Nothing should be taken as financial or investment advice. Enjoy the ride.
Finally, Bitcoin has reached levels not seen since March 2018. There is a ton of speculation as to why Bitcoin has been unrelentingly pumping, but the answer may be simple. The simplest answer is, the OTC market is out of available Bitcoin and demand has started to far overcome current supply in the market. Constantly, the top wallets have been accumulating Bitcoin since the 2018 crash creating this supply issue.
Bitcoin Price At $10,000
The lacking supply has brought BTC back to recognizable levels quickly over the past two months with Bitcoin blowing past the $6,400 dollar level and into the $8,000 dollar levels. Now with Bitcoin breaching $10,000, investor confidence has returned. There is no more talk of a “bear market” around the industry. Now the only talk is of when to hedge and when not to.
This revisit to $8,000 and $9,000 clearly pulled many reclusive heavy handed investors back from the depths of their hidden portfolios. Although, now that Bitcoin has blown past the unforeseen $10,000 psychological barrier, what will happen next?
Bitcoin Dominance Is High
Currently Bitcoin dominance is soaring to heights that are concerning. On the current surge, we are at least seeing a good trickle into Ethereum and XRP prices as well. The concern lies in the fact that most top altcoins in the top 50 have not directly mirrored these surges. Traditionally, the altcoin market takes place 1 to 2 months after the Bitcoin rally peaks out.
The question at hand is, did Bitcoin just peak? If so, we should see the Price of altcoins start to oump and the market cap dominance of Bitcoin begin to dissolve slightly.
Hedge BTC Back Into Altcoins
Specifically, whales will capture their BTC gains and funnel their profits and principal back into a index of altcoins. This is in preparation of the second surge, the altcoin market.
The altcoin market is when a majority of the market really starts to make money on their investments. For instance, Bitcoin Raised over $10,000 but if Ethereum goes over $1,000 again, investors will make way more money.
Likewise, once projects like Cardano, Iota, Ripple, Litecoin, Monero, and other top assets pop, loyal hodlers will reap massive returns. Let’s take a look at the former market prices when Bitcoin was last at $10,000.
From simply comparing the prices of today’s assets and the asset prices of March 2018, there are some conclusions to be made.
First of all, the prices at this date had already suffered anywhere between 40% to 80% retracement from their all time high. This was a huge blow to investors across the space. Altcoin confidence dropped quickly, and to today has yet to fully return.
Second, the prices of altcoins were extremely inflated in the last bull run of 2017. Without working products, finished research or even real networks, these projects pumped to market caps that made the traditional market seem silly.
Finally, There is immense room to grow for the altcoin market currently. These coins should start to slowly gain back that euphoria level of investing with Bitcoin tipping over that $10,000 barrier.
Hedge Into Altcoins
Slowly, it would be smart to capture Bitcoin and Binance Coin gains if you have either of these projects. Choose rather to reinvest those gains elsewhere for a higher multiplier in the coming months, or wait in a short position. Both approaches should be done incrementally over time as price levels are hit and the potential for higher multipliers decrease from previous growth on Bitcoin. Additionally, this is a short-term analysis, so keep in mind that long-term the strategy could be completely different.