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– TIMESTAMPS –
2:14 The Cryptocurrency Market
6:40 The Altcoin Market
16:47 Technical Indicators
20:01 Exit Strategy Simulation
23:20 Final Thoughts
⛓️ 🔗 Useful Links 🔗 ⛓️
► Bitcoin Stock to Flow model (4-year cycle): https://www.lookintobitcoin.com/charts/stock-to-flow-model/
► US Dollar Depreciation, Inflation etc.: https://wtfhappenedin1971.com/
► Bitcoin Dominance Chart: https://www.tradingview.com/symbols/CRYPTOCAP-BTC.D/
► Cryptocurrency Correlations: https://cryptowat.ch/correlations
► Blockchain Explorers: https://www.blockchain.com/explorer
💸The Cryptocurrency Market 💸
The cryptocurrency market is small and young compared to other similar markets. The fact that the crypto market consists of very new and fairly complicated technologies has made it very volatile.
As governments and seasoned investors (which hold much of the wealth) become more familiar with Bitcoin and other cryptocurrencies, they are starting to invest more into the space. However, the cryptocurrency market is still mostly made of money from inexperienced and opportunistic investors.
Despite its day to day volatility, the cryptocurrency market follows a clear 4 year cycle which is being driven by Bitcoin’s halving cycle. Every time a Bitcoin halving occurs, the total supply of new Bitcoin coming into the market from miners is cut in half.
💰The Altcoin Market 💰
The term altcoin is used to describe any cryptocurrency that isn’t Bitcoin. There are thousands of altcoins, and they are generally much more volatile than Bitcoin. This makes them even less friendly to seasoned investors. Their price action is also largely driven by Bitcoins.
Altcoins only make up a small portion of the total cryptocurrency market cap. Small and medium cap altcoins have the biggest potential for growth, since it is easier to double a 100 million market cap than a 100 billion market cap. It is unlikely that any altcoin will have a larger market cap than Bitcoin
⚖ Tokenomics ⚖
Tokenomics are the most important factor when it comes to planning an exit strategy. Inflation will help gauge whether a cryptocurrency will lose its value over time. Most cryptocurrencies detail their tokenomics on their websites and ICO documentation.
Knowing how tokens have been allocated is also critical, as any early investors and founders who were allocated tokens may sell when the market rises which could crash the price. Sometimes tokens that have been allocated to early investors and founders have a vesting schedule, meaning they are released slowly over a period.
📊 Technical Indicators📊
Technical indicators can be useful but don’t tell the whole story. When used in tandem with other factors such as an altcoins tokenomics, they can serve as an important part of your exit strategy. When it comes to altcoins, the two most important indicators to take note of are Bitcoin dominance and an altcoin’s trading strength against Bitcoin in satoshis.
When Bitcoin dominance falls, it means more money is going into altcoins. The last time Bitcoin dominance dropped, it sent altcoins to new all-time highs. Slumps in Bitcoin dominance seem to last 1-2 weeks, giving you plenty of time to exit during that time if you want to.
🤑Exit Strategy Simulation🤑
Pick an altcoin and take note of its market cap. Since we know that market cap will probably not be bigger than Bitcoin’s any time soon. Once you’ve estimated how high your altcoin could rise in the rankings, calculate what that return could be when the bull market hits
Next, take note of any tokenomic factors which could stunt that price growth between now and the bull market.
Finally, pay attention to technical indicators as the bull market approaches. When Bitcoin is trading sideways or increasing gradually in price and its dominance is falling, you will know it is almost time to sell.
When altcoins start going parabolic, check to see if yours is gaining or losing value relative to Bitcoin. Set a realistic exit price and keep in mind that traders like round prices
📜 Disclaimer 📜
The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading cryptocurrencies poses considerable risk of loss. The speaker does not guarantee any particular outcome.
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