Recent comments from SEC chair Gary Gensler suggest that Bitcoin is the only crypto asset that isn’t a security. Yet for whatever reason, the TOTAL crypto market cap chart is giving a bullish signal, while the BTCUSD chart remains decidedly bearish.
Let’s take a closer look at these conflicting signals firing across the crypto market and what it could possibly mean.
50/50: Breaking Down The Bearish Or Bullish Signals
Last night, the February monthly candle came to a close, providing fresh data for technical analysts to review. Technical indicators use the data in a their calculations, which are also updated the moment a new monthly candle opens on the chart.
Upon scanning the monthly price charts of Bitcoin, Ethereum, and dozens of other cryptocurrencies, a noticeable discrepancy exists between the BTCUSD one-month chart and the TOTAL crypto market cap chart on the same timeframe.
The 50-month moving average discrepancies observed | BTCUSD on TradingView.com
Turning on the 50-month moving average, Bitcoin closed its second month below the key resistance level. Meanwhile, the TOTAL crypto chart has spent the last two months above the same level. Price action holding above it could result in a sustained recovery.
It isn’t just the 50-month moving average showing the conflicting signals. The BTCUSD monthly Ichimoku closed through the cloud, while the TOTAL crypto chart isn’t even near the cloud yet.
The Ichimoku cloud adds to the confusion | BTCUSD on TradingView.com
Bitcoin, Not Crypto: A Rising Tide Lifts All Boats
The reason for the discrepancy in price charts is due to the strong performance in small cap altcoins. Many of these less liquid coins have pushed well above their 50-month moving average, giving an edge to the TOTAL crypto chart.
The TOTAL crypto market cap chart is an aggregate created by TradingView, pulling price data from thousands of crypto assets trading on the platform. The exact number of coins aggregated is unknown, and may or may not reflect the accurate size of the rapidly growing market.
Bitcoin, on the other-hand is simply one asset, making its chart signals much more clear and actionable. The top cryptocurrency also has the ability to move the entire market, taking the wind out of any soaring altcoin rallies or saving them from the brink of extinction.
Watching the Bitcoin chart for the all clear sign is a safer bet, but the TOTAL crypto market cap being a more sensitive aggregate of price action could provide an early taste of what’s to come. Will BTCUSD follow suit and strengthen the broader crypto recovery?
The tale of two charts: #Bitcoin below the 50-month MA, $TOTAL crypto above it. pic.twitter.com/bdGrkQ0axM
— Tony “The Bull” (@tonythebullBTC) March 2, 2023
Follow @TonyTheBullBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice. Featured image from iStockPhoto, Charts from TradingView.com
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Tony “The Bull”
Tony “The Bull” is a level 3 CMT student (passed level 1 & 2), technical analyst, Bitcoin supporter, and avid speculator. Tony is deeply fascinated by core market principles such as Elliott Wave Theory as they tie into mathematics like Fibonacci ratios. Market timing though DeMark indicators, Ichimoku, Gann tools, or Hurst Cycle Theory are also of key interest. Tony provides completely original content driven by exclusive, independent research. For more insights and education from Tony, check him out on Twitter or in his free TonyTradesBTC Telegram channel. Follow @TonyTheBullBTC on Twitter and search CoinChartist on YouTube.