The cryptocurrency market’s optimistic expectations continue. Accordingly, the total market value has been showing an increase along an ascending support trend line since October. Most recently, on December 18th, the data jumped above the trend line and started an uptrend. This development led to a new annual peak of 1.65 trillion dollars on December 24th.
Total Market Value Analysis
The upward movement in the total market value caused a breakout above the 1.60 trillion dollar resistance area, which is likely to provide support now. The 1.60 trillion dollar level is both a horizontal area and a 0.382 Fibonacci retracement resistance level.
However, the RSI is showing some signs of decline, which is causing concern. Market investors use the RSI level as a momentum indicator to determine overbought or oversold conditions and decide whether to accumulate or sell an asset. Levels above 50 and an upward trend indicate that investors are still at an advantage, while levels below 50 indicate the opposite.
The RSI level continues to rise and, despite being above 50, a bearish divergence is forming. A bearish divergence occurs when an increase in value is accompanied by a decrease in momentum. Nevertheless, if the total market value does not close below 1.60 trillion dollars, the trend can be considered bullish. The next resistance is 15% above the current level of 1.87 trillion dollars.
Despite this bullish forecast for the total market value, a break of the ascending support trend line could potentially lead to a 13% drop to the 1.41 trillion dollar level, which is the 0.382 Fibonacci retracement support level.
Bitcoin Chart Analysis
Like the total market value, the price of Bitcoin has also been increasing along an ascending support trend line since October. Unlike the total market value, Bitcoin’s price did not reach a new high for the year. Instead, it formed a lower peak on December 22nd and fell.
Moreover, the price continues to trade within an ascending parallel channel, which is often considered a corrective formation. Bitcoin is currently trading on the long-term ascending support trend line.
If the resistance breaks, Bitcoin could fall by 14% to the 37,200 dollar level, which is the 0.382 Fibonacci retracement support. On the other hand, a bounce off the support trend line and a breakout from the channel could trigger a 17% increase to the next resistance at 50,000 dollars.
