less in the last cycle And after getting rejected around this Level Total three minus usdt divided by Bitcoin Dropped another 40 to 50 percent from These levels Right so from here From where we currently are to get back Down to this low it would be another 47 Drop which I contend is still a highly Likely outcome now if you want to Include ethereum then you just simply Need to go look at total two minus usdt Divided by Bitcoin and when you look at That chart what does it show you it Shows you that this current level here At 0.86 or 86 percent of bitcoin's Market cap so everything You know everything everything in crypto Uh except for Bitcoin and we've Subtracted out usdt you can see that it Has peaked out at or it's potentially Peeking out here just below 90 but again Where did it Peak out last cycle at

Around in the pre-halving year right in The prehabbing year where did It Ultimately Peak out and you can see that It came to about this level once again Before it ended up dropping very quickly Down to about 0.57 so a drop to 0.57 From here would mean another 33 to 34 Drop and if it comes all the way back Down to this level then it means another 60 or about a 59 drop Relative to bitcoin so a lot of people Are coming out and they're they're They're very bearish on the Bitcoin Dominance because of the most recent Pullback even though I would argue it's Nothing more than a retest so the prior Breakout point they are getting bullish Right as it's probably getting rejected By the bull market support ban and and There's a good chance here that we see The altcoin market sell off with respect To bitcoin once again okay so please be Careful that the the sort of the the the Sentiment that you'll find on Twitter Anytime we get a day where the all coins Are up against Bitcoin everyone is is Sort of dunking on the Bitcoin dominance But then when it goes up and puts in a New high they're typically nowhere to be Found only for their only that they're Searching for another reason why they Want to fade the Bitcoin dominance but They've been fading it every step of the Way from 38 to 52

And now that the dominance has gotten a Simple pullback to the breakout point They're dunking on it once again a level Which a few weeks ago they would have Told you was the reason all season was About to start Right Just be careful with these narratives Okay and I I say this uh very seriously Because the altcoin market Can wreck you right very easily if you If you do not understand how much risk Is involved in the altcoin market That's not to say that there are no bear Market rallies in it that's not to say That there are not a few all coins that Have outperformed Bitcoin and have Likely already bought them against Bitcoin but it is to say that Collectively most of these all coins are Still likely in macro downtrends against Bitcoin and the last couple of weeks yes We got a bounce on all Bitcoin pairs but It doesn't necessarily change the larger Trend One thing that some people have looked At is is to say well the trend is broken Do remember and this is a petty this is A petty argument on my part so I'm not Going to spend too much time on it but But trading view did add a lot of new All coins to the definition of total Three or at least of total and and so Because they've added a lot of new

Altcoins that was one of the reasons why Dominance is actually lower if we were Using the same definition on trading View that they were using maybe a few Weeks ago I believe the dominance it Would still be below 50 but maybe it'll Be about 49.7 or 49.8 percent so one of The reasons it's taken as big of a hit As it has is they actually change the Definition but even in this case At 49.32 it is still not a perfect Reflection of the dominance because if You go look at it on my website where We're accounting for a lot of you know a Ton of different cryptocurrencies we Have it 48.47 so on my website I Actually have the dominance as lower Than where trading view has it but What's more important is the trend right The trend is higher lows and higher and Higher highs look at this trend here Right it's just been one Higher low After another and I would still say that This is just likely another higher low If you in if you exclude stable coins This is the chart that you get Excluding stable coins higher lows Higher lows Since May of 2021 okay higher lows Even the even the rally that eth got Last year You know going into the merge was still Did not reflect anything other than a Higher low on the Bitcoin dominance and

That should not come as a surprise I Mean if you go look at at The Ether Bitcoin valuation it still was a lower High was it not This was a lower high compared to what It what ether Bitcoin accomplished in December of 2021 So one of the ways that the dominance Goes up a lot is ether Bitcoin gets Rejected here at its own bull market Support band and if it does and if it Continues to come back down then the Dominance of Bitcoin can go up quicker Than a lot of people think it can it can Move several percent in just a few weeks At times so do not forget that it can do That it's done it many times before and It can do it again and I still look at This chart The Ether Bitcoin chart and Say Has anything changed does it not just Look like a massive distribution phase People keep saying that ether Bitcoin is Holding up well this year the monthly Hikanashi candles for ether Bitcoin have Been rad since the year started Since January they say that it's held up All year and all last year too but again The yearly candles On ether Bitcoin Are both red for 2023 and 2022 and note That in 2019 the close was below the Wick of 2018. so if in 2023 the close For ether Bitcoin is below the wick in

2022 then it means that ether Bitcoin Could close the year Below 0.049 Last cycle We close the year about 28 27 percent Below this Wick 27 below that Wick today Would put ether Bitcoin coincidentally At 0.036 and I've said many times I Think the ether Bitcoin valuation is Going to that 0.03 to 0.04 range and I Still stand by that statement And so Yes it's easy it's easy for people to Come out swinging on the Bitcoin Dominance anytime anytime there is a a Pullback but I have to ask you you know Who's on the right side of the trend Here who's been on the right side of This is it the people that keep fading It or is it the people that just keep Saying hey This is just a higher low and it's just One Higher low after another so please Be aware that if you constantly fade the Dominance in favor of of altcoin Accumulation normally what happens is Bitcoin will chew you up and spit you Out if you are if we are in the Prehabbing year and that's where we Currently are So do be aware of that likely outcome The other thing I've mentioned many Times as to why the dominance should Head higher is because if you go take a

Look at the social risk which we've Talked about a lot right if you go take A look at the social risk you will Remember and I've said this many many Times who's the marginal buyer of your Altcoin when people are not leaving the Space lower highs and lower lows on the Social risk and when you go plot out if You were to plot out the social risk so Let's plot this out really quick so Social risk And then I don't really care about the price I Just want to look at the social risk and I also want to look at the dominance Without stable coins And look at this compelling chart As the social risk goes down The dominance goes up as the social risk Goes down The dominance goes up the social risk is Still in the process of going down Therefore the dominance in my opinion Should still had much higher Okay So if if Bitcoin were to sell off Quickly yes you can sometimes see the Dominance go down but I I think after The market really starts to digest the Move you should see the dominance Continue its breakout once again and Just the other day we saw ether really Start to sell off somewhat quickly and And then it sort of popped back up but

If if the risk-off environment remains For for at least a few months which I Think it likely will I think there's a Lot more downside on ether than there is Bitcoin and do note that throughout History and I believe this is true I Have a table I don't have it up right Now but every time Bitcoin has closed a Weekly close below the 20 week estimate Ether Bitcoin has always underperformed Until Bitcoin closed back above the 20 Week estimate so my expectation again is That ether Bitcoin The Ether Bitcoin Payout will underperform until until Bitcoin gets back above the 20-week Moving average it doesn't mean that once They all capitulate it doesn't mean that Ether Bitcoin can't can't go higher First but just from where from where Ether Bitcoin was when Bitcoin broke Below the 20 week to where it'll be when Bitcoin breaks back above it I would Expect to eat their Bitcoin to be at a Lower valuation and that might not occur You know it could still be a while Before we see it um before we can Actually test to see if that if that if That theory plays out once again or not Um going back to Total three I I would Say that you know this is somewhat of a Dangerous pattern you're looking at a High a lower high a lower high and I Mean you know as if we keep if we keep Coming back down to this level and keep

Testing it it seems like it's only a Matter of time before we could break Below it do note that I think a drop Below this level in the altcoin market That would likely Mark the depression Phase of the cycle and that is probably You know somewhere over here it could Easily be where where all coins find Their lows on their USD pairs the ones That are at least going to survive for The next cycle somewhere in this Depression phase over here and it could Occur as late as early 2024. if you Think that that means that um If you think that's uh too long just Remember last cycle alts did not bottom Out until two months before the having In a very brief recession and again we Have an inverted yield curve good chance The altcoin market does not bottom out Until around yield curve uninversion or Maybe slightly after Um and so yes I think ultimately that is The direction that we're likely heading Uh getting into a depression phase in The altcoin market where The Ether Bitcoin valuation leads the altcoin Market down remember as I've said in the End even the Giants will fall and that Very much includes the ether Bitcoin Pair and if ether if the ether dominance Goes down right if the ether dominance Goes down then you're likely going to See the Bitcoin dominance going up and

I'm not calling for ether dominance to Come back down here I'm not saying that It's going to go back to seven percent But maybe it comes all the way down to Like 10 percent or something again these Are lower highs These are all lower highs we also have Some higher lows to take a look at right Here and we'll see what happens but I'm Telling you if if the ether dominance Drops Look at look look at it right here last Cycle I mean this is where it was when When it really started to drop and once It dropped it dropped quickly I don't I'm not saying it has to go back Down here Um I don't think it will to be Completely honest but It could come back into this like nine To ten percent range which is a pretty Big drop by by Ether and I think a lot Of that would go a lot of that dominance Would just go into into Bitcoin like I Think the dominance of Bitcoin would go Up at the detriment of The Ether Dominance and if you look at if you look At it overlaid with Bitcoin dominance if I can um Pull that up there it is right so if If ether if ether dominance does drop Then that would likely cause the Bitcoin Dominance to go up just like it you know Just like it historically has right so

You know They're again like there are certainly Reasons that you could look at why why The dominance Can't go higher right there's a lot of People that are talking about that stuff But I just wanted to spend this video Telling you why there is a good chance That the dominance does go a lot higher And hopefully I've made a compelling Case there are counterpoints to some of This stuff for instance in 2019 once Bitcoin got this weekly closed below the 20 week estimate in September So it's occurred late September that did Mark the low for some all coins on their Bitcoin pairs not all of them but it did Mark the low for some of them and so That is something that we would have to Contend with as well and I will say that If the dominance does not continue the Rally as we see Bitcoin USD Theoretically go down Then perhaps we would need to take more Note of that right this is a Counterpoint and it's a valid Counterpoint to consider like if if You're not familiar with what I'm Talking about like if you were to look At Ada Bitcoin remember it really Bottomed out here in in Q3 of the of the Prehabbing year Q3 of the prehabbing year but it held These lows the great thing about this

Theory with all coins and the altcoin Reckoning is that you wait to see if it Holds the lows right and if Ada Bitcoin Holds the lows then that might mean that Some of these all coins have actually Bought about against Bitcoin but if it Doesn't and it just keeps on Capitulating then it's just doing the Same thing that it did last cycle The other thing too Is that during this area down here you Might say well gosh like you know maybe I should have just bought Ada right over Here right in August 2019. remember it Held the lows In a Bitcoin USD downtrend right in a Downtrend so now that we're potentially In a Bitcoin USD downtrend you wait to See which all coins can actually hold Their lows on their Bitcoin Pairs and if Ada Bitcoin cannot hold this low and it Starts moving down in this area then You're likely looking at again the Depression phase of the altcoin market Where going back to this chart we looked At earlier Total three Minus usdt divided by Bitcoin This is where this is where that Depression phase sets in for the altcoin Market where they actually do get that Final flush to the downside where they Go lower than most people think they Possibly could have Okay so

That is just at least one way to look at This Market I know it's not going to Necessarily make everyone happy and There's there's also a chance that it Doesn't play out but I will remind you That there are a lot of people that are Fading the dominance now and it's only Natural but they've also faded it for The last year really and for really for The last two years and there's going to Be a ton of people that are going to Point out lower highs if you're going to Point out lower highs be willing to Point out the higher lows Okay if if from one cycle to another The altcoin market all the new coins That come in this is the common argument People say well there's so many more Coins that come in why would the Dominance go as high well you tell me Right if all these coins mattered so Much if if all the tens of thousands of Coins mattered so much and and made it So that the dominance of Bitcoin was was Just going to just continue to go down Forever why then was it unable to take Out the prior low okay you tell me hey Think about that Even with the stable coin Market taking Away What like 10 of bitcoin's market cap or Sorry not ten percent of Bitcoins market Like 10 of the dominance right if you Were to look at at usdt let me let me

Pull it up on a different one usdt Dominance plus usdc dominance Let me switch this over here Look at this 10 percent Usdt uscc 10 of the market cap Over over here was about three to four Percent right so even though the Stablecoin market took up Three to four percent of the overall Market and this is just two of this Double coins there's other stable coins As well but even though that happened The dominance did not even put in a Lower low It didn't even get to where it was right Not even a double bottom so again for me This argument does not hold under Scrutiny to say that because there's More altcoins the dominance has to go Down forever Because if that argument were true Why did we not take out the prior low So that is why I will continue to think That the Bitcoin dominance is heading to 60 percent 60 percent is this level that We broke down from Right Look at look at this level right here Right so sixty percent is right here This is the level that we ultimately Broke down from We have gone half the move up in a Bitcoin USD uptrend and therefore I put

Forth again the idea that the second Half of the move could come during a Bitcoin USD downtrend remember last Cycle if we overlay Bitcoin USD onto This chart let me flip this over to a Logarithmic scale you will see here very Clearly that the dominance went up in a Bitcoin USD uptrend and then it from From 39 percent to 52 percent sound Familiar So let's zoom out here so I can I can Get all this on the screen From 39 percent Right here To About 51 or so right It really it really well it really Brought a little bit more until until so About 52 percent Maybe about 52. Because you can see here this peak on Bitcoin USD corresponded to like right Around here so Bitcoin dominance last Cycle went up On a Bitcoin rally From 39 to 52 percent It then had a pullback Down to about 49 50 this low on that Candle was about 50.01 percent And then it went up As Bitcoin slowly faded back down So what happens if Bitcoin slowly Fades Back down in a risk off environment what Do you think gets hit worse is it

Bitcoin or is it the lower liquid higher Risk altcoin Market So that again is why I think that the Rally from here by the dominance to 60 Percent Could be due to bitcoin USD going down Slash sideways right like so over here It would go down it would then bounce Back up and then keep going down so There's a chance here that the dominance Goes up not because bitcoin's going Higher but because bitcoin's going lower And now that we finally get to go into a Risk-off environment we get to we get to See true price Discovery to the downside On some of these all coins and figure Out where is the actual bid you know Where the bid is in a risk-on Environment where's the bid in a Risk-off environment and that is why the Dominance can go to 60 just like it did Last cycle So the dominance in my opinion is still Likely heading higher I see a lot of People coming out and and dunking on it Because it's pulled back to the level That they were previously calling for All Season out Um back over here and and I would say There's a good chance it's just going to Bounce here and go a lot higher and I Just want people to be aware of it I say This not from you know I'm not trying to To act in any certain way I just say it

Because I have been wrecked in the Altcoin market more than once okay You don't think I uh I got Um I was in for a surprise over here When I was buying some all coins in Q3 Of 2018 when the dominance was at 50 and And then those all coins just kept Getting hammered hard and then they kept Going down even in late 2019 and early 2020. so even if you think it's unfair To compare it to here well so what Compare it over here Even if the Dominus has topped out There's still the all coins still like To go down on their USD pairs so you Still want to wait On bitcoin pairs theoretically to Convincingly bottom before we can fully Understand if the altcoin market Collectively has bottoms But as long As total three minus usdt divided by Bitcoin Is still in this trend then why should We ignore the prior range of this the Prior range is from 25 to 1 with the Exception of bitcoin's post having rally This seems like the likely outcome Another 40 to 50 drop in all coins on Their Bitcoin pairs In a Bitcoin USD downtrend that is the All coin Reckoning this is what we've Been talking about for what 20 months Now and I hope that these views

Have helped a lot have helped some People not lose a lot of money in the Highly risky altcoin Market if you guys Like the content make sure you subscribe To the channel give the video a thumbs Up and again check out the sale on into The crypto versus premium at into the Cryptiverse.com again we do have a free Tier available so I'd encourage you to Check that out link is in the Description below and the pinned comment And I'll see you guys next time bye