Investment idea: Bitcoin dominance and Altcoin growth

A trader talks about trading strategy in the face of Bitcoin's changing market share

Professional crypto trader on TradingView (CryptoStudentBlog) about trading strategy in the conditions of changing market share of the first cryptocurrency

I would like to give my thoughts on the cryptocurrency market, where Bitcoin and the rest of the altcoins may go in August, based on the chart of Bitcoin (BTC), Ethereum (ETH), and the Bitcoin Dominance Index (BTC.d).

btc-trading

Let's start traditionally with Bitcoin (see chart), now drawing a falling wedge with convergence formation* on major hourly TFs. The current situation is strongly reminiscent of February this year when the price went to 21500$. By applying a fractal** we get an identical pattern of correction, only on the current bitcoin chart.

Convergence (from Latin Converge - converge) is a divergence of price and indicator (for example, RSI), when the asset continues to fall and reaches a new minimum, and the indicator begins to grow.

Fractal is copying the candlestick pattern of an asset in the past and overlaying it on the current chart. It is a kind of predicting the price of an asset in the future using its past movement. Cycles in the market repeat themselves but can be interpreted differently based on the current situation.

The key zone at the moment will be the level of $28 thousand. It was also the resistance zone in the past when the price fell to the area of $25 thousand at the end of May. For buying zones, I would consider the area up to $27.7 th. and even lower, in case of false moves beyond the level.

Resistance and working out of the falling wedge in the area of $31-32 thousand, there is a local resistance and a strong level. I think that we may see a move to these zones if the lower boundary of support at $27,700 - $28,200 is held.

It should be noted that the levels of $28 thousand and $32 thousand are the trading zone of May 2022, respectively, this is a historically important zone if it is broken in either direction, there will be a strong movement in the market.

Let's move on to the dominance, what will happen to it, when Bitcoin goes up, and where altcoins can potentially go.

On the daily chart, bitcoin dominance is breaking through local support and retesting the 50% zone. With further declines, I expect to see the 48.5% area - the global support zone and historical zone passes there.

It is important to note that with a sharp move of Bitcoin, the dominance can go up. The main thing in such a scenario is not to go back above 51% - this is the area of the past decline and growth of altcoins.

If you go below 48%, you can expect a good rise in altcoins, but be careful and do not have high hopes for rapid growth, as was the case in 2017 and 2021. Now there are many more active projects, and, accordingly, the capitalization will be divided into all their coins.

I recommend taking a closer look at altcoins after Bitcoin fixes back above $29.2k and the breakdown of the descending wedge. At the moment, only bitcoin can predominantly grow, when the first cryptocurrency is flat, altcoins will follow.

It will be necessary to close most of the coins when the dominance approaches the 48.5% mark, as a rebound from the global trendline is possible, but at its breakdown, it will be possible to refill positions and look for new entry points.