After a brief pause, the carnage is continuing. Almost all of the biggest cryptocurrencies have today hit all- fresh 2018 lows. The move below $3,400 for Bitcoin (BTC) has translated into the market cap dropping below $60 billion.
For reference, Bitcoin’s market capitalization hit the all-time high on January 06 with the value of more than $294 billion.
Ethereum (ETH) is down to $83 after the breach of the psychologically important $100 handle yesterday, while Litecoin (LTC) is trading below $25 for the first time since June 2017. Overall, the crypto market has lost about $16 billion of its valuation overnight. Another leg lower, and the market cap will fall below $100 billion for the first time since July 2017.
Picture 1. Total Cryptocurrency Market Capitalization (Source: Coinmarketcap.com)
Last week, Newconomy published a piece on Bitcoin’s price analysis, in which we correctly inferred that a:
“Failure to regain level around $4,300 will likely result in a new swing lower, and even possibly a test of the big support at $3,000”.
Although the BTC made a $4,488 high, it did not manage to close above the resistance, thus it failed at the horizontal resistance (previous support).
Graph 1. Bitcoin (BTCUSD) daily chart
As seen in the daily chart (Graph 1), the BTC price left the consolidating wedge today and it is on the way to test the key horizontal support (the blue horizontal line), around the $3,000 mark. This zone could prove to be the biggest support the bulls would eventually face since successfully clearing the support around $6,000.
Below the horizontal support lies also the 161.8% Fibonacci extension support, but it is unlikely to see BTC drop below $2,400. However, the possibility of the biggest coin breaching and closing below $3,000 is likely to trigger another round of sell-off.
The biggest digital currency currently trades around the $3,400 handle.