Altcoin Roundup: Market cycle analysis screamed 'take profit’ ahead of May 19 sell-off
June 11, 2021. Summarized by summa-bot.
Compression ratio: 19.7%. 1 min read.
Even grandma was bullish on Bitcoin in April, but market cycle analysis shows it was past time to take profit.
The cryptocurrency sector has an established reputation for being volatile and fast-moving, and these characteristics were on full display in May as the rapid decline in the price of Bitcoin (BTC) from $60,000 to $33,000 led to a mass exodus that wiped off $1. 2 trillion in value from the total market capitalization.
This phase was seen in the cryptocurrency market beginning around December 2018 when the price of BTC bottomed below $3,500 and extended all the way until October 2020 when its price began to meaningfully rise above $12,000.
The mark-up phase really began to heat up in December 2020 and extended into January 2021 as BTC and the decentralized finance (DeFi) sector were attracting global attention, with the total market capitalization climbing to a high above $2. 5 trillion in May as the distribution phase began to initiate.
Similar to the 2017–2018 bull market, the price of BTC reached a new all-time high (ATH) and then began to trend down, which resulted in funds rotating out of Bitcoin and into the altcoin market, further propelling the total market capitalization to a record high of $2. 53 trillion on May 12.
For the astute crypto trader, this pattern was a sign that a mark-down phase was approaching and that it would be wise to take profits as BTC fluctuated between $40,000 and $60,000 and altcoins spiked to all-time highs in preparation to ride out the sell-off and scoop up tokens at a discount during the next bottom.