A closely-followed crypto analyst and trader says he’s looking at a widely-used indicator that he believes can help time the top of the crypto bull market.
In a new tweet, Credible Crypto tells his 188,700 followers at he’s watching a key level in the Bitcoin Dominance Index, which he notes can potentially signal the end of the boom cycle.
“Want to know when you should start taking profit on your altcoins and start being cautious about a potential end to this bull run? When BTC dominance falls below 30%. Until then, you’re selling too soon.”
The Bitcoin Dominance Index is a metric that traders rely on to measure the value of BTC relative to all other crypto assets. A plummeting Bitcoin Dominance Index suggests that BTC is losing value against altcoins. It can also indicate that other tokens are gaining more value than BTC.
In 2018, Bitcoin dominance fell to as low as 35% before the crypto boom cycle came to a halt. In the current bull market, Credible Crypto believes that the index would head lower as he expects investors to allocate more capital to altcoins.
“This time, I expect us to go lower than we did then. From a fund perspective, the amount of altcoins entering the market since inception is ever-increasing. It stands to reason then, that as the space grows, BTC dominance will continue to decline over time. The low in BTC dominance during this run should exceed the low of the last run…
BTC dominance will continue to bleed to lower levels than we have ever seen before.”
Looking at XRP, the trader issues a warning that Ripple’s native asset may pull back to as low as $1.14 if it fails to hold crucial support of $1.45.
“Not a big fan of the slow grind on our support here. Would have liked to have seen a stronger move off of this level. As long as the green region holds, we are fine, but lose it and we could see a drop to the downside (dotted green line) before the next leg up. XRP.”
Don't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/IM_VISUALS
