From yesterday’s height at $221,928,822,469 the cryptocurrency market capitalization has decreased by around 5.1 billion dollars in evaluation.
- Market Cap: $216,829,072,549
- 24h Vol: $11,478,937,811
- BTC Dominance: 52.3%
As you can see the evaluation has found support on the minor range judging by the quick bounce but as I said my yesterday’s post I am expecting the interaction to the descending channel’s support line around $215B.
Consequently, the market is in red with a small average percentage change among top 100 coins. There are a few double-digit gainers, Aeternity increased by 18%, Digitex Futures is up by 14,3%, ETERNAL TOKEN is up by 19% and Noah Coin by 16%.
There aren’t any significant news that is impacting the market right now, but there are two headlines that paint a bearish picture from the technical side of things.
First is a recent study from Juniper Research titled “The Future of Cryptocurrency: Bitcoin & Altcoin Trends & Challenges 2018-2023” in which he states that the cryptocurrency market could “implode” as the transaction volumes decrease. As reported by Bloomberg Juniper stated:
Based on activity during the first half of Q3, Juniper estimates a further 47 percent quarter-on-quarter drop in transaction values in that quarter […] In short, given our concerns around both the innate valuation of Bitcoin, and of the operating practices of many exchanges, we feel that the industry is on the brink of an implosion.
This ties up with the second headline regarding Bitcoin miners struggling to make a profit. According to Diar’s research miners paying retail electricity prices have shifted towards unprofitability for the first time this September. It is known than Bitcoin miners make 54,000 BTC each month for processing the mining blocks but miners also make money via users’ transaction fees and given that the price of Bitcoin has fallen along with the transaction volume this doesn’t come as a surprise.
Morgan Stanley analysts have also estimated that bitcoin miners lose money when the price is below $8,600. Analyst Charlie Chan even said that the break-even point may even be “a bit generous”, as his research team assumed a cost of electricity that comes in at just a few pennies per kilowatt hour.
Further, Morgan Stanley analysts believe “the bitcoin mining hardware demand and price will decline further.”
A dip in demand for the nuts and bolts of crypto mining would have and seems to be having, an impact on none other than Taiwan Semiconductor Manufacturing Company, which makes chips that are, among other things, used in cryptocurrency mining, which relies on powerful computers to produce bitcoin. The company trimmed its growth estimates earlier this week in part on the vagaries of the crypto market. Eventually, at a price of $5,000, some chip firms may break even over two years.
This situation for the crypto miners may cause them to sell their Bitcoin in order to pay electricity bills adding more selling pressure into the market paradoxically lowering their income further.
Bitcoin Price BTC/USD
From yesterday’s high at $6668 the price of Bitcoin has spiked down to $6516.5 but has recovered quickly and is now trading at $6586.
Click to Enlarge Chart
As you can see from the hourly chart above that spike was to retest the significant horizontal level and it looks like buyers are present judging by the wick and the sharpness of the recovery movement to the upside. In my yesterday’s post I sad that I am expecting the price to go and retest the symmetrical triangle’s resistance which is what happened right on the intersection with the horizontal support level which is very interesting. Now as I believe some at least temporary support is found the price is going to start increasing, but to how far we are yet to see as it has lots of significant resistance above its current position.
Bitcoin is in the sell zone.
Cardano Price ADA/USD
From yesterday’s high at $0.08817 the price of Cardano has fallen by 3,85% to the current levels of $0.08464.
Click to Enlarge Chart
Looking at the hourly chart below you can see that like in the case of Bitcoin the price found support on the uptrend support line which is also a support line from the symmetrical triangle pattern. As the price approaches the breakout area it is still unclear in which direction that would be. Both triangle resistance line and support line are steep enough to indicate aggressiveness from both sides which is why the triangle is symmetrical. The price action is also located in the median of the support range from $0.08924 and $0.07879 so I would consider those levels and there surpassing before calling in the direction of a breakout.
Cardano is in the sell zone.
After the price of Bitcoin broke the symmetrical triangle yesterday the price went back to prior resistance to retest it for support. As the support has been found that means that the price of Bitcoin could go up and that we are going to see the start of an uptrend.
However this small move compared to a massive decrease in price over the last months cannot be a sign of a corrective move to the upside, let alone a trend reversal.
Selling pressure may increase due to fundamental factors that were covered in the News section and the prices start to collapse from here. In any way a proper breakout is near and we are soon going to see what happens. Until then I wouldn’t suggest any trading with so much uncertainty.