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 be Discussing the Bitcoin dominance if you Guys like the content make sure you Subscribe to the channel give the video A thumbs up and check out into the Cryptoverse premium at intothe Cryptoverse decom one of the things that We've said throughout this year is that The Bitcoin dominance will likely rise Throughout the entire year now again This has not been a popular view but it Is now starting to be embraced by a lot Of people which is funny because often Times the rally by Bitcoin dominance can Sort of top out by the end of the year Okay um but some of the things that We've said this year right we've said That that Bitcoin dominance will go up That ether Bitcoin will drop alts will Of course bleed back to bitcoin I mean They're basically all the same Theory to Some degree but and I've said that if You one exposure to the Cryptoverse Bitcoin is is where you Likely want to be because it gives you Exposure to the upside while minimizing Your downside risk right so you get that Exposure while minimizing your downside Risk I've said many times that a DCA Strategy for Bitcoin is is in my view The best approach based on some Metric

Whether it's a risk metric or or Something else we put out a video back In January um talking about talking About that idea and we've done it Throughout the years as well but in this Video I I want to talk here about the Bitcoin dominance obviously Bitcoin has Has taken out the prior yearly high as We mentioned yesterday uh and just for You know reference I you know to see it Go this much higher than the yearly High Um is is a pretty impressive move I know Coming into the year I said that that Bitcoin could go to you know would Likely be between 12 to 35k this year But you know after after this move in The summer I was sort of expecting that 35k was off the cards but nevertheless Bitcoin has made it there and the Dominance has continued to go up right So in that sense a lot of these macro Theories continue to play out right I Mean of course the nuances of every Single move are are very difficult to Predict but what have we seen we've seen The Bitcoin dominance Trend higher all Year we've seen ether Bitcoin basically Collapse all year and I know some people Don't like it when I use that word Collapse but what do you call this right I mean this is this has just been I mean It was slowly dropping and then we said That once it breaks 0058 then the losses By ethereum against Bitcoin could

Actually accelerate and you can see that Right after the ether Bitcoin pair lost 0058 it's really started to accelerate Here to the downside uh the first week After losing 0058 uh ethereum dropped About 2% the next week it dropped 3% This week it's dropped 5% so you can see That these losses by ethereum continue To to add up especially on on its Bitcoin pair and and so this macro Theory continues to play out right just Like the Bitcoin the Bitcoin dominance Theory continues to play out so sort of The speculation as we've said before is That a lot of what we're witnessing is The conversion of Altcoins to bitcoin right we're watching The conversion of altcoins to bitcoin And that is why the Bitcoin dominance Goes higher no matter the direction of Bitcoin USD if you think about it if you Look at at Bitcoin dominance you can see That it's now up 10 weeks in a row Actually on about the first or second Week I think we we said it's likely Going to follow something similar to What the what the dollar did and and PR You know 10 11 um well we didn't know at The time that it was going to be 10 or 11 uh green week weeks in a row for the Dollar but we said it could follow Something similar and the dollar did 11 Green weeks in a row Bitcoin dominance

Is now in its 10th green week in a row But what's interesting is that while Dominance has gone up 10 weeks in a row Bitcoin USD has not I mean obviously Bitcoin USD has gone a lot up a lot over The last 10 weeks but you can see that Only about four of them were in fact Green so four were green six were red Bitcoin dominance went up for every Single one of those weeks and now we Find ourselves at 54% dominance I Believe the last video that I did on the Dominance we were about 51 to 52% now We've gone up another 2% in a relatively short period of time One of the things we mentioned that with The dominance is that once it breaks out Right from this from these levels over Here we could back test it and if it Does we'll likely hold it as support it Also corresponded to holding the bull Market support band as support and ever Since there it has been exploding to the Upside and again my target for the Bitcoin dominance that I've had for the Last couple of years is in fact around That that 60% level okay now it doesn't Mean that it has to go all the way there And if it does it doesn't mean that it's Going to go all the way there in this Move right we could go up to like 55 56% And then spend two months consolidating We could also top out here at 54% and Then spend another month or two

Consolidating um you can see that we've Had plenty of moves up and then Consolidation and what's interesting is That I mean it's been a pretty clear Trend I mean it's been just a series of Higher lows and higher highs and again What a lot of people ask me is well why Do you focus so much on the dominance Instead of instead of Bitcoin USD and i' I've I've tried to explain it as best I Can I think either you buy the theory or You don't okay you either you either Think it's important or you don't and Some people are just only ever going to Be concerned about the USD valuations of Their their portfolio right they're only Going to care about what their altcoin Is doing against the US dollar they're Never going to compare they're they're Never going to care about the Bitcoin Valuation there's nothing I can say That's going to make them care but I Will remind you the reason the main Reason we talk about Bitcoin dominance Is to figure out what sector of the Market is worth the risk if you want to Put your money into the market and so if We're bullish on the Bitcoin dominance Which by the way remember Bitcoin is the Lowest risk asset in the crypto verse if You buy that theory but even based on Like market cap it's been around the Longest it's held the number one spot For the entire time but if you buy that

Theory or that thesis that Bitcoin is The least risky asset in the cryptoverse It's also subject to less regulation Than the rest of the market and you also Think that the dominance of that Cryptocurrency that you think is the Least risky is also going to go higher Then the argument is that altcoins are Not really worth the risk with respect To bitcoin at least collectively that Doesn't mean that some altcoins cannot Perform I think every time I put out This video I get a few people that say What about this Alt coin you're not Considering this one yes there's always A few that outperform but if the Collective altcoin Market were Outperforming Bitcoin then the dominance Of Bitcoin would not be going higher the Bitcoin dominance continues to go higher Because the altcoin market continues to Underperform bitcoin it doesn't mean That Bitcoin can't go down and that's One of the arguments is that at some Point right it does go down and and the Altcoin market still bleeds against it But at this point of course that has not Yet happened I mean we've seen some some Bleeds by Bitcoin where the dominance Went up but the the the you know the the Price of Bitcoin has continued to to Push higher okay so in a sense a lot of A lot of these theories are playing out It's just a painstakingly slow process

Right the ethereum Bitcoin valuation has Continued to collapse you know and and Again I I can't tell you how many people I've gotten into arguments with about This I just kept saying well like this is Just a a a high a lower high a lower High a lower high a lower high and so on And so forth and it's also a low a lower Low Etc and now we're just continuing to Go into that into that capitulation Phase I'm not saying it can't bounce at Some point around these levels but my Expectation is that the ethereum Bitcoin Valuation continues to drop remember Bitcoin rallies serve a purpose they Break altcoins off of their Bitcoin Support levels perhaps this is the last Support level that needs to be broken Okay the going below 0.0049 for the Ether Bitcoin pair so in that sense Right you know in the prehab year and we Said this by the way at the beginning of The year right in the prehab year no Matter the direction of Bitcoin USD the Bitcoin dominance should go up therefore If you want exposure to the cryptoverse It tends to be a good idea to be mostly Exposed to bitcoin because it gives you The upside potential while minimizing Your downside risk and you might say Well what if my altcoin goes up 10% or Something or what if this altcoin that I Want to buy goes up 10 20% the argument

Is that while it might happen that that Altcoin could go up 10 or 20% it only Does that if Bitcoin went up at first Right it's like if Bitcoin makes a move Then yes the altcoin market can be Dragged up Kicking and Screaming but it Was only because Bitcoin made the move First right not because the altcoin Market was leading the way is because Bitcoin led the way and you can see that With the dominance now at again at 54% that thesis continues to to be valid Right breakout of the prior of the prior Um accumulation Zone back test it and if You guys remember we put out a video on This date when it was back testing it um I believe it Was um yeah right around here and we Said I don't think it spent two years Trying to break out of this range just To fall back in and um and you can see That we we held it and now we've Continued to to see the dominance Explode to the upside the bull market Support band for dominance which is what Previously held now ranges from 50.1 14% To 50.4% so Bitcoin dominance is well Above its bull market support band one Of the things that we've also mentioned Is that if you go look at um at Dominance excluding stable coins it's Actually now at over 59% right it's at 59. 25% and and I've had a lot of people say

Well the Bitcoin dominance uptrend only Started in 2022 because it put in a new Low here in September of 2022 when the When we had the merge rally by ethereum But the AR the counterargument to that Is that no the Bitcoin dominance has Been going up since here since May of 2021 this metric includes stable coins Which if you're going to use the Dominance to better understand the Altcoin market then the stable coin Market cap is not as relevant I'm not Saying it doesn't have some relevance I Like using the Bitcoin dominance Including stable coins a lot and I talk About it a lot I think there's also Value in looking at it excluding stable Coins as well and when you look at it Excluding stable coins what you'll Notice is that it's been putting in Higher lows since May of 2021 and every Step of the way it seems like a lot of People have faded this idea I think a Lot of people are now starting to come Around to it but for a long time this Was faded like this view was faded that The dominance would go higher and when Ethereum had the merge Rally even though the dominance went Lower including stable coins the only Reason that really happened was because The stable coin market cap was still you Know going was still at fairly elevated Levels right I mean even in May of 2022

The stable coin market cap was elevated And you can see that the stable coin Market cap in in May of 2021 was all the Way down here at like you know like 82 Billion and then in in September of 2022 the stable coin market cap was at Like 144 billion so that was the reason Why the dominance of Bitcoin was was so Much lower lower um by that point rather Than you know rather than being at these Levels is because there's a lot more Stable coins in the market but if you Exclude the stable coin Market if you Exclude it what you'll see is that Bitcoin dominance has continued to Trend Higher and it just keeps on putting in Higher highs and higher lows right so This is the chart that has kept me risk Averse out of the altcoin market I've Said if you want exposure to crypto Bitcoin is where you want to be because The dominance of Bitcoin will likely Continue to Trend higher that doesn't Mean that Bitcoin is immune to drops I Mean we are getting pretty pretty high In terms of just the short-term move That Bitcoin has had but what it does Mean is that it it minimizes your Downside in the altcoin market by the Way if you don't necessarily believe That this is just simply a continuation Of a rotation of capital I can kind of Understand your view because Bitcoin is Now at a new yearly High it is like

That's a true statement but a Counterpoint and this this could change Right I'm not going to sit here and say That it can't we obviously know that the Markets are incredibly volatile and at This point you know a lot of changes are Happening to the cryptoverse in a Relatively short period of time I mean The the the market went up you know Bitcoin went up 14 and a half% in this Week alone right so this thing can Change very quickly but at least in the Short term total market cap is is at the Same more or less valuation than it was Back in July and it's at the same Valuation more or less than it was back In April so at this point I think a lot Of these rallies by you know that we've Seen are a lot of people converting Their alts to bitcoin and then Bitcoin You know going on a run people foming in And so far it just keeps leading total Market cap up to the same valuation if You were to Overlay Bitcoin USD onto This chart you'll see that at each Top By total market cap Bitcoin USD has been At a higher level and that's why the Bitcoin dominance contain continues to Go higher while Bitcoin has gone higher Total market cap has it has Wicked Higher right this this Wick is higher But it hasn't NE it hasn't yet proven to Be a breakout of this prior range total Two so far has been a series of lower

Highs right so while total market cap Has has sort of hit that same level in April July and October total two which Excludes Bitcoin has been putting in Lower highs and total three which Excludes both Bitcoin and ethereum has Been putting in lower highs in in both April July and potentially October Although you know the month is not over Yet and we don't know exactly how far This this will take us up but I think The issue is if if Bitcoin does roll Over at some point in the in the next Week or two and total three is unable to Take out this high and if total two is Unable to take out this High then is There not a risk of it just sort of Coming back down to this you know to the Lower part of the range if Bitcoin were To pull back bitcoin's had a massive Rally the altcoin market has not really Seen that same type of rally okay and Another way to visualize this rather Than looking specifically at the Dominance is to look at the altcoin Market total three minus usdt divided by Bitcoin right and if you look at that Chart this is what you get and and I've Said many times that the altcoin market Is likely going to roll over and um and And and bleed against Bitcoin and you Can see that we got this bounce uh just Like we got prior times right we said we Might get bounced by the altcoin market

Against Bitcoin from this level we did It got rejected off the bullmark support Band just like it got rejected over here And now it is is now back down to 40% Remember this this metric tends to top Out at parody with Bitcoin at one and It's bottomed out over here at around 25% now if that is the case it means That the altcoin market still has Another 37 to 38% drop against Bitcoin This has not been a popular view right But if you go back and watch all these Videos on this metric you'll see that You know in a prior video it was like 48% before that it was even higher and It it always sounds bad right but you Know you fast forward and it's like Instead of the altcoin market needing to Drop 48% which is what it was back in August against Bitcoin now it's more of A 37% drop okay and I think what's Happening is a lot of people are Potentially being blindsided you know Blindsided by this because they're only Looking at altcoins on their USD pairs They're saying well you know my altcoin Is is is holding up okay right it's it's Doing okay on this USD pair but what They're not necessarily recognizing is That it's getting completely destroyed On its Bitcoin pair take adaab Bitcoin For example it it is broken this support Level which is what happens in Bitcoin Rallies and then the question is is what

Happens at Bitcoin rolls over a to Bitcoin has nowhere to hide um same Thing B&B Bitcoin right I mean this is a New low going all the way back to April Of 2021 not a new macro low but it's Lower than it has been since April of 2021 which is when the Bitcoin dominance Made this drop was April of of 2021 dot Bitcoin put in new lows this Week right a lot of a lot of altcoins Have put in new lows this week avac Bitcoin has put in new lows this week Okay a lot of them have some of them Have not right but a lot of them have And you know cardano is one Avalanche is One um I'm not really sure if if I think Maker Bitcoin yeah this one's had a bit Of a pump off of this low here so this Is not an example Theta Bitcoin it you Know it's gone lower uni Bitcoin it's Going lower right it took out it took Out this may low it took out the June Low a lot of these altcoins just keep Going lower on their Bitcoin pairs but Every step of the way people just keep Saying that they're holding up Well but I don't necessarily see it that Way I I see that that they're up on Their USD pairs at least Temporarily because Bitcoin is up but What happens right we've said all year Long if Bitcoin goes up dominance goes Up if Bitcoin goes down dominance goes Up because there's less liquidity in the

Altcoin market right so the whole Argument is it doesn't matter the Direction of Bitcoin USD the dominance Of Bitcoin is likely going to go up no Matter what one thing that I think a lot Of that caught a lot of people off guard With the Bitcoin dominance is that if You were to look at at where it topped Out last cycle it topped out in September so there's a lot of people That were very vocal that you know when It was back over here in September they They said that we were going to go below These range highs because that's where It topped out last cycle okay but I Think the main the main difference why That has not been the case is because if You were to look at at monetary policy You can see that interest rates were Already starting to drop by the time Bitcoin dominance topped out okay this Time Bitcoin dominance has or sorry Interest rates have not started to drop Yet so as long as we're heading into Tighter and Tighter monetary policy it's Not just High you don't just have to see A higher interest rate for it to be Tighter monetary policy just holding him At sufficiently restrictive levels is Tighter monetary policy reducing the Size of their balance sheet as long as This continues to be be the main thing The dominance of Bitcoin I think can Still go up right and I mean again it

Did not top out last cycle until we Started to get rate cuts and we haven't Even seen a rate cut yet and we're Likely not going to see a rate cut until The S&P sees some type of a significant Selloff so the altcoin market has been Bleeding back to bitcoin basically for The entire year total two continues to Put in lower highs total three continues To put in lower highs total market cap Of course has not it's been reaching Sort of the same level every single time But that's because it includes Bitcoin Which is the main reason the asset class Exists in the first place so dominance Continues to go up another way that We've measured this before is to look at The year-to-date Roi of Bitcoin Dominance right we talked about that a Lot without stable coins and if you take A look at this metric and you compare 2023 to the a Ian you can see where it Is right now like it's at 1 point it's At what 1 Point um 23 if you look at the Average of the last Two having year or preh having years you Get this chart right so you can see that This is still following the the general Average right it's and we said we're Likely going to see the Bitcoin Dominance close this gap before the end Of the year and have we not done that Right we've done that I still think it Will Trend higher into the end of the

Year um you know maybe seeing it go up To 1.2x uh 1.2 6X off the yearly open or 26% uh off the yearly open um or 1.25x So I still think there's a little bit More room for the dominance to go up This year but I also don't necessarily Think that it's going to top out until We go back to looser monetary policy um So just be just be cognizant of that of That idea that last cycle dominance did Not even top out until that happened now One of the reasons why I think that I Underestimated the amount of liquidity In the market is just because I I I I Perhaps I should have looked closer at Um you know at at these metrics like Total 3 minus USD Bitcoin and Recognizing that last cycle you know Bitcoin did not find its yearly High Until total 3 you know fell below 40% or So right around that 40% level I think It was during the week that was between 36 to 41% where Bitcoin found those Yearly highs so I think there's just Been a lot more liquidity in the market Um than you know than I was expecting But it doesn't necessarily change the Macro Trends and it doesn't necessarily Change the macro views the macro views Again being ether Bitcoin bleeds this Year the macro being all Bitcoin pairs Bleed Bitcoin dominance goes up if you Want exposure to crypto Bitcoin is where You want to be not that it can't go down

It's just that it does go down the Altcoin market will likely bleed even Worse so hope hopefully these videos on Bitcoin dominance have been useful to You guys not everyone appreciates them But one way that I I I sometimes reach a Few people is by showing this this chart Over here um uh and that is to take the Inverse of of the Ada Bitcoin or ether Bitcoin or or dot Bitcoin just the the Inverse of all Bitcoin pairs so you're Looking at Bitcoin alt pairs right so if You're look at a to bitcoin and you were To take the inverse of it so you're Looking at now the Bitcoin a evaluation Look at this trend I mean like in in 2021 one Bitcoin would have fetched you Around 15 16,000 Ada now one Bitcoin Fetches you 120,000 Ada okay ethereum Right look at the inverse of that look So you're looking at the Bitcoin sorry You're looking at the uh the the Bitcoin Ether pair look at this trend right I Mean back in in the merge one Bitcoin Fetched you less than 12 eth now it gets You 19 E right it's been a huge move a huge Change so so you know it certainly is Possible and and and we you know going Back to sort of this year-to dat Roi Chart for for the uh for the Bitcoin Dominance yeah it's possible that we're Going to reach some type of of of Topping process over the next couple of

Months at least short term um but what We've also seen is that while it does Tend to you know top out at at at Certain times what we continue to see is That it continues to go up given enough Time right you know all these moves have Just been you know you get a move up and Then you consolidate and then you move Up and consolidate move up consolidate And then again move up the reason we Focus on this is because we want to know As investors when altcoins become worth The risk against Bitcoin and last cycle I don't think they became worth the risk Against Bitcoin until they were down Here at around 25% of bitcoin's market Cap now a lot of altcoins did not bottom Out on their USD pairs even at 25% of Bitcoin's market cap but they did start To collectively bottom out against Bitcoin so that when Bitcoin actually Entered into a period of quantitative Easing those altcoins were able to start Doing very well not only on their USD Pairs but also on their Bitcoin pairs so That is why we focus on this I know not Everyone believes in the dominance topic As something that's important but Throughout this year the Bitcoin Dominance has has kept me generally away From the altcoin market you know not Interested in it if you want exposure to Crypto bitcoin's where you want to be it Is it made me believe that the ethereum

Bitcoin valuation is collapsing that all Bitcoin pairs are collapsing on any Given day uh like today you can look at Some altcoins and see they are up Slightly but what have the trends been Right the trends continue to be that They just they they they continue to Just collapse right all Bitcoin pairs Collapse ether Bitcoin collapses by the Way you know a lot of people keep Telling me that ether is holding up well On its Bitcoin pair and again a lot of That is just sort of subjective but at What point does that narrative no longer Hold is the question you know it's down 15% this month alone right so if it was Holding up well over here at 0075 and if It was holding up well according to the You know according to the masses at 0065 you know is it still holding up Well and what happens if it goes below This level is it still holding up well If that happens so I think the question Is is at what point do we say all right Like this is a collapse of the of The Ether Bitcoin valuation and it's no Longer holding up well so just keep an Eye on the etherum Bitcoin valuation um Because it it does tend to be something That it it it you know because the Market cap of ethereum is so high Relative to the altcoin market when it Drops it can be a major Tailwind for the Bitcoin dominance and again that's one

Of the reasons why dominance is up so Much is because the ethereum Bitcoin Valuation has has dropped 15% this month Alone and the month isn't even over yet Right but it's it's dropped you know 15% this month alone so we will continue To follow the Bitcoin dominance I I do Hope you guys enjoy these videos I do Know that that Bitcoin USD put in a new Yearly High uh at around $35,000 while Again that was my generally my general View uh going into the year I cannot I Cannot claim that anymore because I sort Of I I sort of relinquished that view After after the summer uh came to pass So I think I underestimated the amount Of liquidity in the market uh that was You know coming out of the altcoins and Going into Bitcoin that did lead a new Yearly highs for Bitcoin the overall Macro trends that we've been discussing Still of course remain the same if you Guys like the content make sure you Subscribe to the channel give the video A thumbs up and again check out into the Cryptoverse premium at intothe I'll see you guys again bye


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