All You Need to Know
In the current period, we live in the rise of Altcoin, an outstanding part of the crypto cycle. With many analysts talking about the Total 3 chart, I had an idea to uncover the greatness of this chart, especially nowadays. So bring your cup of coffee and come with me.
The Total 3 chart is a powerful tool for understanding the health of the cryptocurrency market. Unlike traditional charts focused on Bitcoin or Ethereum, the Total 3 chart excludes these giants and tracks the total market capitalization of all other altcoins.
This provides traders and investors with valuable insights into the performance and trends of smaller cryptocurrencies.
Here’s everything you need to know about the Total 3 chart:
As I mentioned before, the Total 3 chart represents the total market cap of all cryptocurrencies except Bitcoin (BTC) and Ethereum (ETH). It highlights the strength of altcoins and provides a clearer picture of how the broader crypto market is performing without the influence of the two largest players.
By focusing on altcoins, the Total 3 chart allows investors to assess market trends, identify emerging opportunities, and gauge the sentiment in the altcoin space.
The Total 3 chart is a unique and vital tool in crypto analysis because it focuses exclusively on altcoins, excluding Bitcoin and Ethereum. Here are the key reasons why this chart is important for traders and investors:
1. It Offers a Clear Picture of the Altcoin Market
Bitcoin and Ethereum dominate the crypto market, often overshadowing the performance of smaller altcoins. By excluding these two, the Total 3 chart shines a light on the collective performance of other cryptocurrencies, providing a clearer picture of the altcoin market’s health.
For example:
If the Total 3 chart is rising, it indicates strong growth in the altcoin space.
If it’s declining, it may signal waning interest or a shift of funds back into BTC and ETH.
2. Helps Identify “Alt Seasons”
An “alt season” refers to a period when altcoins outperform Bitcoin. Tracking the Total 3 chart alongside Bitcoin dominance can help identify these periods.
A rising Total 3 chart combined with falling Bitcoin dominance suggests that capital is flowing from Bitcoin into altcoins. This is often a lucrative time for altcoin traders.
Conversely, if Bitcoin dominance rises and Total 3 declines, it may signal that investors are retreating to Bitcoin as a safer asset.
3. Tracks Broader Market Sentiment
The crypto market’s sentiment often fluctuates. The Total 3 chart acts as a barometer for how investors feel about smaller cryptocurrencies:
Bullish Sentiment: When the Total 3 chart trends upward, it indicates optimism and risk-taking behavior.
Bearish Sentiment: A downward trend often reflects risk aversion, with investors pulling funds out of altcoins and into Bitcoin, stablecoins, or fiat currencies.
4. Useful for Portfolio Management
Investors who hold a diversified portfolio of altcoins can use the Total 3 chart as a benchmark.
If your portfolio performs better than the Total 3 chart, it suggests good asset selection.
Underperformance may indicate the need for adjustments or diversification.
5. Helps Detect Market Shifts
The Total 3 chart is particularly useful in spotting key market shifts, such as:
Capital Rotation: Identifying when funds are moving between altcoins and Bitcoin.
New Trends: Early identification of bullish trends in altcoins can lead to profitable trades.
6. Complements Other Charts
While Bitcoin dominance and Total 2 charts (excluding Bitcoin but including Ethereum) are helpful, the Total 3 chart provides a distinct advantage by focusing solely on smaller players.
3. How to Use the Total 3 Chart for Analysis
As I just mentioned, identify Trends: Look for uptrends or downtrends to spot bullish or bearish sentiment in the altcoin market.
Support and Resistance Levels: Use these levels to predict possible price movements and make informed trading decisions.
Correlation with BTC Dominance: Compare the Total 3 chart with Bitcoin dominance. A rising Total 3 chart alongside falling Bitcoin dominance often signals an “alt season” where altcoins outperform Bitcoin.
Platforms like TradingView and CoinMarketCap allow users to access the Total 3 chart with customizable indicators.
Pair it with volume and RSI indicators for a more comprehensive analysis.
The Total 3 chart is an essential resource for any crypto trader or investor focusing on altcoins.
It provides a unique perspective on market movements and helps identify opportunities in the dynamic world of cryptocurrencies. Whether you’re planning to trade or hold, keeping an eye on this chart can significantly improve your strategy.
Stay informed and leverage the Total 3 chart to navigate the evolving altcoin landscape!
