Hey everyone and thanks for jumpping back into the cryptoverse today we're going to talk about Bitcoin dominance if you guys like the content make sure you subscribe to the channel give the video a thumbs up and check out intothe cryptoverse premium at intothe cryptoverse docomo ahead and jump in Bitcoin dominance a topic we have covered tirelessly on this channel throughout The years a topic I think at Once Upon a Time many people rode off as insignificant or delusional the idea that Bitcoin dominance could hang out again at 58% but here we are here we are
I do believe Bitcoin dominance as I've said is about to enter into its final stretch right I I think it's it's it's basically in that zone but I ultimately think it is going to go just a bit higher before are topping out probably at around 60% At which point I would expect it to very likely go down in 2025 so let's take a look at at where we are here on bitcoin dominance and and the thing is is with Bitcoin dominance a lot of people are in one of two camps right one Camp is they
think it's useless and and you know they say well you can't trade it which is not true right and then on the the other hand there's people that find a lot of value in it now the reason why I have focused on it for the last several years Is because back at the beginning of 2022 I said look guys the bare Market's starting right no one really knows exactly where the Bottom's going to be or exactly when the Market's going to turn around but if you want to buy something you're probably better off just buying
Bitcoin over the collective altcoin market now I was pretty clear back then that some altcoins would infect outperformed Bitcoin because some always do in a Bitcoin dominance uptrend The reverse can also be true in Bitcoin dominance downtrends not all altcoins outperform Bitcoin there's a few that are so weak they go against the trend but what I said back then was if you stick with Bitcoin until dominance is at 60% it will help you preserve the Satoshi value of your portfolio right now back then I I think this was very very comical a lot of people
laughed and they continued to Laugh even as Bitcoin dominance went up because their altcoins were going up but what they failed to understand a lot of them is that they still would have just been better off for the most part had they stuck with Bitcoin and and and what you'll see is that in order to rationalize the other views they have to cherry-pick very specific points to say why Bitcoin dominance does not matter so when we look at a chart like like Bitcoin dominance and you know you you Look at it and people say well
you can't trade it well think about it like this right eth makes up a huge component of you know where Bitcoin dominance is going to go right because it's the number two by market cap and when you look at at something like you know the the E Bitcoin valuation right so if we go over here and pull up the eth Bitcoin valuation this is one of those things where it's somewhat abstract as I've said before if you're not very familiar With with working with the Satoshi value of your portfolio right to say that eth Bitcoin
is trading at 039 to someone that's new to crypto they're probably like what the hell does that that mean you know I don't know what 039 means right what does it mean to say that eth is trading at 039 and what's fascinating is for years I have said that eth Bitcoin will go back to the .03 to 04 range and for years people laughed at that idea and now it is just in the .03 To 04 range and you know what I hear nothing Silence from the critics absolute silence because every single rally that eth
Bitcoin had over the years which I tried painfully to convince people was nothing more than a lower high now I would argue that eth Bitcoin has entered into the bottoming process right I would absolutely make that argument I think that it's likely going To bottom somewhere between 03 to 04 it's possible that it already has bottomed but what I said previously is that until it takes out the 50-day ese I would be you know cautious about putting too much weight behind that if you were and by the way we talk about eth Bitcoin because it
directly relates to bitcoin dominance okay when you look at at 2019 after eth Bitcoin durably broke down down whenever the 50-day estimate Was reclaimed it meant the bottom was in all right now if you go to 2016 right 2016 eth Bitcoin once the range low is durably broken none of this fake out nonsense right that we also got in 2024 the bottom was in after eth Bitcoin broke through the 50-day moving average right after it so even though there was a sizable Rally from right here from 0.008 or so up to .11 it still failed
and went just a little bit lower before finally bottoming okay so when I look at it today and I said this weeks ago I said look guys show me some daily closes above the 50-day SMA right and then we can start to talk about it that doesn't mean you should wait for them to hedge right absolutely not right but when I said that back over here in early September you can see that eth Bitcoin went down it came back up it got Rejected off the 50-day SMA and now it's basically trying to hold these lows
once again okay so again my view on this is that once eth Bitcoin can get some daily closes above the 50-day SMA then the odds start to increase considerably that the low is in until that time I still think it makes sense to be open-minded that it could go a little bit lower right just a little bit lower um still probably somewhere within the 03 to 04 range if 038 does not hold I think the next support would be at 0.036 as I pointed out in 2019 the the low before the May rally was at
0.024 right so if you put a a a price label on on on it right here it was 024 the the low before the May rally was 044 in 2024 but then the actual low ended up being 0.0016 so then if the actual low is is just you know um we're increasing it by 0.02 then it would put put it at 0036 which is interesting because 036 happens to correspond roughly to the 2016 all time you know the 2016 high of eth Bitcoin right if you just say draw a line across 26 16 from that
high you go across the page you'll find that you know that's exactly where that um you know that that level was right that 0036 level was was the 2016 high but again it doesn't have to go that low right it it doesn't and it it might just bottom out at .38 I think worst case scenario would be 03 but I again I I would say that would be Absolute worst case scenario and I I don't really think the probability of that going that going of it going that low this year is that high it's always
a possibility but it's not it's not my base case right now like my base case is you know you know 038 036 you know maybe 0034 but I I do think eth Bitcoin is in the bottoming process which means that Bitcoin dominance is likely entering into the topping process the main reason that I think Bitcoin dominance will go Higher is not really because of eth Bitcoin right I think eth Bitcoin honestly is probably dropped enough to to sort of fulfill my own um objective as to where I thought eth Bitcoin was going to go right
I can't spend three years saying it's going to go to 03 to 04 watch it go there and remain bearish on it right I mean I'm I'm openminded to it going a little bit lower right I'm absolutely open-minded to it but again you you don't call for something for Years and then watch it come and go right so for me it doesn't really make sense to be o you know overly bearish on the eth Bitcoin ratio anymore right at least not for this year I could see it going a little bit lower but this is
one of those things were like you know like like Bitcoin USD in in 2022 right it bottomed at 154 right but back in the summer of 2022 I said it would likely drop again in Q4 right and it's did but even though even back then I said look it's not going to matter right I mean if you buy if you buy Bitcoin at 17K in a few years you're still likely not going to care whether you got it at 17K 15K 14k 13k whatever right it's not going to really matter so I think you could
say the same thing about eth Bitcoin right now as it relates to next year but the reason I still continue to remain optimistic on bitcoin dominance is because of the altcoin Market right and again as I said previously you know 039 is somewhat abstract what does that mean well the way you can find out what it means is you just take the inverse of it right so instead of looking at eth Bitcoin you're looking at Bitcoin eth and and you can see the last time I showed you guys this chart I was pointing out how
you know back in in you know at the merge one Bitcoin would get you 11 eth then the last time I made this video I was Showing how one Bitcoin got you 22 eth and now I can show you that one Bitcoin gets you 25 right so you see why it matters so you you can't really say that you can't trade Bitcoin dominance right I mean if you if you understand the the the the main View and then you understand that the the only real way to get there to to go from 40% dominance to
60% dominance is for this the higher market cap altcoins to go down and for eth to go Down against Bitcoin then you can absolutely trade it right I mean and what I did back around the merge is I just converted my eth to bitcoin right that's how you trade it it's not like you have to go buy Bitcoin dominance you just you know the way you you take advantage of Bitcoin dominance uptrends is by trading in altcoins for Bitcoin before it happens now it's it's far too late at this point I think to get on
that train um but you know this is the View right this is this is why Bitcoin dominance is important the again the reason why I think Bitcoin dominance can go higher from here it could be because eth Bitcoin goes just a little bit lower but another reason are alt Bitcoin pairs right if you look at total 3 minus usdt divided by Bitcoin as I've said previously I think they're oscillators at best right and if they are oscillators at best how do I you know how do I assume that they won't Eventually just go back down
to the range low I do think they will go back down to the range low in fact they were at the range low in December of the last having year so why can't they go back down to the range low potentially by December of this having year I think it's absolutely possible for that to happen and I would still consider the eventual breakdown to the lows to be the most likely scenario now could there be a pump before going There it's always possible but I will say this I think before all Bitcoin pairs go back
up here to parody with Bitcoin I think they they go down here first okay that's what I think before they come back up to parody I think they go back down to 0.25 now that doesn't mean they can't go up a little bit between now and then but that is what I I think and the reason why I still remain adamant about this view is because I think I'm being conservative I Think I'm being reasonable and and as I've said before right I think I'm throwing the dun's bone by just saying their oscillators at best
because I mean it when I say oscillators at best because the other way you could draw this right the other way that you could you could interpret this chart is to say what if they're not oscillators what if on the other hand they are just bleeders right what if all Bitcoin pairs just bleed over long in a period of time Because you know even if you ignore this right that's a high that's a lower high and then this is a low and then that's a lower low now of course we can come up with the
reasons for why the those lows occurred but at the end of the day you have a high so you have a low a high a lower low and a lower high so it's a trend so I'm just saying for them to become oscillators you know at best they could come back down to 0.25 and I'm saying that's good enough for me to be Satisfied about Bitcoin dominance but there's still a chance they come all the way back down here which I don't really think a lot of people want to even think about that outcome so
when I say oscillators at best I mean it I mean it now why haven't they actually broken down right why haven't they and and you could argue well they they they sort of have a little bit but they haven't really taken that final plunge and so what is the reason for that well if you Look here what you'll notice this happens sometimes where something will try to break down but then it will it will wait until something else forces it down so what you can see with all Bitcoin pairs this cycle is that they were
previously holding support at point 4 four right this is that 0 4 level that they were they they held support at for for actually quite a long period of time every time that they came down here they went down to about 04 there were some Times where they Wicked down to 39 or a little bit lower but mostly 04 was held as support now eventually 0 4 failed to hold as support we can see a larger move down a bounce back up sort of a you know making people think it was just a fake out
right you know they say oh it went down oh it's just a fake out don't worry and then it came back down again and it spent more time down here and then it's rallied back up but now you can see that the prior support at 0 4 has quietly Turned into resistance right so you basically have a scenario where all Bitcoin pairs have been stuck down here for several months right literally since I mean since June they've been down here with some occasional moves back above it but they've been stuck down here for several months
and I think the reason they haven't broken down yet durably is because they were waiting on the bull market support band to come down and push them down right so now you have the Bull market support band has crossed below the prior support right so if you look at the 20we SMA of all Bitcoin pairs at. 39 now the 21 we EMA is still at 04 and now that is where all Bitcoin paays are getting rejected right before they were holding support at 04 but since June they've been struggling to spend any real time above
point4 and now you have the bull market support ban also pushing them down from 04 so I think that you're about to see The final drop of all Bitcoin pairs this cycle right so that is still my view now last cycle if you guys remember you could have connected the dots roughly speaking to figure out when the low was going to be right if you connected this Wick to this W you know to these Wicks over here right if you connected to the low yes there were some WIS a little bit below but it was
the third tag of this trend line that marked the actual bottom for Alt Bitcoin pairs during the quantitative tightening phase of the cycle now obviously they went a they went a bit lower later on right but that was during a parabolic bit coin rally during quantitative easing right that's a different part of the cycle right we haven't we're not in that part of the cycle right we're not in the quantitative easing part of the cycle we still are experiencing quantitative tightening right now and interest rates Have only just begun to drop a little bit so
I'm not saying that that can't happen again this cycle I'm just saying that we haven't reached that point right we're still at a phase where the fed's continuing quantitative tightening and even last cycle when the FED cut rates in July right here all Bitcoin pairs still dropped to the range lows even after the First Rate cut right so we can't even say that a rate cut is necessarily going to save all Bitcoin Pairs when last cycle they dropped to the range low after rate Cuts arrived now the angle of descent here is a lot different
than what we've seen this cycle right so if you look at it this cycle and you draw something similar right you say or this is your first low and then here's your second then where does your third low come in right well if you draw the support line at 0.25 you can roughly see it comes by December right by December of 2024 you see that so I still think there is a good chance here that all Bitcoin pairs will take that move down and that is the main reason I think that Bitcoin dominance is going
to go up into the end of the year remember last cycle it took until the FED actually entered into quantitative easing where they were expanding their balance sheet before all Bitcoin pairs even bottomed and that has not yet happened right you can see that the FED is still reducing the size of Their balance sheet therefore it makes sense in my mind to assume that all Bitcoin pairs will still go down I'm not suggesting that the balance sheet is is you know know there's a there's a direct trade there between the balance sheet of central banks
and allcoins I'm just saying it's a function of liquidity now there's some people that say well what about the the the money supply that's something different right if you look at the the an approximation of the money Supply you can see that that's gone up that's been a better comparison to risk assets on their USD pairs right when you look at at the money supply compared to bitcoin USD but if you want to get it inside into all Bitcoin pairs you look at not just the the balance sheet of the FED but you look at
at at all central banks or at least an approximation of them and one way that you can do that is you can look at the net liquidity indicator right and in this case what You'll notice is that as net liquidity goes down all Bitcoin pairs go down as net liquidity generally goes up all Bitcoin pairs generally go up right so that the the the net liquidity indicator that we have here has been great for tracking all Bitcoin Pairs and you can see pretty clear that it just keeps on putting in lower highs and lower lows
right just like it did last cycle you see that like it I mean it did the same thing last cycle And then eventually after it broke out of this after it broke out of this then Bitcoin dominance started to go down and all Bitcoin pairs started to go up but what I'm saying right now is that if you look closely at this when all Bitcoin pairs had sort of this false breakdown back over here in June where it looked like they were about to break down that was also when net liquidity looked like it was
about to break down too and then it went back up okay but the issue now For net liquidity is that net liquidity looks to have formed another lower high now the reason it's formed another lower high despite the fact that you have some central banks you know increasing the size of their balance sheet right if you look at like the Bank of China obviously they're injecting liquidity over there but the FED is still reducing CER balance sheet as well as some other central banks but furthermore the thing that we have to remember is that one
of The main components to net liquidity is the dollar because you have to actually convert the balance sheet of the central banks in other parts of the world to the dollar to get you know to add them all up toste to the same unit and the dollar has been going up recently which is what is causing net liquidity to go down okay so if you go look at the dollar I have said previously that I was bullish on the dollar going into October now the reason I was bullish on the dollar going Into October was
because I said previously that the dollar is tracking treasury yelds pretty closely right and if you go look at the 2-year treasury you can see that it was actually you know sort of sweeping the prior low and what I said back then was look guys the fed's about to cut 50 basis points but unless there is a clear and obvious sign that a recession is here right and it's not just something we're still manifesting in our minds Like but if if it's actually here then yeah it's probably more likely that the two-year yield just breaks
down but on the other hand what if it's not here right then wouldn't it favor the 2-year yield rallying back up to the bull market support band at the very least absolutely right and that's what's happened so far I mean it hasn't made it there but it's not too far away so what happened is you had you know you had all these negative jobs data coming out Before the 50 basis point rate cut even negative 81800 revisions to jobs in 2023 or or sorry over over Parts 2023 and 2024 I believe and then all this
negative stuff came out the FED Cuts 50 basis points and then ever since then all the jobs data has has been better than expected so now the Market's like well what you know what's the FED doing by cutting 50 basis points this is why it's such a difficult job at the FED because back then everyone was screaming To do 50 and now you get all this jobs data that doesn't look so bad now that doesn't mean it's not going to get revised back down in a couple of months but in the short term the market
has to go with what the market sees and right now the market sees a Fed cutting 50 basis points and the job market has cooled off a little bit over the last couple of months right if you look at the unemployment rate it's cooled off a little bit um and so the two-year yield Rallies why do we care about the two-year yield I don't imagine many people care too much about it unless you're going out and buying t- bills or CDs well the reason it matters is because the dollar has been tracking the 2-year yield
pretty closely as it has the 10-year yield right so when the dollar goes down the 2-year yield has been going down when the dollar goes up the 2-year yield has been going up right you see that so because because of the Expectation that the two-year yield was going to Rally I therefore I therefore thought that the dollar was going to Rally okay other evidence to suggest that the dollar was going to Rally in October was also the fact that in 2016 which a lot of people like to compare this cycle to 2016 uh we saw
the dollar start to Rally in October right you know and and and it rallied 10% before the end of the year right I mean this was you know really From October till the end of the year it rallied about 9% to give you an idea of where that would put the dollar if it rallied 9% it would put it back at almost 109 110 somewhere in that ballpark which again I don't really think a lot of people are even considering right now but it is a possibility now in the short term the dollar is at
a major resistance level right even if you if you uh you know get your tea leaves out and you you look at The dollar you could say all right well maybe it's just back testing the prior support it's also back testing the bull market support ban so this is a very important spot for the dollar it's possible it just gets rejected if it gets rejected I will try to quickly pivot my view on the dollar but in the short term if the labor market data still doesn't look so bad immediately then why can't the dollar
continue to Rally by the way you see this trend here On the dollar I could see eth Bitcoin doing something like that right where it puts in a low it then looks like it might just double bottom and then it sweeps that low and then goes up absolutely that could that could happen for eth Bitcoin um and it might be that sort of sweeping of the low that causes all Bitcoin pairs to finally drop right it might actually be that um but yeah I mean I I I think that this makes a lot of sense
that the Dollar's gotten this Big rally as I said it probably would and therefore because of that rally net liquidity has gone down and when that liquidity goes down all Bitcoin pairs get rejected when all Bitcoin pairs get rejected Bitcoin dominance generally goes up right now right now Bitcoin dominance is at 58% um and a lot of times it it can reverse in September right we talked about that but sometimes that that reversal can be temporary right like it Just lasts like a month or something for instance in um in in 2021 you can see
that there was a reversal in September right but then it it just reversed for one month and then it came back down and then swept that prior low so it's always possible that if this is a temporary reversal and Bitcoin dominance drops it might just drop back to the bull market support band and then go up into the end of the year right but at this point there's no clear indication it's going To even do that because Bitcoin dominance has remained bullish you know I mean it looked like maybe it was going to do that
coming out of September as it dropped back to you know 57% but then last week it just rallied back up to you know back above 58% which is where we are today if you were to look at monthly High kinashi candles for Bitcoin dominance think about how many people have faded this over the last 3 years Right I mean or at least since December of 2022 over the last two years think about how many people have faded it I mean you could even take it all the way back to you know to to January of
2022 and and think that look you know if you just flip bullish on it when 2022 began you're doing okay right I mean yeah like there was some volatility but you're doing okay and and and this is what has happened essentially is that you know some people got very bearish on Bitcoin dominance they thought it was going to go to 30% but because Bitcoin USD went up it it sort of lifted some of their altcoin bags but the problem is that Bitcoin hasn't gone anywhere since March and because Bitcoin hasn't gone anywhere since March alts
have just bled back to bitcoin right so look at this chart right I mean if you look at at at Bitcoin USD look at the chart of Bitcoin USD and see how it hasn't really gone Anywhere since March which we talked about because we said look Bitcoin or gold is breaking out back then and usdt dominance is sitting its long-term trend line that was likely the midcycle top for Bitcoin USD and if you overlay Bitcoin dominance onto this chart you will see that it has continued to Skyrocket even while Bitcoin USD has gone absolutely nowhere
right so the people that were laughing at Bitcoin dominance' you know validity back over Here because their altcoin was up are now stuck holding these alt bags that just keep on leading to bitcoin bitcoin's been at 60k all year but altcoins have gone down for most of the year now of course you can cherry Pig different altcoins to tell whatever story you want to tell but collectively the altcoin market has been bleeding back to the king and again we know last cycle it did not bottom all Bitcoin pairs did not bottom until Q Returned last
meeting pal said look we're still going to continue QT for now you know so I still think that is a a a very very likely outcome that Bitcoin dominance goes to 60% now why 60% it's a question I get quite frequently why am I so hung up on 60% well look guys it's just a number I I I I pulled it out of two different places one of which was essentially saying that in bubbles you know when you get these all Bitcoin bubbles you you would expect potentially For them to return to where they broke
down from and where they broke down from was approximately 60% right right that's why I I I've said 60% is that's really where the breakdown occurred if you look at eth Bitcoin for instance you know I'm not suggesting that you know that it has to go all the way back down here I'm just saying look it looks kind of like the bubble for it started either where it is right now or a little bit lower right that's where the bubble started it You know because before that it was somewhat constructive right it was just you
know moving up a little bit pulling back moving up pulling back and then all of a sudden way up with very little consolidation um very little pullback to the downside so that's the same thing with Bitcoin Dominus right I think that it's just going to return back to where the big breakdown occurred the other the other spot where I think it gives some Of that Confluence with 60% is to look at last cycle and see that dominance retraced to the 618 fib retracement and if it does the same thing this cycle that would correspond to
again 60% so that is where I keep getting that 60% number furthermore last cycle when Bitcoin dominance crossed the .5 FIB retracement that's actually what corresponded to the midcycle top for Bitcoin USD right if you just take this down that was more or less what Corresponded to the midcycle top right when it passed through that 0.5 FIB retracement level and if you look at the same thing this cycle you can see that when it crossed to the 0.5 FIB it was like one month after the top that's what more or less was information that that
sort of that midcycle top was in right it crossed it here on the monthly the midcycle top was just one month before uh this time it it it Wicked back up to it in April where it crossed it and then The midcycle top was just one month before and then you can see that Bitcoin USD basically just bled until after Bitcoin dominance hit the point 618 and that could be the reason why Bitcoin USD has failed a lot of people's EXP expectations since March because you know they were under the illusion that it was only
going up because of these you know all these ETF flows and everyone buying spot but in reality one of the big reasons it was Going up was because people were just converting their alts to bitcoin I'm not trying to minimize the flows from the ETFs they had they were impressive absolutely but I think a lot of times people underestimate the size of the market right they look at the flows and they're like well this has to be bullish but the reason I think what they missed was one of the reason reasons why Bitcoin was going
up so aggressively was because people were converting their Altcoins to bitcoin the problem now is that the purchasing power of their altcoins has gone down considerably so now if you go convert your eth to bitcoin you're not really getting nearly as much had you done it two years ago right so obviously if you're not if the purchasing power for alts goes down against Bitcoin then it's not going to be as significant in propping up the price of Bitcoin USD that doesn't mean that Bitcoin USD can't go up could right And it has I mean it
it certainly has but there there's this other element too of like well no one knows where Bitcoin USD is going to go right obviously October tends to be bullish but you know Counterpoint September tends to be bearish and this month it was or this year it was bullish last year September through December it was all green so there's always a chance that that happens again but the Counterpoint is that Ethusd you know every time it is broken down against Bitcoin ethusd then went down in Q4 of that year and it was it also went down
in Q4 of 2016 which was a Bitcoin having year right it also went down of Q4 Q4 2019 here you have Q4 of 2024 and ethusd has been following these monthly candles 2016 to 2024 precisely all year long so because of that I still think you have to wonder you know could there be you know could could there be another hit Bitcoin could theoretically Take another hit it's possible maybe it'll take another hit around the UN inversion of the 3-month and the 10year yield it doesn't necessarily mean you have to have an immediate recession perhaps
that gets delayed until 2026 I have no idea but what I will say is that um you know when when you look at at well look let's look at the unemployment rate I mean look the unemployment rate has dropped down recently so is there a concern right is there a concern one Problem I have with everyone that compares this you know you know this cycle they they they compare it to just the last two right well not the pandemic but they'll just look at the do the doccom crash and the financial crisis they say well
you know how does it compare to that there's other recessions where the market only drops 20% right there's other recessions where it's not nearly as bad as the dot crash or the financial crisis and interestingly Enough we could learn something from those recessions right for instance there's a recession in 1957 right there was a recession here I believe that was a recession um yeah right here in 1957 where the unemployment rate went to 4.3% and then it dropped over two months to 4.1 and everyone celebrated probably because hey things aren't so bad and then the
unemployment rate skyrocketed from there right the Following month it went back up to 4.4% from 4.1 right and that's when the recession occurred right so you could see something like that happen again now someone might look at that and be like oh my gosh what did the S&P do and then you pull up the S&P and you're like oh okay it dropped from 47 to 40 whoopy do right so what who cares it was a it was a small drop consider you know compared but everyone Obviously Compares it the dot and the in the financial
crisis right you can get Garden style recessions like the guard more of the garden variety um not your 50% plunges so I do want people to be aware of that right you could get a scenario going into the end of the year where the unemployment rate starts to go back up and then everyone freaks out it takes e to the lower logarithmic agression trend line and then that's where it finally bottoms you know and Again normally the Market's bottom before the unemployment rate Peaks so there's absolutely a way that we could see Bitcoin dominance go
to 60% even if Bitcoin drops right even if Bitcoin drops um and that's what happened last cycle so you know as far as Bitcoin dominance goes I still am very much in the camp that it is going to go higher um if you look at at at quarterly candles for Bitcoin dominance you know since October of 2022 there's only been One quarter where dominance was red and it was the third quarter of 2023 if you were to look at at um the the social risk right well first of all let's go look at at the
social risk it's at 0.0086 or so so it's still hasn't really gone anywhere right that Ray cut that led to a temporary surge in demand and interest by retail has just sort of Fallen back off suggesting that 50 basis points really isn't enough to change to To move the needle right so the fed's probably going to cut need to cut more to really bring more you know bring more activity back out right I'm not suggesting they're looking at Social risk right I'm just saying like this might this might very well be a good indicator as
to what they need to do um or or it might maybe it's not a good indicator of what they need to do but it could be a good indicator of once they've done enough we might actually See retail interest start to Surge back up just like it did in 201 19 and 2020 after they cut rates about three times um so let's see what happens with social risk now the reason social risk is important as I've said is if you look at at Bitcoin dominance um excluding stable coins right so we're going to do it
look at it excluding stable coins what I'd like to do is add on the social risk here so let's take out dominance excluding Stables right as long as Social risk is going down or staying flat at at low levels dominance is going to go up more than than likely right you can see that's what happened last time dominance only started to go down with social risk durably started to go back up and put in higher lows so far it hasn't really done that right I mean in fact social risk just put in a new low
two months ago right and it's been lower highs since April right so this still looks like dominance is going to Trend Up until enough people come back to really you know get dominance to top out I still think it's going to take some more rate Cuts remember last cycle it took 75 basis points of rate cuts to turn dominance around right well no that's not true it took it took it about about 50 right but it also corresponded to QE so it's hard to exactly know but the point is that social interest did not durably
come Back until after 75 basis points of the um what was the T rate back then 225 or 250 um you know let's say it was 225 I don't really remember remember why don't we go take a look so I'm not just putting up something that that doesn't actually make sense which wouldn't be the first time but let's go look at at interest rates you can see back then it was it was two 2.5 right so 2.5 so last time it was 75 over 2.5 right and then this time the The terminal rate was five
and a half for that you know for that rate hiking cycle but so far they've only cut 50 right so this is still a much larger fraction than this which is why I think they're going to need to cut more and it's why I still think Bitcoin dominance is going to go up despite the fact that they've already cut rates because last cycle dominance went up after they cut rates and last cycle dominance didn't top until QE began and last cycle Dominance didn't durably go down until after three rate cuts which this cycle would correspond
to approximately 165 basis points of rate Cuts if you take the ratio which approximately could have been achieved by December but now all of a sudden the market is saying you know what maybe the FED doesn't need to cut 50 bases points in November but if the 1957 comparison plays out and the unemployment rate comes in at 4.4% because there will be one more labor Market reading before the FED makes their decision if the labor market reading comes in at 4.4% unemployment I could easily see this shifting back towards 50 basis points right if you
know if it if it turns out that you know that that this move by the unemployment rate was just sort of like a um a normal pullback I mean look at prior Cycles right you can see that there are pullbacks in Prior cycles that didn't mean the top was in right I mean there's Plenty of those so this could just be that and it could be that in a couple of months we're laughing at at at the idea that that this is all that it was going to be you know that that the unemployment rate
was only going to top there it's possible it tops there but you know if you look at the world around you and and and and you look at the labor market it seems like it it seems like that that the business cycle is still very much slowly playing out and You know it could do something like this where it it you know it goes up it then comes back down and then markets do well for a while and then maybe out in you know 2026 it goes up again right it could do something like that
um that it has that stuff has happened before right I mean you can actually see prior Cycles where it's done kind of that kind of stuff where it gets one big rally up and then back down and then back up again and in this case you had two backtack Recessions um right you had two back to back recession so what if we are in sort of the first the sort of the right so it could just be like one consolidate and then in 2026 maybe it goes up again kind of like what happened in 1980
to 1981 right that's also a a a possibility but in the short term in the short term Bitcoin dominance 58% still looks like it to to me although I maybe I need to get my eyes checked but to me it looks like it's going to go to 60% I'm Guessing you know first a move to 59% a pullback and then a final move to 60% and it could look something like this like you know maybe we just experienced that twoe pullback right there right and then it's it's going into sort of this next phase where
he goes up to 59 right gets another pullback consolidates and then up to 60 by the end of the year which would look something like that right and then as as 2025 arrives maybe Bitcoin dominance Then comes back down and and then goes goes back down so I I still think that that is going to be my my base case here still think that that that dominance is going to go higher despite the fact that we've had a rate cut because last cycle even the First Rate cut wasn't enough to stop Bitcoin dominance the Bitcoin
dominance train but again those are my views um if you look at at at at Bitcoin dominance uh excluding stable coins and you connect the dots we've been looking At this for years I've been saying look it's probably going to top out when it tags the top of this trend line again if it does so by December that's 65% it's 62% right now that's 3% 3 % is going to get you easily over 60% right so and it might happen before then right it could happen before then this is also excluding stabl so there's not
a one to one comparison right if you go back to the workbench and you look at the Bitcoin dominance Comparison um let me go back here um yeah I want to continue here and then let's go back to to bitcoin dominance without but you can see they're not exactly the same like the uh the yellow one is is dominance without Stables the orange one is dominance with Stables right so you can you can clearly see the difference right there there's not an exact match there and it makes sense there's not an exact match because if
you were to go look at at you know Usdt market cap it's been going up a lot right and by the way usdt dominance is also really interesting to follow and we talked about this back in March as to why it was likely going to be a local top for Bitcoin because every time usdt dominance has hit this trend line there's been a large correction by Bitcoin every time I mean in fact every single one of these times it hit it it there was at least a 50% drop by Bitcoin USD Um and you can
see that it's been putting in higher lows ever since March 2024 USD dominance so what I like to do is look at Bitcoin dominance plus plus USD dominance and see that it's you know it's trying to break out here just like I did over here and I I think it's going to right I think it will break out and I I do think dominance will go higher it could be that bit coin dominance goes higher maybe USD dominance goes even higher um But I I do think that it it makes sense to look at at
the market through the lens of not only Bitcoin dominance but also usdt dominance and even you could even throw in eth dominance in there as well if you want um right you could throw in E dominance and see right and see that there's room potentially for it to go just a little bit higher and I I remember pointing this out a long time ago that this metric right here might Eventually top out you know at around 82% and I said this back when it was you know probably at like 65 or 66% now it's at
77% and you only need right I mean if if you look at this and say well what if we're right here this is right after rate Cuts last cycle right what if we're just right here and we're about to get that last move to the top of the range where Bitcoin dominance tops out as long as you know along with this metric of Bitcoin dominance plus us dominance plus eth dominance right so to me I still remain bullish on bitcoin dominance um for those reasons uh there's still a good chance that n liquidity breaks down
and if it does all Bitcoin pairs would follow it um eth Bitcoin always possible goes just a little bit lower but I wouldn't I wouldn't put a lot of weight into going you know to 01 or 0.2 uh but it's it's still I think the most likely Scenario is at bottoms between 03 to 04 um so what I will be mostly looking you know looking towards is do you know do all Bitcoin pairs take the final plunge right is this the the the is this what they finally need a rejection not only off of that
04 level approximately there might have been a wick to 041 right was there yeah it Wick to 0 41 but also a rejection off the bull market support ban which is now Moved down to the prior support and if they get rejected right if they get rejected then I I think it's a pretty clear a pretty clear move down to the bottom of the range and by the way one of the reasons you could argue they get rejected another reason first of all you could argue the reason they were rallying in the first place was
because of all these aggressive rate Cuts getting priced in right if you go look at at you know uh if you look at Comparing this you can see that in December um you know back in September 6 right the market was you know a lot more optimistic that the FED would you know be at at at at a much lower fed funds rate but now but now the the market thinks it's going to be a lot higher right the FED funds rate will be a lot higher right so this was back in September there was
a almost a 43% % chance that the FED funds rate would be at four and a quarter by the end of the year now there's only a 133% chance of that happening so it could be that those pricing out of some of those rate cuts the pricing in of those rate Cuts might be why all Bitcoin pairs rallied in the first place but now that those rate cuts are getting priced out some of them anyways that could be the reason right because now the the most likely outcome According to the markets I'm not saying it's
the most likely outcome I'm just saying it's the most likely outcome right now according to the markets is the 76% chance that the FED only Cuts 50 basis points between now and the end of the year which just a couple weeks ago there was a good chance they were're going to cut a 100 basis points between now and the end of the year if 50 basis points wasn't enough to bring retail back to The table and increase activity you know in the cryptoverse then why would you know will 25 another 25 do it yeah maybe
it you know it took 75 last cycle but again last cycle the toal rate was much lower so this cycle You could argue that you need you know closer to 150 basis points of rate cuts to mimic what happened uh last cycle so anyways that's where I stand those are my views those are my views on bitcoin dominance I do not apologize for them I know some People don't care but I think the people that don't care have constantly misunderstood it I think they've probably lost a lot of money in altcoins the ones that did
make money in altcoins congratulations um I'm not rooting against you right I just know there's a lot of survivorship bias associated with it right it's easy to look back and say well that altcoin outperformed Bitcoin and to cherry-pick which ones did and ignore the thousands that have Just bled to bitcoin right and people tell me that I cherry pick all the time altcoins but guys you know if you're looking at a chart like like Bitcoin dominance and and we're going to look at this and and be rational about it and say that this I mean
look anyone's going to call this a Bitcoin dominance uptrend right you can't get around it don't you think it makes more sense to say that the people cherry-picking are the ones that are choosing the ones that are Outperforming Bitcoin because collectively Bitcoin has been outperforming the entire Market yes some alts have outperformed Bitcoin congratulations but that's exactly what I said right I mean that's Verbatim what I said three years ago Bitcoin dominance will go up some alts will outperform and the only way that you can really right the only way that you can really find
some older altcoins that are durably outperforming Bitcoin is to Cherry pick right and a lot of them even haven't right I mean look at look at um I mean first of all eth Bitcoin right it's basically just been mostly down for years now for anyone who's cared to look at the chart objectively now I know it was easy to laugh at me anytime it rallied but objectively this was just a macro downtrend that people refuse to believe but look at all the others right look at at Theta Bitcoin right it's been mostly down for a
long time time I'm not Suggesting it can't bottom out look at dot Bitcoin I mean look it I mean it's just putting in new lows this week link Bitcoin right it's still I mean it's it's nowhere near it's been in a massive downtrend Litecoin Bitcoin what is there to say right a a Bitcoin you know you're at this point there's really not a prior time in this entire cycle where a a Bitcoin except with a couple of Wicks has been lower than it is right now right so if if you Had said you know what
a 2020 and 2021 you had a good run but it's 2022 now and you're valued at 6,000 SATs and even if even if you were a little bit later to it like I was because I didn't really acknowledge it until q1 you know 3,000 SATs 3200 STS it's been a good run but the fed's about to raise rates and I don't have time for all during quantitative tightening and rate hiking cycle right I'll just stick with The King you could have done that you could have ignored all these pumps all these people on on Twitter
telling you why I was wrong and here you are down here and it's basically as low as to spin the entire cycle right same thing for all these for most of these alss uni Bitcoin I mean look it's broken down now it's getting rejected probably a Bitcoin it's been a little bit stronger recently but I'm curious if it's going to back test this Trend line I think it's a good outcome salana Bitcoin right look salana was one of those ones that has done better than most adults but you know this is what I said back
with the whole cherry picking right when I made the you know my Proclamation at the beginning of 2022 about Bitcoin dominance and all Bitcoin pairs going down right it was back over here so you have people that disagreed with me over here saying I was wrong down here right so what happens is in Order for them to justify their counterview is rather than make the comparison from when I said it back in early 2022 they they look back down here probably when most of them capitulated salana a lot of them did they sold at the
bottom and then now after they sold at the bottom they didn't say oh well look salana outpour Bitcoin no it didn't it outperformed it if you cherry-picked the bottom right but if you look at it over The entire cycle from when the the rate hiking cycle began back in early 20122 it's underperformed Bitcoin it has it absolutely has right I mean it's still below where it was back in early January in early January 2022 was at 37,000 SATs now it's at 22,000 SATs so again this is one of those things where like yeah like if
you cherry pick if you right A lot of people rode this down the entire way you know not listening to the idea that it could actually go down that far they Sold the bottom it then rallied back up and then they say oh look at Bitcoin dominance and how how how bad it is to follow if they had listened to it up here they would have Pres Des the social valuation of their portfolio hell if they listen to it up here even if they didn't confer back they're still better off and by the way the
Salona Maxis that keep you know talking about the eth Maxes and and and sort of dunking on the eth Maxis even though look I've been Barrassed on E Bitcoin for a long time but I've already you know I'm starting to flip and I think it's going to go the other way in 2025 but look I will tell you this the eth Maxis that are getting Dunked On by the salon Maxis how do knows salana is not following the same path that eth did right because if you look at this salana dropped 90% against Bitcoin It
then rallied about 500% okay keep that in mind 90% drop and then a rally of 500% would we care to guess right would we care to guess what what what eth Bitcoin did how many times have someone said that you know that salana is the eth of last cycle or something right look at this it's the same thing guys you know for anyone who cares to look right eth Bitcoin dropped 90% And then it rallied About 500% right not quite but almost almost 500% it's even the same pattern 90% down 500% up and then look
right it's the same sort of that four top pattern it's what eth Bitcoin did right you got four tops and then there was a drop here and then it came back up and then it bled what if soulle Bitcoin is Right there like what if you know and I know people are like well it's higher lows but look I mean eth Bitcoin is putting in higher lows also and then it and then it broke through what if Soul Bitcoin is following eth Bitcoin and it's about to break below this and and then come down here
kind of like what eth Bitcoin did and then people are like oh Bitcoin dominance is at 60% and then They sell their alts and then maybe salana then bounces back up on its Bitcoin pair just like eth did stays up there for some 20 part of 2025 and then bleeds back down in 2026 it looks something like this right could that happen yeah AB absolutely so one of the things I've learned is if you're holding an altcoin for a long time and and you're you know your your goal is to look at your alt and
then dunk on on higher market cap Alts and to say that your alt's going to flip the higher one right people have been saying their alt's going to flip ethereum for years and they Haven it so if you're a soul Maxi and you've laughed at Bitcoin dominance for years because of cherry picking the low that most people sold and you're looking at it over here thinking oh well look at ethereum and look how bad it is what if Soul Bitcoin does the same Thing and and you're blinded by just how similar the move is look
at the patterns before they actually fully play out right if you wait until something else happens it's probably too late right so these are my views again there's always a chance that salana deviates from the path that eth Bitcoin has carried out but but at the end of the day Bitcoin dominance has been basically the only thing that has been more or less up only for the last Several years right and it's the thing that I have been the most bullish on right hold Bitcoin you know keeping your portfolio Bitcoin heavy allows you to preserve
the satosi valuation of your portfolio no one knows where Bitcoin USD is going to go right there's a chance that goes up in Q4 like it did in 2016 there's a chance it goes down in Q4 like it did in 2019 no one knows we place our bets place our bets but no one actually knows you know Exactly where it's going to go and and so if you're if you're an investor and you want to take on risk then you want to make sure you're buying the lowest risk assets that give you the highest sharp
Ratio or sortino ratio right you don't want to go out not Financial advice but you don't want to go out and buy an a you know a portfolio with with an expected return based on historical returns much lower than what you would just get by holding Bitcoin right and This is the thing I've gotten into so many arguments people like why don't you know what's the problem with buying you know with holding eth look there's been nothing wrong with holding eth since June of 2022 if all you care about is the USD pair the USD
valuation of your portfolio absolutely nothing wrong but my point is you bought eth over here where you could have just bought Bitcoin and made about twice as much twice you know two times More because e Bitcoin has dropped since the merge eth Bitcoin has dropped over 50% you could have just held Bitcoin since the merge and then you could convert your Bitcoin to eth now and double your eth even if you're an eth maxi right even if you're an eth maxi You could argue that your goal is to increase your eth so if we get
to a point in the in a future Market cycle where it looks like the fed's going to raise rates Aggressively and go through QT it's not it's not a shot right at anyone to say that e Bitcoin is going to go down it's just the way the market works right so you could argue that just because you're eath Maxi if you recognize where we are in the cycle and you preserve the satos valuation of your portfolio you converted to bitcoin your eth to bitcoin up here even if you're eth Maxi and then after this major
drop happens which was always going to happen Right then you can slowly convert back now you've doubled your e and all you did was hold Bitcoin for two years and that is why Bitcoin dominance is important well and wrap it up there thank you guys for tuning in make sure you subscribe give the video a thumbs up and I will see you guys next time bye
