The total cryptocurrency market cap today is $191 billion with just a
little over $500 million more in total trading volume from yesterday at $12.35
billion. After Bitcoin’s market dominance hit 58% yesterday, this number has now retreated to 57%.
The biggest story has
to be Ethereum hitting lows not seen since July of 2017 when it hit $167 yesterday. The recent crash can be attributed to many factors and it is important to know why before participating
in this sell-off.
It has been reported that Ethereum and EOS only
have about 300 active users amongst 8 decentralized applications.
Vitalik Buterin has said there are still a lot of steps to
take to further prevent Ethereum’s downfall.
Ethereum’s price is decoupling from Bitcoin
(Ethereum goes down but Bitcoin stays the same or goes up).
ICO treasuries have just dumped about $30
million in ETH just this past week alone with $600 million more to dump in
75% of the decentralized applications on the
network are basically CryptoKitties, casino games, and worthless coins, the
other 25% are decentralized exchanges in which no one uses them, according to economist
Finally, yesterday’s ruling by a New York
Federal judge claims that ICOs should be regulated as securities.
All of these elements have contributed
to Ethereum’s price crash, and in honorable mention, EOS had a ridiculous
amount of Ethereum raised for its ICOs which had contributed to a sell-off of
their own. My point is this: There has been a lot of fear in the overall market
and now especially with Ethereum. The benefit of being the #2 coin in the world
is that you’re right behind the #1 coin in Bitcoin. But at the same time, the
drawback of being the #2 coin is that you’re right behind the #1 coin in
Bitcoin which means everyone is going to extremely critical of your move. I
have been saying that Ethereum’s technology cannot keep up with its trading
price and this is exactly what is happening. People are too focused on what Ethereum
is trading at and forget that it takes months if not years to develop the solid
products. Yes, the price per Ether is extremely low but the real importance is
to allow Ethereum to fully develop before casting judgements.
Cryptocurrencies are far from over and
that even though this bubble has burst even worse than the dotcom bubble, I don’t
think we are finished yet. In fact, we haven’t even begun. The total
cryptocurrency market has dropped from $832 billion to $189 billion in the
matter of 9 months, so if we were to compare the 2, the dotcom bubble’s
recovery took almost a decade but cryptocurrencies have almost finished their
cycle. There is still a lot to look forward too. There is too much at stake and
too many great minds trying to tackle some of the world’s greatest financial technological
problems. Of course, this is going to take longer than what it takes to day
BTC’s daily chart is showing
the downward trend may not be over. There is a descending triangle pattern that
is strong stemming from all the way in January. A breakout downwards is likely
and only twice in the past 9 months did price action actually deviate from this
downward trend line. RSI is still below 40 RSI so this is a sign that Bitcoin
is still bearish. Currently it’s trading at $6338 but the price looks like it’s
going to continue downwards. Short-term resistance is $6419, mid-term
resistance is $6607, and long-term resistance is $6910 while looking at the 4
hour charts. Short-term support is $6106, mid-term support is $5780 and
long-term support is $5400.
Ethereum is trading at $183.58 but was trading at $174 earlier which was down
over 10% from yesterday’s high of $200. The outlook for Ethereum is still
bearish after breaking long-term support at $205. Because it broke there, the
next level on the Fibonacci extension is $133. RSI on the daily chart is extremely
oversold at 19 RSI so a bounce up is imminent but time is unknown. There is
still massive divergence downwards between the 8-day EMA and the 20-day EMA so
this trend is not expected to change very much in the short-term. Short-term
resistance is now $205, mid-term resistance is $250, long-term resistance is
$322. Because support has not been truly established yet, short-term support is
unclear, mid-term support is $133 and long-term support is $66.