- There are two reasons why you should be focusing on the BTC value of your alts right now
- The first is to do with spotting where to take profit and the second is to do with the stage of the market cycle
- Many alts are at USD all time highs but still low down in their Bitcoin pairing
Yesterday we covered a key reason why you should be paying attention to the BTC value of your alts rather than concentrating on the dollar value. There isn’t just one good reason why you should be doing this however, and today we’ll cover a second which concerns itself with the current stage of the market cycle.
Stacking Bitcoin Is the Aim of the Game
The first reason why you should be comparing your alts to their BTC value rather than their fiat value has to do with spotting where they will be likely to top out, while the second reason is related to where we are in the crypto market cycle and where we are headed next. There is a typical flow to a crypto market cycle which we covered in a previous post, and right now we are at the stage when you should be using alts to accumulate as much bitcoin as possible. This is because, following its mammoth run from $10,000 to $60,000, Bitcoin is going through a reaccumulation process ahead of a likely further push towards $100,000 later in the year.
Clearly then you want to have as much bitcoin stacked up in time for this run, which is why you should be focusing on how your alts are likely to perform against bitcoin rather than against the dollar.
Below are two alts that have both soared to all time highs in their dollar pairing recently:
The idea of buying a coin at all time high is something that fills many traders with dread, but in a bull market, as we have seen with a huge number of alts this cycle, all time highs can mean nothing – they can carry on pumping way past their all time high, as was the case with TEL.
So if there is a chance that both these alts could continue pumping past their all time highs, and we know we want to be accumulating as much bitcoin as possible in anticipation of an alt-killing bitcoin rally, what should we be looking for?
Bitcoin Comparative Charts Hold the Key
The answer is the Bitcoin comparative chart, and its importance it can be clearly identified if we look at not the LTC/USDT and TEL/USDT charts but the LTC/BTC and TEL/BTC charts:
The difference couldn’t be starker. In the space of one week TEL has undone over three years of downtrend on both its USDT and BTC chart, whereas LTC is still underperforming against bitcoin despite also reaching all time highs. If we are in the game of trying to accumulate bitcoin through alts it is clear then which coin we should be focusing on – LTC has barely got started against bitcoin whereas TEL almost reached parity. Even if it does have more room to run, TEL has already gone almost 10x against Bitcoin whereas LTC is 80% down from its Bitcoin comparative high.
Look For Alts With USDT Strength and Potential BTC Growth
If we’re in the business of bitcoin accumulation then, we want to be owning the alts that have shown strength on their USDT pair but have yet to get going on their BTC pair. By holding these alts as they rally against Bitcoin we can be sure to capture the trades that return us as much bitcoin as we can before the next Bitcoin rally. Another great example is BZRX:
BZRX looks similar to TEL in many ways, and a show of strength to take it past resistance at 2000 sats will offer an incredible return against BTC, just what we’re looking for.
The only time you should switch to focusing on the USDT value is when Bitcoin has topped out completely as in January 2018. In those instances you want to be looking to sell into a stablecoin rather than bitcoin which will be dropping in fiat value, as will alts once they top out.
Good luck, and happy hunting!