- Many alts are hitting consecutive all time highs in their fiat value
- This makes it hard to know when to sell
- This guide explains why you should be using the BTC pair rather than the fiat pair
As many readers have hopefully experienced, alts are enjoying a great run, with many hitting all-time highs in their fiat currency value. On the downside we know that the crash is coming, we just don’t know when. Many alts are simply going higher into fresh air with no support and resistance levels against which to set our sells, making it hard to know when to take profits. There are tools that can be used, such as Fibonacci extensions, but these aren’t as accurate as using existing support and resistance levels, which are, handily, available in most instances on the Bitcoin comparison chart. This guide explains why now is the time to temporarily switch your mentality from the fiat value of your alts to the BTC value.
Alts Still Down in BTC Terms
Despite seeing record highs in their USD valuations, most alts are still sitting low in the water compared to Bitcoin. This is because Bitcoin’s epic run at the end of last year crushed alts in their BTC valuation, giving us lots of support and resistance levels on the way down, levels we can use to sell alts on the way back up. This is far easier than guessing where your alt might top out in fiat terms.
Let’s take the case of Ethereum, which has been outperforming Bitcoin in recent weeks as it guns towards $4,000. If we look at the USD chart, it’s pretty clear that working out where to set our sells to maximize profits is far from an easy task:
Would you have known to sell at $3,562? Probably not. Now let’s compare it to the ETH/BTC chart:
This chart is clearly showing that despite ETH being in an uptrend against BTC it still has some room to run, especially with Bitcoin dominance still falling. We can clearly see that ETH doesn’t face much resistance until the 0.07 region – a fair easier area of resistance to determine that using extension tools on the dollar chart.
Almost all other alts are in the same boat, so next time you’re considering where to sell your booming alt check out its BTC chart and take your readings from there. There is another key reason why you should be using the BTC pairing as this point in the cycle which we will go over tomorrow, so keep an eye out for part two of this important lesson!