The beginning of 2018 is proving to be rough for the entire cryptomarket. In terms of total market capitalization, the cryptomarket recorded a year-high of $645 billion in 2017 before crashing to the $470 billion level on December 22. This December market crash coincides with the major price drop of Bitcoin from the $20,000-level to $13,700, followed by a widespread decline in altcoin prices. As though recovering, total market capitalization then pushed up to the record-high $831 billion level on January 7 and slowly declined to the $709 billion level before plummeting to the $440 billion level on January 17, marking the first major correction in 2018.
The implication of increase and decrease in total market capitalization is that as money is moved out of the cryptomarket in general, prices of tokens decrease. The opposite happens when money is moved in to the market, increasing the total market capitalization.
As of the writing of this article, the market is briefly recovering, and is settling on the $550 billion level. Most coins are now stabilizing in price, but have not yet fully recovered from the January 17 slump. Nothing is certain at this point, however, as market capitalization is still in fluctuation. We may see bullish signs in the market once the $580 to $600 billion level is breached.
Bitcoin has successfully bounced from the $9950 support mark yesterday (January 23), and is seemingly forming a faint bullish reversal candle currently trading at the $11,300 level. Recent candles in the last two days are forming a tightening of price action, which means that Bitcoin prices are nearing a breakout point. As prices gradually reach equilibrium point, the Bitcoin market will have to decide whether to break into a bullish pattern, or continue the bearish trend to even lower lows.
Ethereum, on the other hand, is trading at a much more horizontal pattern compared to Bitcoin. After its plummet during the January 17 crash, it has steadily bounced on the $950 support level and $1100 resistance level.
ETH appears to be in consolidation phase and is in preparation for its next move. A successful close above the $1150 resistance level will most probably start another bullish run for Ether’s price. Once over the $1150 level, ETH may try the next resistance level and psychological barrier at $1200. If, however, ETH fails to hold at the $950 support level, we may see another bearish run, hitting the next resistance level at $900 and $850 levels.