I sometimes wonder how the shitcoin holders potray themselves as superior to bitcoin holders and claim their investment or the coin is far better than others and spread out words that btc is bubble but in actual it's the needle that is going to bust all the shitcoin temporary hype.
Too many shitcoin holders think like this, and most importantly, haven't taken profits. At least not satoshi profits. This is where the liquidity will come from I believe.
This is pretty much why I see another Bitcoin season incoming, not based on BTC losing value, but instead gaining it. Like in late 2017, as well as from $20K to $30K when alts got relatively rekt.
I doubt it'll take another bear market before Bitcoin reclaims half the market, but could be wrong.
There are two types of shitcoin holders explained in this image which is :
1) One who wants to sell and could not sell due to zero liquidity and centralized wallet control
2) Second those who knows the real pain inside seeing their coins and investment being zero but still show off to the world they are in best position and will gain profits shwoer easily but inside they are broke with those shut coins.
I don't think your first point is necessarily accurate of the upper image, I see it as more accurate of the lower image and a good reason why there are no profits to be taken. A drop in interest and therefore volume is a good reason for why prices plummet, especially after some short-term hype that sucks in investors, before traders move onto the next new project that offers some better short-term risk reward. I see both your points as representing a cause (1) and effect (2) of the lower image.
The first image is more representative of the mistakes that investors of shitcoins make: namely that of investing (having a long-term strategy). They think X Y or Z will be the new X Y or Z, and despite a coin being up 10-100x, they refuse to take any profits on it, in the belief that it will go up another 10-100x. It's the greed factor, a mistake that every shitcoiner will eventually make in life. That and the other obvious mistake of thinking a 2x return against fiat currency is a good investment, while otherwise being down 50%+ against Bitcoin. It's the illusions of profits, while in reality it's simply the loss of satoshis.
The statistical reality is since May (so for the past 6 months), most newcomers to crypto have invested in shitcoins rather than Bitcoin, hence why shitcoins currently remain the majority of the market. Whereas most investors from January to April invested in Bitcoin (when it was 50-70% of the market). Naturally I'd consider those who invested earlier, especially when Bitcoin was priced between $20-30K rather than $30-60K, to be smarter investors. Despite the technicals leaning in shitcoins favour to gain more dominance (due to the long-term uptrend), there are good fundamentals for why shitcoins are going to get rekt sooner rather than later, or at least before the bear market comes (as well as short-term bearish technicals imo).
The market continues to remind me of $5K Bitcoin in 2017, early October, prior to moving to $20K while BTC dominance went from 50% to 70%. Which also adds up time-wise given the 49 month cycle that previously occured. This was after 6 month of over-investment into shitcoins, and therefore led to a reasonable amount of wreckage. Many shitcoins held their fiat values, but otherwise lost 75% of their BTC value by default. Clearly more experienced traders were taking profits back to Bitcoin from investments earlier in the year, while newcomers to the market simply held onto their shitcoins patiently waiting for them to pump, confused as to why Bitcoin was the only reliable crypto to be increasing in value.
Maybe I'm being too hopeful or optimistic here. There is always the argument that Bitcoin dominance bouncing from 40% to 60% will be like the start of 2018 (when this is exactly what happened) and confirmed the beginning of a mulit-year bear market, but I don't see this in the BTCUSD chart what-so-ever, I think we are more likely to be in October 2017 of the bull market. That of completing a recovery after a significant correction in price, with many suspecting $(6)5K was the top, prior to the theory of a 4 year cycle playing out and another parabolic blow off top.
That said, the past few weeks of Bitcoin struggling to maintain ATH (not dumping nor moving higher), for what seems like the first time ever, is typified by the struggle to maintain it's market dominance.
But in reality we don't need to do anything and time will automatically kill them from inside when they are broke with those dead coins lying in wallets.Elon is not taking to you moon and only gaining out of this whole manipulation and going to moon himself.Understand it as soon you can.
I think time is currently playing out, or time is up as they say. It took a lot of shitcoin over-sepculation in 2017 before Bitcoin's dominance recovered, more than most imagined was possible, and I think we've reached that same level now, especially after shib nonsense. Unfortunately many maxis weren't helping by spending 6 months telling people Bitcoin will *always* outperform all other shitcoins, while many shitcoins instead outperformed BTC, even if obviously only for the short-term. They effectively "cried wolf" and lost their credibility by doing so (by being wrong repeatedly, even if right in the long-term), so too many newcomers now won't take them seriously. I think this mentality is really damaging to Bitcoin's cause and purpose, as well as quite ignorant, more so than shitcoins themselves. There will be always be coins competing to be no.1 and this shouldn't be considered a threat as they simply will never get there. Sometimes I think it's better that every newcomer put's a small amount into shitcoins, like 10-20%, in order to get rekt and learn their lesson, or otherwise learn to trade effectively. Most investors aren't good traders however, as it's a completely different strategy (one being passive and the other more aggressive).
Admitting that shitcoins can temporarily outperform BTC in a bull market is a better strategy, knowing that previously this didn't last, and most relevantly in a bear market altcoins will get completely destroyed and most will never recover for the next cycle. That every cycle the Top 20 is completely different etc, while 99.9% end up going to 0 eventually, even if it takes a long time. Then at least if shitcoiners were trading and aggressively taking profits, rather than investing, I don't believe Bitcoin would be dragging it's feet price-wise right now due to it's dominance struggling. Trying to convince shitcoiners to take profits (back to Bitcoin) has now become increasingly difficult. Last time I recommended for someone to take profits they sold for ETH instead *face palm*. It's assumed that if I'm recommending to take profits back to Bitcoin I must be a maxi, which fundamentally I am when it comes to investing, even though I trade otherwise. Just my two satoshis anyway.
