I don't mean to be apathetic to those who are currently struggling psychologically with the markets. I mean, without a doubt it seems like some alt-coins are dying and of course this is making more than one person doubt themselves. Did we make the right choice?
Looking back
I realize not everyone was here for the last bull market and thus they only know either the downturn, or the peak. This means that all they've seen was the way down, with the exceptions here and there of course. It seems of course that these ideas, that cryptocurrencies are such a fringe gamble, that to anyone who is still mentally green on these concepts, they might just be thinking it might be time to jump ship.
But if we look at how the markets have moved, almost from the beginning, we can draw some interesting conclusions. For one, markets are and always will be cyclical. That is to say that there will always be an up, followed by a down, a BOOM and a BUST. To believe that one can exist without the other is to deny reality. But, and this is the big BUT, not all cycles are precisely the same, nor all coins, since we are talking about cryptos, move at the same time.
Historically BTC has always led the charge, and when this has happened, most people have abandon their favorite alts to chase after the rising price. A move that in my opinion is too risky, but I digress. That being said, what happens after BTC pumps? Well, it must correct, It must come down, first short term, then long term, and every time it does, something else must move.
How did Steem pump last time?
Here's how it happened, and of course it does not mean it will happen exactly in the same way, but it's a historic lesson that is worth taking notes on. When BTC started to skyrocket, those who held BTC felt the need, and rightfully so, to take some profits off the table. This mean that they either had to go on Tether or they had to FIAT directly.
When whales or even just experienced traders decided to take profits is not precisely relevant, but what does matter is that for that month of extreme parabolic movement, that was happening. Some coins, including steem, started to lag behind, and even though their USD value was not entirely bleeding, their BTC value took a bit hit.
Then, because of precisely what I'm talking about, as BTC got rejected heavily, more and more people started to escape their positions. Some, continued to buy Tether and I'm sure SBD was also part of that profit taking, since it's supposed to be pegged to 1 USD (although not perfect). This event also triggered the altcoin run, and that is probably what will happen again.
Altcoins get cheap and Boom!
Think about this, when BTC pumps, altcoins become cheaper and cheaper. So, those who do not subscribe to BTC maximalist ideas, will probably jump into projects they care about and believe in. I'm confident this will happen again with STEEM when the time is right, but of course, I cannot predict when that will be.
When enough people jump into the altcoins, there is sure to be new all time highs a short time afterwards. Why? Because of the valuation that BTC will have, and the shifting of that marketcap towards the total marketcap of the altcoins.
We might see BTC gain in dominance for a few months, but I'm pretty confident that when alt season is back, we will see it fall under 50% very quickly. This of course does not mean I'm against BTC. I'm just telling the story I saw happen with my own two eyes.
You could say that in this case, I'm doing exactly the opposite of what most people are doing. When people are capitulating, I'm buying. But, when people think their ALTCOIN is never coming down, and that BTC is about to die, I'll be selling.
Not financial advice... just my two cents.
MenO
I don't know if you watched the video by bitlord recently but he said something similar. Soon people should be taking their profits and putting them into alt coins. Whatever people might seem to be doing right now there is no doubt that everybody secretly wants alt coins to rise up significantly. There are very few true Bitcoin maximalists out there.
I did not see the video, but I'm not surprised of the opinion of course. Let's see how this plays out!
;)
Bitcoin pumps, altcoins follow
Ahhhh ha ha. I struggled with it last year but not this year. It's all good with me. Go crypto (either way)! Lol.
Great description of the last pump, and a very logical human way of dealing with value and panic and decision making :D I'm glad I'm not really trading, mostly hodl'ing, so I can stay calm no matter what. All buy/sell decisions I make I make months beforehand so it's just waiting till the 'numbers are at what I wanted them to be' and execute my decision.
Cheers MenO, hope you are well <3
The student has become the roberto. Well said my friend.
Roberto I'm in Mia at the moment, we should get a beer soon.
Agreed, I DM'd you on discord. Let me know how long you are in town.
The notion (that I am picking up) that bitcoin is the winner and the store of value and most of the rest are gambling plays will delay a rally in the alt coins until there are winnings and gamblers back to the party. But what do I know. I bought a fair amount of Steem 3 months ago expecting something much different than what we have today. And at the moment I completely regret doing that.
I bought some LItecoin a month back, expecting it to double before bitcoin and I would trade the double for bitcoin. Now it really looks like Bitcoin will double first.
I'm currently in a BTC accumulation phase. I've been buying for around a year now, nothing but Bitcoin. I still hold all my alt coins that are valued a small percentage of their peaks. at some point I'll start topping up on them to bring down their cost average.
your BTC post is #great and #important for BTC
The most pricious time to earn some good amount of crypto is when people is selling and we are buying at low and selling when people is buying at high. 👍
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This is why a diversified approach is best! I have benefited from the improvement in prices but can also now shift allocations to benefit from some altcoin moves if I want to.
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