During the period when Bitcoin started to rise sharply and altcoins began to decline, eyes always turn to the Bitcoin dominance chart, as this chart serves as an indicator that shows the transition of money in altcoins to either Bitcoin or other altcoins. According to this chart, we have reached a very strong resistance, and the general belief was that if this resistance is broken, the decline in altcoins may continue.
Tonight, with the Bitcoin dominance chart being rejected at the resistance, there was an influx of money into altcoins. At this point, for users who trade by following Bitcoin dominance and have existing altcoin positions, 46.7 could be the first profit-taking level and 44.8 the second profit-taking level.
Especially during Bitcoin rallies, dominance corrections provide good trading opportunities for altcoins, so I will reduce my altcoin positions when the dominance chart reaches support and monitor new entry levels for my altcoin trades.
In addition to the dominance chart, for those following the current Bitcoin analysis, as long as we don’t drop below $29,800, I see a chart that is eager to rise. The resistance level where we will face selling pressure is in the $31,600-$32,300 range. If we reach those levels, I plan to significantly reduce my upward positions in the market.
Predicting how far the rise in Bitcoin and altcoins will go is challenging, as we have been in a bear market for a long time, and I cannot say that we have experienced a clear bull rally. However, if there is a significant influx of new users into the sector, these movements could give way to a rally.
Therefore, I don’t think it’s right to chase a short position by setting a peak in the market or to persistently expect a decline. I will continue to look upward as far as the rise goes (until a sharp and voluminous decline candle occurs) by reducing risk at significant resistance levels and taking reasonable risks at support levels.
The market has shown significant growth in recent days, so I recommend not keeping your current position size too large, considering the possibility of a correction that could come at any moment.