So Bitcoin crashed 20 or so percent yesterday and people are freaking. Some are even calling for a bear market. First of all, I would say: lengthening cycles. There's no reason there should be an EOY market top, because there's no 4 year cycle to begin with. Not a popular opinion, but lengthening cycles is the most coherent theory to explain Bitcoin's price action when you look at the data as a whole. It's not guaranteed, but in my mind it's the most likely outcome to play out.
Now this isn't another preach on lengthening cycles, because there's something else that indicates that the bullmarket is still on.
The chart above describes altcoin dominance in percentage terms, which is basically Bitcoin dominance inverted (100-BTC.D in Tradingview). Why I'm looking at altcoin dominance, is that during bull markets altcoins gain bigger chunk of the cryptocurrency market, whereas in bear market Bitcoin gains a bigger part. Usually when there's a big correction with Bitcoin, alts drop even more when people shift back into Bitcoin because it's the least risky asset.
With yesterday's crash, the opposite happened: There was a bullback, yet altcoin dominance went up big time as you can see on the chart.
Ethereum going up against Bitcoin in a bear market? I don't think so.
If you go to Coingecko or Coinmarketcap and change crypto prices to show in BTC, you'll see lots of green in the percentage change tabs.
So just relax. The crash was probably just whales shaking out weak hands and over-leveraged traders who fell for the EOY parabolic run trap. They know how to play the game.
One more thing that I think is interesting and good to understand.
The nature of this bullmarket has been much different from the previous cycles. We've basically went sideways the whole time except in late 2020 when we went from the sideways channel to another sideways channel that we've been in the whole 2021. Much different from 2017 that was a steady ascending parabolic rally to ATH. There's actually an argument to be made that this a stretched out version of 2013 which had a local top before reaching the final one later.
Anyway, I wouldn't freak out if we retested 42k or even 30k support once more before starting the final leg of the bullrun and breaking up from the sideways channel. There's no reason to expect 2017 to happen again especially when the current bullmarket has been completely different animal compared to it.
Lots of traders got rekt now by taking too much leverage with the belief that we're just going up, because it's December, but it doesn't take a genius to zoom out a little and realize that there's a good chance it won't happen this time. We could get a small Christmas rally, but I think it's almost certain that 100k at the end of year is not gonna happen.
