The total market capitalization of the cryptocurrency industry reached a high of $774 billion on January 5, 2018. It has been decreasing since and has not approached those highs. The closest it has come has been on June 26, 2019, with a high of $338 billion.
The decrease succeeding the high in January 2018 and the one on June 26 have been eerily similar, especially when looking at the pattern in which both have developed and the proximity to a long-standing support line.
Cryptocurrency analyst @davthewave outlined the decrease in the aforementioned periods and pointed out the similarities
— dave the wave (@davthewave) October 15, 2019
Additionally, the market cap is approaching the curved support line, which has been in place since 2015.
Let’s take a closer look at these two movements and analyze the possible similarities.
The first similarity comes when we look at the RSI in the weekly time-frame.
Both the January 2018 and the June 2019 highs were marked by a double top created in the overbought region in the RSI.
Afterward, the price began the descent inside the descending channel, which in 2018 continued until the price reached the support line, while it is ongoing in the current decrease.
At the current time, the price has almost reached the support line.
Another similarity arises when we look at the weekly moving averages (MA).
During the 2018 descending channel, the price initially decreased below before finding support above the 200-week MA, which coincided with the support line.
In the current movement, the price seems to have found support above the 50-week MA, which is coinciding with the ascending green support line.
If the price follows the pattern laid out in 2018, the price will initially decrease before finding support above the 50-week MA and trading without significant volatility throughout 2019.
BeInCrypto discussed this possibility in our long-term price prediction.
Do you think the market cap will follow the pattern laid out in 2018? Let us know your thoughts in the comments below.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images are courtesy of Shutterstock, TradingView.