Altcoins Bleed After Tesla Bitcoin Buy, BTC Dominance Hints At Deception

Tony "The Bull" Severino

4 years ago

3 mins read

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Over the weekend, altcoins began to pull back after an enormous market-wide rally, starting with Ethereum. And while the market looked to be turning bearish, news of a massive Bitcoin buy made by auto manufacturer Tesla set the crypto market on fire.

On Bitcoin pairs, altcoins began to hemorrhage across the board. But according to a certain technical indicator and BTC dominance, the price action could be nothing more than a short-lived shakeout before the full alt season begins.

Tesla Buys Bitcoin, Crypto Fever Boils Over

As if the magma-hot crypto market needed another reason for coins to be trending, an SEC-filing revealed that Tesla had purchased $1.5 billion worth of BTC.

The buy itself was made some time prior, but news of it caused a wave of FOMO and prices began to rocket. Exchanges like Binance went down due to the sheer demand of investors looking to buy Bitcoin.

Not only are they looking to buy more BTC in hopes of capitalizing of further upside, but given the nod of support from the likes of Elon Musk, crypto investors have even been dumping altcoins in exchange for more Bitcoin.

But according to the Ichimoku Kinko Hyo technical indicator and BTC dominance, looks can be deceiving.

News Leaves Altcoins Battered, But BTC Dominance Suggests It’s A Shakeout

BTC dominance is a metric that weighs the giant market share Bitcoin commands against the rest of the space. The top cryptocurrency has long enjoyed two-thirds or more dominance, but is at risk of losing it for good.

After another attempt to set new highs in dominance, BTC simmered down and fell back to under 63% as Ethereum broke its former record, and other alts soared.

BTC.D is being rejected by the Ichimoku cloud on weekly timeframes | Source: CRYPTOCAP-BTC.D on TradingView.com

And while it seems as though dominance is ready to reverse once again, the Ichimoku suggests this is bearish retest in progress. In the chart above, the green candle is back trying to break into the cloud on weekly timeframes. Three failed weeks have left wicks into the cloud, but further upside in dominance hasn’t materialized.

After repeated rejections, the most likely scenario is down for BTC dominance. And if this happens, the recent altcoin rallies were barely the start of what’s to come for upside.

On higher, monthly timeframes, the story told is similar. A massive green candle was entirely engulfed by bears, meaning altcoins have finally turned the corner against Bitcoin.

Even more bearish signals exist on monthly timeframes | Source: CRYPTOCAP-BTC.D on TradingView.com

Price action on monthly BTC.D charts show that a red candle is barely hanging onto the baseline on the Ichimoku also. A close below it, suggests further downside.

A plummet deep below 63% is likely if the support turned resistance continues to reject BTC.D. Could the greatest alt season on record be just days away? Adding more credence to the theory, recently, Google searches for “buy crypto” began to outpace “buy Bitcoin” for the first time.

Featured image from Deposit Photos, Charts from TradingView.com

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.

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