Crypto Total Market Cap Breakout/Fakeout
The downtrend in blue has just been breached and we see a very rapid and sharp increase in over these past few months. This could be read as a potential capitulation/accumulation signal.
Ideal longs were placed and entered 2-3 months ago for swing trading with BTC around $3,500 level, ETH under $120, and LTC under $30, but traders waiting for technical signals that confirm the breakout to enter should watch closely.
There is a moderate risk that this could also be a "fake-out" breakout by the market maker so make sure we see some real onthe break before entering any sizeable positions. A fall back under the trend-line with no to back up the break could leave a lot of margin longs with their pants down.
As always, D.Y.O.R. and happy trading!
As is turns out; looking at the weekly chart we can see that these levels also coincide with the 20 and 200 EMA support and resistance levels and that price is currently squeezed in between them.
In technical analysis the 20 and 200 serve as some of the most often respected technical signals out there ( the 200 especially offering strong resistance and support depending on the context due to its weight). The total market cap has bounced off of and rallied above the weekly 200 EMA (in dark red) which was hovering around $130,000,000,000 but has yet to break the resistance of the 20 (in blue) at $139,500,000,000-ish.
While we have broken above the linear downtrend line on the short-term; I believe the 20 EMA will prove to be the real resistance and test of strength for the bulls of crypto.
Looking at technical indicators; RSI is above 50 at a value of 61 and still on a firm uptrend. We are coming off from a spike to 70-80 which could be a signal for either potentially overbought or strong trending conditions; however I see no bearish divergences yet to speak of so it could go for another round in my opinion.
ADX/DMI is coming off of a strong spike during the break of the $6,000 level for bitcoin shown here in November as the drop from $200,000,000,000 to $100,000,000,000. Currently though, ADX shows neutral/no-trend since all values are low and under 20; however one of those DMI+/- look as if they are about to take hold and turn up to create a new trend. Which way I will leave for you to decide. Will we experience resistance at the 20 and break down catching all the fomo-longers or will margin shorts be caught squeezed and blind-sided by the bull breakout?
Good luck and happy trading!
Potential fractal spotted by me and charted by SBTrading based on this original idea by him in January. Just something to keep in mind.
"Wall of Worry" or "Anxiety"