Cryptocurrency Market Cap to Head to $246 Billion?
As BTC-USD reaches new all-time highs, the cryptocurrency market as a whole has attained a new milestone; breaching $200 billion in value.
Bitcoin is leading the charge, with the cryptocurrency moving above the $7000 psychological level on November 2. Looking at the chart below, we see a clear pattern of five waves as detailed by Elliot Wave Theory. The market dynamics suggest that the current wave, wave 5, will reach a top somewhere near $246.72 billion before a three-stage corrective period.
Traders using Elliot Wave Theory are renowned for their preciseness, as well as their infrequent entries into the markets. The theory is based on the concept of crowd behavior and psychology, and builds on top of the idea of fractals. By noticing the similarities between fractals, infinitely self-repeating structures on an ever smaller scale, and stock market movements, Ralph Nelson Elliot presented his idea to the world in the 1920’s. By using the patterns in the stock markets, he found a way to make predictions based off of these waves in the market, which also conform to the golden ratio found in nature and described by the Fibonacci sequence.
What is the outlook for bitcoin now it has reached a new plateau? The monthly chart for BTC-USD below shows that in October bulls dominated, with a green Marubozu candlestick displayed. The bullish trend is suggested to remain intact even if the market dips as low as $4326.09, the opening level of October’s candlestick. Furthermore, another important support stands at the 50 percent level of the candlestick’s body, namely at $5380.15.
Bullish momentum is suggested to remain strong, as the Awesome Oscillator remains concave, but when the indicator starts to display a convex shape, this will indicate that the upward momentum may start to slow down.
The weekly chart for BTC-USD is shown below and signals that a weekly close above the 161.8 percent Fibonacci extension level at $6926.54 opens up the extension level at $10,076.44. Moreover, notice the gradient of the conversion line (blue) and Ichimoku cloud. Both are almost vertical, suggesting very strong bullish momentum on this timeframe. The market is now getting ready to establish a new fractal sell level (or resistance), which we anticipate near the $10,000 handle.
The upward surge has been driven by higher volumes, with bitcoin markets attracted more than $2 billion in the past 24 hours. Bitcoin Cash volumes are also increasing, which has driven the BCH-BTC pair closer to the 0.1000 handle. As noted in our weekly cryptocurrency market outlook on October 30, we anticipated a push through the Ichimoku cloud, and the cloud has changed color from red to green. The color change gives a bullish signal for the days ahead.
Other major altcoins have remained more or less stable, with ether hugging the $300 level and litecoin remaining near $55. The majority of the volume in crypto markets during the past 24 hours (more than 60 percent) is commanded by BTC and BCH, suggesting big moves are to be expected in the days ahead for bitcoin and bitcoin cash.