Bitcoin Dominance

Hey everyone, and thanks for jumping back into the cryptoverse. Today we're going to talk about Bitcoin dominance. If you guys like the content, make sure you subscribe to the channel, give the video a thumbs up, and also check out the sale on Into the Cryptoverse Premium at intothecryptoverse.com. Let's go ahead and jump in.

So, while Bitcoin dominance has actually not yet put in a new cycle high, although I think it probably will, there has been something that has happened. Now, this is a process. It was sort of like an intricate process that we described. There's a lot of nuances to this, and I kind of want to explain what I think is currently happening.

So, you have Bitcoin dominance that just went back up to about 64.6%. Uh, remember the cycle high at this point is around 65.3, 65.38, something like that. But the thing that's happened that's noticeable, that's a new thing for the cycle, is that all Bitcoin pairs put in yet another lower low, right? Surprise, surprise.

Now, this is something that we've talked a lot about. And what I mean by that is, you know, how are all Bitcoin pairs putting in new lows, but Bitcoin dominance is not yet putting in a new high? Well, there's a couple of reasons for that, right? A couple of reasons. Um, but the main reason is ETH Bitcoin, right? If you look at the ETH Bitcoin pair, it's a lot higher than it was back over here in April, in early April. And so this is, I mean, this is basically what we talked about, the idea that whenever ETH Bitcoin pulls back from this rally, right? Whenever it gets a pullback, whether it is a higher low or a double bottom, right? best-case scenario, a higher low or a double bottom, then the alt market, the altcoin market would then likely put in a lower low, right? Because ETH Bitcoin was way up here, but while ETH Bitcoin was way up there, you had all Bitcoin pairs already knocking on the door.

Now, let's not lose sight of this because you'll probably see all Bitcoin pairs uh bounce around, right? I mean, like nothing just goes straight down. But this is something that we've talked about for a while. The idea that we would see all Bitcoin pairs sort of bleed into June, right? Bleed into June. And the idea, I think what we're witnessing here is essentially a more volatile version of last year, right? That's I think that's kind of what's happening. Um, you basically have a high that all Bitcoin pairs came up to in December of 2023 and it then swept that same level in December of 2024 and then a lower high in January, a lower high in January, and then a lower high in March/April. Same thing, right? We're seeing the same process play out. And then last year we saw all Bitcoin pairs hit this low in about mid-June.

So, we've talked a lot about this, the idea that all Bitcoin pairs could very well hit around .32 uh by June. Now, right now, they're at .33. Uh, it's the last day of May, right? It's May 31st. And seems likely, I mean, obviously, nothing's a guarantee, but it seems there's a decent chance here that we'll see all Bitcoin pairs go back down here once again.

Now, just a few weeks ago, when all Bitcoin pairs were rallying and your favorite influencers were calling for alt season for the 900th time, it was back when they were just simply back-testing their bull market support band. Now, one of the interesting things about this is if you look at what all Bitcoin pairs do when they sweep a low, they often will get a bounce, right? This happens over and over and over again. And then this time was of course no different, right? I mean, so my guess, my guess is that you're kind of seeing the same thing play out, right? You sort of sweep a low and you bounce. Um, and we sort of saw that right here and maybe, maybe we'll see that again in June. Again, last year we saw a low, sort of a local low sometime in June, right? Sometime in June.

Um, but regardless, regardless, one of the things I want to mention is that you could see all Bitcoin pairs go lower in November. Okay? So, look at last year. There was a low in June and then they kind of just stalled out for the summer and then you had a lower low sort of late October, early November. So, I'm thinking that that could certainly play out where you see all Bitcoin pairs, you know, potentially at .3 by November, if not sooner.

And one of the things that I go back and forth on is like, you know, this trend line, it's been pretty reliable, right? Like, anytime all Bitcoin pairs hit this trend line, we've seen them bounce. Um, but just know that at the end of the day, I would argue that my base case would be that eventually they go to the range lows, right? Like that's going to be my base case. Now, preferably, I would hope it would just happen now. A lot of people don't like that, right? A lot of people don't like that. And one of the reasons they don't like it is because they're still clinging to the idea of that short-term alt season.

But one of the things you have to remember is that a lot of people didn't really want to see ETH do the same thing. Look at the ETH Bitcoin market cap ratio. Look at the ETH Bitcoin market cap ratio. You see this ratio here, how it, anytime it comes up to the highs and then goes back down to the lows, right? You see that? So what I'm suggesting here is if ETH Bitcoin market cap ratio repeats what it did last cycle, you know, low or big rally up to the 20, we estimate 21 EMA and then maybe a pullback. That pullback, while it could still be a double bottom or a higher low for ETH Bitcoin, it would be a lower low for all Bitcoin pairs.

Now remember, ETH went home. ETH dominance went home, right? ETH dominance. If you look at ETH dominance, it basically went to where it was last cycle, right? It went all the way back down here. The thing that I think still needs to occur, and look, it's a long process, right? But I mean, a lot of people have doubted the process, but just because it's taking longer than you or I want doesn't mean it's not going to happen, right? You know, that's that's the hard part, I think, for a lot of people to sort of accept. And so, I think that the most likely outcome by far is for all Bitcoin pairs to come down here.

So, I don't know, right? I don't know if they're just going to find support at .32 and then bounce around for the summer and then go lower later on. What I will say is if you look at the current valuations of all Bitcoin pairs right now, they're at the same level they were at in the summer of 2019, and it was in the summer of 2019, September, uh that the Fed decided to end quantitative tightening. So yeah, it's always possible that all Bitcoin pairs find support on this trend line. Maybe they will. What I'm saying is that in order to get what you want, you have to go where you don't want to go. You guys remember I said the same thing about Ethereum going home, right? In order to get E, in order to get a big bounce by ETH Bitcoin, what had to happen? ETH had to go home, right? So ETH had to go where the ETH maxis didn't want it to go in order for ETH to get a bounce on its Bitcoin pair. And sure enough, that's what happened, right? Like look at ETHUSD and overlay it with ETH Bitcoin. And this bounce right here occurred after ETH went home. That doesn't mean that ETHUSD can't go lower. It's always, there's always a chance that it could.

Um, but it's one of those things that if you truly wanted what all the influencers keep claiming is going to happen, right? They keep calling for alt season. But the problem is that all the alt seasons that have always been called for for the last four years have been premature. And the reason for that is because, as I said earlier, all Bitcoin pairs have not gone to the range lows. And I don't care how great you think your altcoin community is. I don't care if your developers that you follow have not yet rugged you. Altcoins, in my opinion, are oscillators at best against Bitcoin. And many of them just bleed to Bitcoin. So if individually altcoins will bleed to Bitcoin, then collectively they should as well. And that's the reason why I think all Bitcoin pairs will eventually find themselves down here. I think it's just a matter of time. It's a matter of time. I don't know exactly when it's going to occur, but it's one of those things where like I didn't know when ETH would go home, but I thought it would happen. Uh, I didn't know for sure when Bitcoin dominance would break above 60%, but I thought it would happen. I don't know exactly when all Bitcoin pairs are going to go to the range lows, right? I can't tell you that. But what I can say is what you're witnessing is basically the slow sort of conversion of of people holding alts and then they're just converting their Bitcoin. You're witnessing it, right? You're witnessing like this is the slow recognition of people that, hey, what if alt season end isn't about to happen? It's been this, and you might say, well, that means it's about to. Look, guys, this process has been going on since mid-2023, right? The slow bleed. It was a quicker, quicker bleed before that, but the slow bleed really started at about mid-2023. And this is basically what you're witnessing. You're basically witnessing people just the continued hope for an alt season and then more and more people are just simply throwing in the towel.

Now, you might claim something different is happening, but I don't care what you claim, right? The chart tells you what's happening, right? Alts put in a new low against Bitcoin today. Today. So, any prior alt season that was called for, any prior call for a low by all Bitcoin pairs up until today was wrong. And the reason it was wrong, in my opinion, because altcoins are oscillators at best against Bitcoin, has nothing to do with monetary policy. You know, it might come as a surprise I've said monetary policy is a good convenient narrative. But listen, regardless of monetary policy, altcoins are oscillators at best against Bitcoin. Monetary policy though is a convenient narrative because you can see last cycle that when QT ended, that's when altcoins found this low against Bitcoin and then all prior, all subsequent lows after that were fairly short-lived. QT has not yet ended this cycle. So, it's just been really easy to stay bearish on all Bitcoin pairs because it just seems like the most likely outcome, right? It seems like the most likely outcome already regardless of monetary policy, and then you just throw in monetary policy and it just seems like, hey, this is the, this is in fact, uh, the most, you know, the most likely outcome. So that's my base case here. If you look at others Bitcoin, you can see it also just put in a new low. Uh, so again, it just goes to show why the altcoin market has and continues to not be a great investment, at least when looking on its Bitcoin pair. As always, I'm not talking about your altcoin. I'm sure your altcoin is doing just fine. There are always exceptions to the rule, but collectively the altcoin market will likely continue to bleed against Bitcoin.

Um, and I don't really think it's going to change until all Bitcoin pairs, at the very least, go to the range lows. And that's ultimately why Bitcoin dominance is so important, right? I mean, this is why it's so important. It's back to 64.3%. And, you know, it could do what it did last summer, right? Like where it, it kind of just bounces around for a while, like it doesn't really go anywhere, but maybe it just kind of bounces around in this range for a few months and then it breaks higher in like August. You know, I could see something like that happening as well. Um, so just be aware that, you know, this process will likely continue. Sort of a slow grind by Bitcoin dominance to the upside. Uh, you might have, you know, a few red weeks here and there, but it likely will continue to break to the upside as as people make those conversions from altcoin to Bitcoin.

Remember, Bitcoin leads during stricter monetary policy conditions, right? During tighter conditions, during quantitative tightening, and and especially when the Fed funds rate is greater than our star, the neutral rate, which is where I think we currently are, I think you likely will see Bitcoin dominance just slowly trend higher. And you know, sometimes people ask me, well, how come you never post about Bitcoin dominance when it's going down? I feel like I do. I mean, I've, I've made several, the defensive videos on my view uh when Bitcoin dominance has gone down. But if you look at monthly hyanashi candles for Bitcoin dominance, you know, I think the argument is like, well, when has it really gone down in the last few years, right? There was one weekly close or one monthly close, one month where the red hikashi candle occurred, and that was actually after Bitcoin dominance went to 60%. Which was the conservative target that a lot of people said would never even happen. This trend has and continues to be a dangerous thing to try to call a top on. It's tempting, right? It's the cool and contrarian thing to do uh to call for to call for the alt season, but really I, I think if people are being honest with themselves, the contrarian view always, you know, all along was just to stay bullish on Bitcoin dominance. It's easy to pretend like the contrarian view is to call for alt season. But, you know, when every influencer essentially is calling for alt season every other week, that's not the contrarian view, right? The contrarian view is just to remain bullish on the trend. And and and I know that sounds crazy, but it kind of, it it sort of emphasizes what I've said many, many times is that a lot of times when you know when something's doing well, people will sell that thing in hopes that something else will do well.

So basically the idea is people keep fading Bitcoin dominance because they keep thinking it's going to start doing badly because it's been doing well for so long, right? They keep thinking it's going to crash because it keeps doing well. And so they trade their Bitcoin for alts and then the altcoins keep on bleeding and Bitcoin dominance just keeps going higher. It's the classic example. And you know, I, I think this market cycle has done a great job in in in sort of teaching just good investment principles, right? It's better to just stick with an asset over a long period of time that you think will actually stand the test of time rather than just continue to throw money into a lot of random micro caps in the hopes that you'll you'll hit it big. Because I mean a lot of people will sort of flaunt gains in the altcoin market, but I think a lot of people are actually losing money in all, especially when viewed on on their Satoshi valuation.

So, Bitcoin dominance likely going to continue to go higher. Don't be surprised if it chops around, right? I'm not saying it can't do that, but it should continue to go higher and we should still see those altcoins continue their bleed against Bitcoin. If you guys like the content, make sure you subscribe to the channel, give the video a thumbs up, and also check out the sale on Into the Cryptoverse Premium at intothecryptoverse.com. I'll see you guys next time. Bye.