Why The Bull Run Is Not Over

Many people in the past weeks have been expressing concerns and started believing that the bull run was over. Of course, recent events in the Middle East, particularly the attack by Iran and the retaliation of Israel, have raised concerns that we might be heading towards an all-out war in the region, which could potentially escalate into a world war. However, it seems that tensions have eased since then, with both sides showing intentions to de-escalate and avoid another war, at least for the time being. Nonetheless, anything can happen at any point. Now, let's shift our focus to crypto.

I'm confident that the bull run is not over, and let me explain why, along with providing some historical perspective. As you all know, before a bull market, BTC dominance tends to rise. When the bull run begins, BTC dominance continues to increase. This is because the majority of the money flowing into the market is primarily used to buy BTC. Yes, altcoins also rise, but BTC tends to outperform the rest of the market, excluding some particularly strong altcoins.

As depicted in the following chart, this trend has been evident since November 2022, when BTC dominance reached its lowest point. After that, the dominance began to rally and has continued to do so until now. Additionally, we have broken through the dominance resistance, which was a contributing factor to the significant correction in altcoins over the past few weeks, as those selling were doing so to buy BTC.

As you can also see in the next chart, a similar pattern occurred in the previous cycle as well. After the end of the 2017 bull market, BTC dominance hit its lowest point and began to rise until it reached its peak in January 2021. This period also coincided with the last major drop in altcoins during the previous bull run. BTC corrected by 35% in USDT pairs, marking the last significant opportunity to buy before the next upward trend.

Now, let's examine where BTC stood at the peak of the previous cycle in terms of price and what occurred after the dominance broke down. While the dominance was rising, BTC experienced a 1200% increase to the upside. After the dominance broke down, it underwent a 65% upward move. Of course, it's much easier to make a move from $3000 to $40,000 than from $40,000 to $69,000.

Indeed, the real winners are the altcoins when the dominance breaks down, as money begins to flow into them. This is when life-changing profits start to materialize.

The point I'm making in this post is that we've never concluded a bull run without BTC dominance breaking down and the total market capitalization reaching new all-time highs. While the subsequent high might not always surpass the previous one by a significant margin, the influx of more money signals the potential for achieving higher highs.

Posted Using InLeo Alpha