The total crypto market cap (TOTALCAP) and the price of Bitcoin (BTC) experienced a significant increase yesterday, but their long-term trends remain uncertain. What caused the rise in the total cryptocurrency market cap? What are the potential consequences of this increase?
Tech giant company MicroStrategy has released its second quarterly earnings report, stating a profit of $22.2 million. The company also announced plans to sell stocks to buy more Bitcoin.
The total cryptocurrency market cap has been declining since July 13. The decline reached its peak on August 1 with a $1.11 trillion drop. This apparently led to a break in the $1.12 trillion support level.
However, the price then sharply rebounded and confirmed the $1.12 trillion area as support, creating an upward pattern. If the increase continues, the next nearest support area could be $1.18 trillion. On the other hand, experts believe that if the price falls, breaking the $1.08 trillion support is likely.
This represents a 6.30% decline from the current price. The price of BTC, the flagship of the crypto markets, has fallen into a descending parallel channel since reaching its highest level of the year at $31,800 on July 13. The value loss peaked on August 1 with a $28,585 decline in BTC.
The BTC price then rebounded and confirmed the middle line of the channel as support. As channels are considered corrective patterns, a breakout from the pattern could be the most likely outcome in the future. The cryptocurrency failed to surpass the $29,800 resistance area when it moved on August 1. If the pattern is realized or rejected, it could potentially determine the future trend. A possible breakout could push the price to around $31,500, its annual high, while rejection and decline could cause it to drop to $28,000.