Watch out for TOTAL and sectoral dominance!

11 Jul

https://www.tradingview.com/chart/3ZJX8AJu/

The chart above shows the total coin market cap (TOTAL) and coin sector dominance from the start of this long term bull cycle (around Bitcoin's 4th halving) to the present.

I personally find this chart analytically and practically useful in my investing, and here's how I use it
- When the total coin market cap is decreasing, I take a break from trading or only buy long term coins.
- When the total coin market cap increases, I take it seriously and pay attention to the order in which the dominance is performing.
- For example, at the moment I'm only interested in Bitcoin, which is trading sideways in a range, or Ether, which is making a double bottom.

I particularly like that chart because it gives you the full picture over a specific period of time at a glance.

The total coin market cap is all the money that has entered the coin market anyway, and you can look at the dominance of each coin sector to see where the bulk of that money is coming from relative to 100%.

So that's the analysis, and if we want to extract some investment insights from this chart,
- First of all, Bitcoin dominance is trading sideways in a range, and I'm looking for an ether season (or alt season) to come on the downside of that range.
- However, I think an Ether season is more likely than an Alt season because the dominance flows are more positive for Ether.
- In addition, Ether has the issue of a spot ETF launch, which we can interpret as more favourable for a rally.