It was a great day for yesterday, pushing into the resistance zone just beneath $6,000. It’s feeling very bullish!
Two caveats. One is that when it feels maximum bullish, it’s often about to look very bearish. As contrarians will tell you, doing the opposite to everyone else can be smart (buy when there’s blood in the streets — not bubbles in the air…). The second is that when does this, the alts often get hammered — or, at the very least, don’t keep up. That’s sad if you’re an hodler, but the good is, it probably won’t last forever.
vs alts
When goes on a tear like it has this week, alts often drop in terms, even if they still stay level in USD. That’s because traders sell alts in order to hold , which is rising in value.
When stops rising, there’s a good chance that value will come back into the alts — traders will pick up coins they feel are undervalued. BUT that only happens if the market is expecting to plateau for a while, and traders are looking for value elsewhere. If they think it’s just a short pause before rises again, then the chances are the alts will stay down.
A situation to watch is when alts rise in terms and rises against the US dollar. That gives you leveraged gains on the alts, and it means that money is flooding into the crypto space as a whole — not just . That’s a very positive sign overall. It means that alts are being bought with , but even more is being bought from new demand. (Some coins are more likely to do this; LTC, for example, often moves in step with , without a lag.)
You can generally gain a sense of what’s going on by comparing coins on . Just look at which coins are in the green and have gained more than .
Watch profit-takers
One word of warning. When rises, traders buy — with fiat or by selling alts. But not all alts are the same. Smaller alts get hit worse, while high-quality ones tend to drop less. Traders keep these, knowing that money will come back into them sooner rather than later. However, there are certain times when a coin will take a worse hit than others its size. Take a look at BAT, for example. On Friday, it was one of the only in the top 50 to be in the red. The reason? Probably simply that it had enjoyed a huge rise in the preceding months, and was a good target for profit-taking.
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Published at Sat, 04 May 2019 12:00:25 +0000
