Bulls believe we're right before the Altseason starts
Bears think BTC is about to crash HARD
I spent hours analyzing the data. These are the possible scenarios for where the market may go next🧵:
It's becoming more challenging to "predict" cycle stages as crypto matures.
In this cycle alone;
-The "altseason" was replaced by a memecoin season
-SOL broke ATH without Ethereum doing the same
-Bitcoin has been continuously breaking ATHs
So what does this mean?
This means 2 scenarios are at play;
1. This cycle is different from others
Firstly, there was no institutional involvement in crypto in the previous cycles, but now institutions and countries are accumulating BTC.
Blackrock is currently holding $70B+ worth of BTC (Via Arkham)
This means that the long-term buying pressure for BTC has increased significantly. This will bring;
-BTC leading every major move
-High BTC dominance than we're used to
-Pullbacks getting bought up (institutions keep buying)
But for alts, this changes capital rotations
In this cycle, altcoins have seen Capital Dispersion.
Meaning, more assets are in the market and liquidity is spread across multiple sectors, stopping any ONE sector from pumping hard
You can see this when comparing memes to DeFi;
-Last cycle's peak: Memecoin market was half of DeFi
-This cycle's peak: Memecoin marketcap equalled DeFi Marketcap.
So, if this cycle really is different,
-BTC dominance will continue to rise as the capital stays with BTC
-Altcoins will see micro-bull runs with one sector pumping at any given time
This means previous bull run playbooks won't apply, and you simply have to trade rotations.
2. The bull run is not over yet
BTC only ran ≈1.6X above the previous cycle highs so far.
This is not what a normal blow-off top/ bubble looks like and could indicate a longer accumulation before the market starts to run aggressively again.
The recent BTC pullback to $74K was bought up quickly, and the price pumped 50% in less than 50 days.
Previous bull runs have also seen BTC retrace 40-50% from ATHs before pushing further up.
This means if we go by historical data, the current price action is nothing abnormal.
Historically, ETH breaking past its previous cycle highs triggers an altseason, but ETH hasn't even reached $4K yet
This could mean the altseason is yet to start, and this cycle will last way longer than expected.
But for this, we need to see a couple of signs:
With steady downward pressure on ETH/BTC, a bottom signal/ reversal in this area could rotate mindshare and capital back into altcoins.
With major capital drain from memecoins, people are rotating majorly into DeFi, RWA, and other utility sectors.
So what's the best way to make money?
If you're a trader, you don't have to marry a bias or commit to scenario 1 or 2
-If BTC dominance continues up, trade BTC by longing strength and shorting weakness
-If alts start to bottom, shift attention there and buy the strongest coins
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