Are you ready for the Altseason frenzy?
Buckle up because the party has only just begun.
Let's dive into where we stand in the market cycle and what lies ahead. . .
In this thread we will cover:
• Market cycle stages
• BTC dominance
• ETH/BTC
• Stablecoin inflows
• DeFi TVL
• Retail interest
• Final thoughts
Make sure you bookmark this thread for future reference and smash that like button. . .
- Market Cycle -
“History doesn't repeat itself, but it often rhymes”
Looking back on prior cycles will give us an idea of what comes next.
It's never guaranteed to play out exactly the same, but it allows us to understand capital rotation.
We are currently in Phase 1- Bitcoin. . .
This is the early stage of the bull market where all the liquidity is getting drawn to the 'safest' asset- BTC.
In a volatile asset class, BTC generally has the lowest downside risk.
Add in the likely ETF approval and the halving and you have the recipe for a huge pump. . .
- BTC Dominance -
We can measure and visualise this capital rotation cycle by looking at the BTC dominance chart.
BTC.D has been in a strong uptrend since Sep 2022. Forming a series of HH + HL's. Indicative of a bullish trend.
Current levels are 55% and a new multi-year high. . .
The next levels to watch are around 58-60%, as this range has previously acted as areas of support and resistance.
Eventually, BTC.D will reach its peak of the cycle and start moving back down.
Capital will rotate to ETH → Large Caps → Altcoins as risk appetite increases. . .
- ETH / BTC -
Another important chart to look at is ETH/BTC.
ETH has been underperforming BTC since Dec 2021. Shown by the downtrend and a series of LL + LHs.
Phase 2 of the market cycle begins when ETH/BTC bottoms and starts trending back up. .
The crypto market is very cyclical. . .
- Stablecoin inflows -
Since 2022, stablecoin m'cap has been on a strong downtrend. Which is consistent with a bear market as capital exits the space.
However, we may be seeing signs of a bottom forming.
• Oct '23 = $124b
• Dec '23 = $129b (+5%)
Bull market = stable inflows. . .
- DeFi TVL -
TVL is often a seen as a lagging indicator. However, it is still useful to examine and understand the overall trend.
Since June '22, TVL has been trending in a range.
However, since October, we have seen a nice uptrend.
• Oct '23 = $36
• Dec '23 = $50b (+39%)
- Retail Interest -
Once your family and friends start asking if they should buy crypto, that is usually a pretty good sign we are at peak euphoria.
Google search peaked in May '21, just after BTC hit $64k.
At the moment, retail interest is still very low (score 19% and 23%). . .
- Final Thoughts -
It's easy to get caught up in the recent market pumps and think... shit I have completely missed the boat here.
The FOMO grows inside you and despair creeps in as you feel like you are one step behind the market.
Hit pause, zoom out and look at the data. . .
We are only in the first phase of the Bull market (Bitcoin season).
Don't panic, there is still time before full-blown alt-season kicks in.
But this is absolutely NOT the time to tune out.
It's time to pay attention and double down on your research, systems and processes. . .
Let's work hard now, and in a few years, I have complete confidence that the market will reward us with gains beyond our wildest dreams.
This is our chance to break
the shackles and achieve true financial freedom.
I'm excited for the journey ahead with you legends! . .