If you are aware of how to trade about cryptos, let’s share some tricks for you.

The key to success in cryptocurrency is having a robust trading strategy. This is some ETH ing that the average crypto holder doesn’t have hence why many of them end up in the red. At one extreme you have day traders, who think that a bull flag on the 15-minute chart means we’re headed to the moon. At the other extreme, you have hardcore hodlers, who have no idea what a bull flag even is. As a result, most traders end up getting wrecked because they’re trading too much, and most holders end up getting wrecked because they have no idea when to sell.

Now I’ve spent a lot of time at both ends of this spectrum, and after years of learning from my mistakes, I’ve managed to put together a crypto trading strategy that works well for me. So, today I’m going to tell you all about my personal crypto trading strategy including when I buy when I sell, and how I choose the cryptocurrencies I trade.

Bitcoin-Altcoin Cycle

The backbone of my personal crypto trading strategy is Bitcoin. This is simply because BTC’s price has a huge influence over the price of other cryptocurrencies.

At any given point in time, BTC’s price is doing one of three things. Going up, going down, or staying relatively stable or at least as stable as a cryptocurrency can be.

When BTC’s price is increasing gradually, it typically carries altcoins along with it especially larger altcoins like Ethereum and Cardano. However, if BTC’s price is pumping hard it tends to leave altcoins in the dust. This is primarily because BTC is seen as a safe investment. If BTC is pumping people tend to take altcoin profits and move them into BTC for a safer trip to the moon.

When BTC’s price is going down gradually it tends to pull down the larger altcoins with it though some smaller ones can continue to perform well. if BTC’s price is crashing hard then obviously everything else goes down with it.

This is for the same reason as before if the crypto market is crashing BTC is a good place to be, and this leads to lots of aggressive altcoin sell-offs as thousands of traders cling to the Bitcoin life raft.

Naturally, this movement of money between altcoins and Bitcoin is somewhat cyclical and one of the indicators I use to figure out where we are in this cycle is Bitcoin dominance.

Bitcoin dominance is a measure of how much of the total crypto market cap is just BTC. If Bitcoin dominance is going up this means money is moving from altcoins into BTC. If Bitcoin dominance is going down this means money is moving from BTC into altcoins. So, once I’ve assessed Bitcoin dominance I need to confirm that the market is headed in the direction that I think it is, and I use the total cryptocurrency market cap for that confirmation.

If for example Bitcoin dominance is going down, but the total market cap is also going down, I typically stay away from trading along with ETH er since it suggests we’re on the brink of a dip.

Alternatively, if Bitcoin dominance is going down but the total market cap is going up then this means altcoin season has begun.

As you can see here Bitcoin dominance is pretty damn low yet the total crypto market cap keeps going up. When we get to these kinds of levels it suggests that we’re entering the peak of a bull market cycle. Now I actually think that we might see the top in mid to late September.

Bitcoin Strategy

Once I’ve established where we are in terms of the altcoin Bitcoin cycle, the next thing I do is estimate how long this stage of the cycle could last. This is where the technical analysis starts to come in.

As I mentioned in the third installment of my technical analysis tutorials, analyzing time frames shorter than a day can create a lot of noise in the price charts, and you’ll often lose some much-needed context. This is why I always stick to longer time frames, and if I’m looking to buy or sell BTC I start with the monthly and the weekly. Read More…