Maximizing profit in the upcoming BTC bull run
By: Marcin Tyszkiewicz
Tags: Eos, Btc, Leo, Bitcoin

Altcoin prices

The most crucial aspect of investing in alts is not looking at it’s USD price, but rather BTC price* and alts price relative to BTC. This gives us a much better understanding of altcoin prices.

*It’s important to understand that by “BTC price” I don’t mean just BTC value expressed in USD, because the price itself doesn’t tell you much. Here I mean dozens of indicators that will tell in which point of market cycle BTC is, and where is it likely moving next.

But why is that?

As BTC can be wrapped in a lot of models, has dozens of indicators and it’s on-chain data is widely used and analyzed, we can more or less value it. What I mean is, alts are much harder to value in terms of USD price, and that’s why it seems wise to not focus on it. Altcoins will always make their moves based on what BTC does. As last cycle showed us very specifically, it’s much better to focus on BTC and on which point of the cycle it currently is, rather than on ALT/USD price.

Is your super-duper changing the world altcoin at ATH in USD but still looking super juicy with some extra potential 20000% gains? If BTC is totally overbought, with Mayer Multiple* close to 4, it doesn’t matter. If BTC corrects, your shit alt will correct even further. — something to keep in mind.

And hey! After the last cycle we also have a lot more data, which will certainly help us find the most optimal entry and exit points. Even simply having more reference points on the chart is helpful.

*http://charts.woobull.com/bitcoin-mayer-multiple/

“It comes and goes in waves” — Lewis Capaldi

As we already know, looking at altcoin prices in relation to BTC price (and BTC “price” itself) is the key. Let’s now take a look at ALTS/BTC price behavior over the last bull run. It looks like all major alts were essentially trading in a few waves.

Yes, I know that this pattern may not be the case ever again, but I think it’s important to study it and look for potential similarities in the upcoming run. Let’s take a look at some of the major alts:

As we can see, all of them had a 3 clear waves (not as clear on ETH chart tho) on /BTC chart. This actually applies to almost every somehow meaningful altcoin on the market, that had the opportunity to be alive before the bull run started.

So there is 1st wave — that starts the parabolic movement, 2nd — that sets the alt USD value at ATH and is a BTC/USD ATH in the same time, and third — dead cat bounce or whatever they call it.

I especially wanted to highlight DOGE and LTC, as those are one of the oldest altcoins on the market, that have been through such bull season 2 times already. I also believe that those alts are great indicators for the whole altcoin market. Three waves both times. Coincidence?

In this bull run, I’m expecting such a pattern to appear again, and I’m looking for at least 2 strong longterm waves.

But even if the whole pattern was to repeat 1:1, I wouldn’t try to trade those waves to USD. After studying it for a while, I came to a conclusion that it doesn’t make much sense. Firstly, altcoin prices may dip just a little in USD, and then continue to go up even while correcting to BTC. Second, timing the wave is nearly impossible.

But what might be a good idea, is converting at least some portion of alts to BTC on the “first wave”. When exactly? Say my alt is rapidly approaching it’s ATH on /BTC with the first wave, and is near top levels from last cycle. USD price is already decent as well, and BTC is certainly getting locally overbought. Converting some alts to BTC might be not so stupid.

And then? If this scenario plays out correctly, you can buy back more of your alts on the wave going down. If not, you still sold some of your alts for BTC at decent prices. Not so bad, huh?

And all if this pattern plays out, of course. And of course, selling should be done gradually.