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I am Yudong
After reaching a peak, Bitcoin's pullback unfolded as expected. It still follows historical patterns. Last time, there was a pullback after a continuous rise of 22 days, whereas this time it entered the adjustment phase after just 21 days of increase. In the previous round, Bitcoin pulled back from a high of $45,000 to $30,000, with a pullback period of about 20 days to one month, before launching again!
1. Scissor effect: Opportunities in Ethereum and altcoins
When Bitcoin enters the pullback period, Ethereum and altcoins begin to take over, forming a 'scissor effect':
BTC.D (Bitcoin Dominance) quickly declines: Data shows that when Bitcoin dominance falls by 2-3 percentage points, it often indicates a short-term explosive opportunity for altcoins.
Ethereum's breakout point: Historical data shows that during Bitcoin's pullback, Ethereum's average increase can reach 15%-20%, while some quality altcoins have even more significant gains.
At this stage, market funds overflow from Bitcoin to Ethereum and altcoins, which will drive them to rise rapidly!
2. Bitcoin rebound and altcoin acceleration
During Bitcoin's pullback, some investors, swayed by doubt, shifted funds from Bitcoin to faster-rising altcoins. Historical data shows:
After Bitcoin's pullback, the rebound typically ranges from 10%-15%, but during the same period, some popular altcoins can rise by 50%-200%.
The explosive growth of altcoins often concentrates during the phase of capital rotation, especially undervalued projects with good fundamentals are more likely to attract funds.
For example, in the mid-term of the 2021 bull market, during Bitcoin's pullback, public chain projects like SOL and AVAX rose by 150% and 120%, respectively.
3. Operation strategy: Pick up quality altcoins
During the current pullback phase, focus on altcoins that have not yet started or have good fundamentals, following these ideas:
1) Choose undervalued altcoins: Prioritize projects that have not seen significant price increases in the market, especially secondary tokens within mainstream blockchain ecosystems;
2) Fundamental support: Projects with practical applications and active developers tend to be more resilient and can easily attract capital attention;
3) Observe capital flow: Analyze on-chain data to identify projects with significant capital inflows, following mainstream market trends.
The pullback of Bitcoin is not frightening; it often indicates the beginning of capital flow and market rotation. At this stage, opportunities in Ethereum and quality altcoins are significant. Investors should seize this point of capital transfer, focus on undervalued projects, while remaining alert to market risks.