️ This Does Not Make Sense!

[00:00:00]Don't believe people that draw random lines on charts. And here is why. This is Bitcoin's market cap relative to the rest of crypto. We are excluding stable coins to make things a bit more precise.

[00:00:13]And this clearly indicates that Bitcoin should outperform the rest of the market. Now, here is the equivalent Ethereum relative to the rest of crypto.

[00:00:22]We can also call this the stable coin adjusted Ethereum dominance. This clearly shows that currently Ethereum is in a problematic spot. So, Bitcoin going up, Ethereum going down, relatively speaking. That's what the lines on the chart tell us. However, look at this.

[00:00:41]This is Ethereum relative to Bitcoin.

[00:00:44]Make this make sense. Ethereum relative to BTC has just broken out and it should rather appreciate. So, what's correct here? Is Bitcoin outperforming Ethereum underperforming? At the same time, Ethereum outperforming Bitcoin? This is not possible. Making money in crypto or in general with active trading is not that easy. Drawing lines in the sand is not going to cut it. Yes, sometimes those lines can become self-fulfilling prophecies if enough people look at them, but more often than not, it's just opium. And so, here is how I personally approach this. I just look at the macro as in where is money flowing right now and unfortunately crypto currently sees outflows when we look at the stable coin market cap. So how many stable coins are currently floating this is going down that tends to be a pretty constant trend this year. This is stable coin market cap relative to the US money supply.

[00:01:43]When this is going up then that's a good thing. That's when prices tend to go up.

[00:01:48]At the bottom we see cryptos market cap excluding stable coins. Now in October of last year the growth has stopped and so since then the crypto market was struggling. It peaked exactly when the inflows stopped and unfortunately for one month we now see net outflows. We are not anymore in the sidewards trading range. We are breaking out of this. Now why does this matter? It matters because the stable coin market cap measures how much money is flowing in and out of the system. When you are moving your hard-earned fiat currency from your bank account to a centralized exchange, that centralized exchange is going to send over those funds to a stable coin custodian. And the stable coin custodian is going to mint those tokens on the chain. If you pull your money out of crypto and you want to get a bank deposit, then those stable coins get burnt. How can we expect long-term appreciating crypto prices when the stable coin market cap goes down? This is really the fundamental crux of the situation. We need to see inflows for prices to go up. If we don't see inflows or even outflows, then prices tend to go down. And then really does it matter that much if Bitcoin goes down a bit less compared to Ethereum and how the assets are doing relative to each other?

[00:03:10]Maybe not really. At least if you don't trade relative valuations. If you just buy and hold crypto assets, it's probably better just to go with the flow. And that flow is currently not towards crypto. It's the opposite, unfortunately. Now, I don't like to make those kind of videos, but I like to keep it real. I tell myself there are a few people watching here that have been around for several years and that will remember videos like this. When everybody else is hyper bullish, when everybody says that Bitcoin cannot fall further because it already lost 50%.

[00:03:43]Then I might post the unpopular opinion over here. But this is not a popularity contest. This is a competition of who interprets the data more accurately. If it's your first time here, feel free to subscribe. I publish this regularly. A like would be very much appreciated as well. It helps the channel grow. Feel free to also check out the premium membership. There is a 7-day money back guarantee for that that pops up on the screen over here. See you next time.

[00:04:06]Cheers.