This article is only a personal market view and does not constitute investment advice. If you act according to this, you are responsible for your gains and losses.
First, let's talk about two personal conclusions:
This pullback is believed to be a form of wide-range oscillation, and the possibility of falling below 59,000 RMB is unlikely.
After this pullback is completed, there will be a phase transition to the trend of altcoins rising collectively. Subsequently, the increase in BTC will be lower than that of altcoins.
Let's start with BTC.
The uptrend since October last year can be seen as a 5-wave upward structure. The 2nd wave pullback in January was a steep and rapid decline, with a short and quick drop of about 20%.
This time, it is a 4th wave pullback, which should be different from the steep nature of the 2nd wave and should show oscillation. The time is longer than the 2nd wave, and the form is similar to a wide-range oscillation range. In addition, near 59,000 RMB is the low point of the large oscillation in early March, with a sharp increase in trading volume, indicating a large number of buyers entering. The sharp increase in trading volume also indicates that this is an important support level. The low point of the previous pullback did not fall below 59,000 RMB.
Moreover, from the indicators, there is no bearish divergence on the daily level. When the price reached a new high, the indicators also reached a new high synchronously, which is quite normal. It is not the type that requires a correction of the indicators after (multiple) bearish divergences, so it is believed to be just a normal pullback.
Personally, it is believed that it is a good time to buy around this price range (59,000-62,000 RMB), and the cost-effectiveness is quite high.
Finally, the consideration is, what if the view is wrong? The bull market is still here. As long as leverage is not used, just wait a little longer, and there should be no problem.
- Now let's look at altcoins.
First, let's look at the trend of the market share of Total 3/Total. In the chart, there are two clear trends of rapid decline in the market share of small coins. The starting points are circled in red, and the ending points are circled in blue.
The starting point of the first segment is around October 2020, and the ending point is around January 2021. During this process, BTC first started to rise alone and encountered a phase pullback in early January 2021. After that, altcoins started to collectively rise. The week with the lowest market share of altcoins was also the week when BTC prices briefly surged in early January.
The starting point of the second red box is November 2022, and the blue box is early March 2024. It shows the same performance again. During the decline in market share, BTC rose alone, and except for a few coins and new coins, there were generally no outstanding performances.
The same plot, the same taste. Based on the long-term weekly divergence of the market share of small coins and the appearance of increased trading volume, it is believed that this blue box is the bottom of the market share of small coins.
Therefore, after this round of pullback is completed, we may see the collective rise of altcoins.
One thing is certain, the trend of altcoins taking off will definitely come. The only value of most altcoins is to tell a good story and then become the selling channel for BTC.
Why do altcoins always perform at the end of the entire market trend?
Even if a BTC is worth over $70,000, which is already over 500,000 RMB, it is a stage that retail investors cannot afford to play. If retail investors do not buy BTC, then who will these BTC be sold to?
The answer is simple. After completing its main trend, these BTC are used to boost various small coins. BTC buys various altcoins, and then sells the altcoins for USDT. So you will see many coins against BTC's exchange rate and trading volume skyrocket, and then a large volume of BTC completes the selling through altcoins. This phenomenon can be seen in the crazy rise of LTC and XRP in 2017, as well as Sol, Ada, and Doge in 2021. For more coins, you can review whether the coins that rose fiercely in each bull market will show this situation at the top.
Of course, the situation is slightly different this year. Due to the existence of ETFs, the US stock market can bear a lot of BTC selling, but altcoins in the cryptocurrency circle are still an indispensable selling channel.
So, as long as BTC can rise, altcoins will definitely show a collective trend of eruption, with ETH leading the way. Conversely, if altcoins do not collectively rise, the market is not over.
Follow me and make the most of the trend profits with the least amount of operation.
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