Ethereum Rises, Bitcoin Dominance Falls – Is the Altcoin Season Finally Coming?
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Welcome back,
The crypto market recently touched its all-time high at $3.94 trillion. The market cap, which seemed like a dream to many, has finally been accomplished, and right now we are sitting at $3.92 trillion, which is very close to the all time high.
In this blog, I am going to talk about the future movement of Ethereum and the rest of the altcoins. The market is buzzing with conversations that the altseason is finally here, and altcoins are going to pump. But after going through this blog, you will probably know whether the altseason is here or not, when it will come, and what my thoughts and opinions are. So stay with me until the end so that you can understand all of it.
Why Are People Talking About Altseason?
The primary reason for people talking about altseason is very clear. People have seen Ethereum going crazy in the last few days, where it pumped from $2800 to $3600, and XRP made a new all time high at around $3.5. That was a 23-24% surge in the value of XRP in just few days and considering its market cap that was a good performance by XRP.
But we need to understand something very clearly. These are not altcoins and anyone thinking that have to learn about the market more. These are large cap coins. Their market cap is in billions of dollars. The real altcoins are those that fall under the category of mid-cap, small-cap, or micro-cap coins. Unless and until we see a massive movement in these categories, we cannot say that the altseason has arrived.
The Bitcoin Dominance and Ethereum's Role
Another reason people are talking about altseason is because of the falling dominance of Bitcoin. Recently, Bitcoin dominance touched a peak value of 65.5%, and currently, it is resting at 61%, which is a 4.5% correction.
That is the reason why we have seen Ethereum and XRP pumping. And do not get me wrong, Ethereum is pumping, and that is a very positive thing for altcoins and altseason to arrive. But we have to understand that Ethereum is currently making its run, not the altcoins.
Altcoins are still resting below their one day timeframe resistance. Unless and until they break that resistance, I do not think we are even close to the altseason. For the majority of tokens, the resistance on the one day timeframe has not been broken yet. And that is the primary thing if you go by technical analysis.
Technical Signals and Catalysts
So in case you are a technical analyst, make sure to keep an eye on the one day timeframe chart. Breaking that resistance and then confirming it as support will actually be a strong sign for us to say that altseason will start in the coming month.
Also, one of the catalysts in the market that people talk about is rate cuts. The Federal Reserve currently has no plans to cut interest rates. It is not happening in July, and it might not happen in the month of August either. I think we will see it either in the month of September or to be on the less likely side, maybe August. Once we see rate cuts by the Fed, we will probably see some liquidity coming into the market, and altcoins will actually benefit from that.
Market Sentiment Can Flip Overnight
Just imagine how fast the sentiment in the market changes. A few weeks or even a few days back, people were saying that alt coins are dead, and there will never be another altseason in the history of the crypto market.
But just within a few days, people are again talking about altseason. People are talking about coins going 10x, 20x, or even 30x in the coming weeks and months. That is how market sentiment changes. And just one bad news will be enough to reverse the sentiment again. So what is the best thing to do right now?
My Advice for New and Experienced Investors
If you are someone who is new to the market, then I would ask you to simply practice DCA (Dollar cost averaging). Make sure that you invest 50% of your portfolio in Ethereum. Not in Bitcoin as it is already near its high that is why my suggestion would be Ethereum. And the rest of the 50% you can invest in some top tier projects.
If you want to understand how to diversify your portfolio properly, then go and check the blog I shared a few days back on this topic. You will learn a lot from it, and it will help you diversify properly if you are new to the crypto market.
If you are already experienced and known to the market, then you probably have your spot holdings with you. The best thing to do right now would be to hold them. Do not try to act smart in the market.
Should You Try Multiplying Your Holdings?
You can try to act smart in a process where people try to multiply their tokens or holdings by selling a token at a higher price and then buying it back lower. But I will suggest you not to try that right now because the market is very unpredictable, and we can see it go up at any moment.
A few good news stories or positive fundamentals can trigger the market and push it upward quickly.
So even if you are planning to do something like that, I would suggest you to use only a small portion of your portfolio, maybe around 20 to 25% at max. If you are not a technical analyst, please do not put yourself in such situations, because you might end up selling your tokens at a price that seems high now but could feel very low compared to what the market could offer in the coming days.
Let's conclude
At the end, as I always say, it is your investment, and the decision is entirely yours. Whatever I have said is my opinion, and it is something that I have personally practiced.
So the decision is yours, and I hope you will make the right decision for yourself. That is all for this blog. We will meet very soon in a new blog.
Thank You and Happy trading Everyone.
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