The savage 2019 rally this year occurred from March to July. BTC went from ~$3,000 to ~$14,000. I have eerie thoughts that not many bought from $3-5k each time thinking BTC was staying in a bear market when in reality it rose 350%+ trough to peak. The move this year in cryptos was about Bitcoin itself and nothing else. Some coins performed decently but you needed to pick the right ones and then also take profits. In the end, the volatility of those coins and greed again reared its ugly head as many missed out on even 100% returns.
Comparing and contrasting the BTC chart and TOTAL2 (total2 is a chart of the altcoin marketplace without factoring BTCs market cap). We see the dichotomy of these two charts in terms of gains. The move up in TOTAL2, in my opinion, can be attributed to the last few influx pumps of coins like ATOM, BNB, EOS, etc. The majority of Coinmarket cap is crap with no real future. Investing in crypto has the hopes of making a lot of money and like most people do with their diets and workouts they try and make it too complicated and fancy. SIMPLE WINS and is why you don't need to get fancy. This marketplace is more about education and understanding and for some reason, we like to THROW our money at hope instead of reality. HOPE = altcoins replacing something Bitcoin does. REALITY = holding quality and the most secure payment platform on earth (Bitcoin).
Why does this happen?
- Comparing ourselves vs Crypto Twitter or public postings thinking they know something we don’t. (a serious LOL to Crypto Twitter, do you think that people that post calls on Twitter all day long really know what they are doing. The best traders and ROI makers are not the ones flexing about gains to try and gain interaction or followers. I’ve still never understood why being an influencer even matters. Aren’t we here to make money for PERSONAL GAIN? Why do you care so much what Joe Blow is up to who most likely can’t make enough money him/herself so they are on social all day long. This take is about 95% of the traders on the platform. There are a handful of good follows I admit but its easier to find crap than it is quality.
- Not understanding to take profits off the table
- Realized gains are so much better than unrealized gains and most people value their worth in unrealized gains. We need to alter this thought process!
The 2016-2017 Market
This market rally was driven by Ethereum and the global ICO frenzy that ripped through retail. For this reason, most of the ERC20 tokens took part in those gains across the broad bull market.
2018 there was a huge promise of the token economy and as it turns out 95%+ of the projects became scams, BTC grabs, etc. Why do I believe they are scams? Well because when you raise money without any real products and any real use cases the musical chairs game of taking BTC or USD off the table becomes a tricky one because no one knew when the music would stop. See Bullet Point #4 again. The only thing project teams cared about is cashing out ETH they raised into fiat.
Should we say many including myself invested in Ponzi schemes?
I firmly believe the business model of the token economy today is no different from a Ponzi. For this reason, you see the collapse of alts in 2019 even with bitcoins savage rally. During the last runs, alts benefited from a rise in BTC. But you can’t keep drawing from the same reasons why we rallied in the past. This is why I have been telling you guys for the past 2 years that it is important to have BTC be 70% of portfolio or more unless you are disciplined enough to completely remove positions. I went from 17 altcoins in a portfolio mix to 0 as 2019s rally showed us that it was about BTC. Did I leave money on the table like most of you, Hell yes I did. Do I wish I could go back, no I actually don't because it was also a hell of a learning lesson for myself that there were too many cooks in my kitchen so when 2019 started, I knew I had to pair things down. I protected capital did I leave THOUSANDS of DOLLARS on the TABLE. Yup. But I review ACTUALITY and that means what is your ROI at the end of the day. Bitcoin Live members who have been here from Q1 and Q2 remember we traded for over 200% in profits during a 4 month period / feel free to verify with my posts and alerts from Q2-Q3 (on just Binance Coin and Cosmos (ATOM) alone.
Bitcoins 2019 run is very similar to its 2013 rally – Only a few months without the involvement of 95% of alts.
I implore you to think about your trading and portfolio as we finish up Q3 this month and move into the last quarter of the year. The logic of each rally changes, and you must be able to adapt to these changes in order to make money. Those who traded the market this year using the mentality of the 16-17 market turned out to be the biggest losers.
At BitcoinLive we were the first platform out there to say look at BTC.D (bitcoin dominance) which I believe still has room for another leg up and remains long.
I post these screenshots because the thought process behind looking at price action and fundamental speculation can tell us a lot. I saw the altcoin market cap at a huge resistance point. The old support alts had turned into resistance and in order to overcome that there would have needed to be another speculative frenzy which in 2019 there wasn't anything left other than owning the most quality which is and always will be BTC.
My thought process remains the same and it is to look at the price of BTC, the overall altcoin market cap using TOTAL2, and Bitcoin Dominance. If we look at that in conjunction with our trading system (the SmartMoney algo for myself and few others) the chart and price action of these show the entire story of Bitcoin and why it remains King.