General Market Overview

Market Cap: $121,807,021,428 • 24h Vol: $24,759,467,157 • BTC Dominance: 52.9%

From Monday when the evaluation of the cryptocurrency market cap has been around $113,5 billion and has mostly hovered around those levels until Wednesday when it fell to the horizontal support at around $111,5 billion.

As the evaluation interacted with the horizontal support level for the second time it has retested and validated the presence of support which led to a bounce from the level and another retest yesterday when the evaluation came down to $111,215,000,000 at its lowest point.

Since yesterday’s interaction, the price has started increasing impulsively and as the momentum behind the move was strong both of the horizontal resistance line’s were broken and the evaluation came back to retest it for support, and judging by the current the support is where since the evaluation is staring another upward trajectory currently sitting at $121,738,107,086.

Bitcoin’s market dominance has conversely been decreasing as it came down from 53.78% at its highest point of the week on Wednesday to 52.83% at its lowest point today.

For those familiar with my work I have always stated that the evaluation of Bitcoin’s market dominance serves as an inverse indicator of the market’s sentiment – if we are seeing the depreciation of Bitcoin’s market dominance that means that the market participants are feeling confident and are most likely buying altcoins with their Bitcoin in an attempt to make more money, but if the Bitcoin’s market dominance increases that would indicate a bearish sentiment as investors are most likely selling their altcoin positions for Bitcoin in order to then sell their Bitcoin for fiat or a stable-coin in an attempt to preserve their capital against further market depreciation.

The market is green today with an average percentage of change among the top 100 coins ranging from 2.8-5.36%.

Even though there weren’t any significant headlines over the week that were impacting the market and especially considering we have seen the recent increase which you would expect to see for the fundamental reasons, but the reasons are most likely price action based.

The most notable headlines this week were the following. In the first category, we can fit the real numbers and fact regarding the state of affairs in the crypto industry. The first in line is the report by Diar which has shed some light at the trading activity in the current market.

Report: Crypto Exchanges Experience Lowest Trading Volumes Since 2017

>Trading volumes on cryptocurrency exchanges have dipped to new lows in January, according to an analysis published by crypto and blockchain research firm Diar on Feb. 4.

Since the beginning of the year, digital currency exchanges have reportedly registered lower trading volumes, marking new lows that have not been recorded since 2017. Diar further notes that it has turned to be the worst period for the world’s leading crypto exchange by adjusted trading volume, Binance, as its Bitcoin (BTC)/U.S. dollar (USD) market reduced by more than 40 percent in comparison to December 2018.

As for the major American cryptocurrency exchange Coinbase, its BTC/USD market is purportedly also experiencing lows which have not been seen since May 2017, at around $1 billion.

This headline is of significance as it goes to show the fact that the majority of the speculative capital has left the market and the ones who are left are trading that much.

Six UAE and Saudi Arabian Banks Join Digital Currency Cross-Border Transaction Project

>Six commercial banks from Saudi Arabia and the United Arab Emirates (UAE) have joined a digital currency project, major Saudi Arabian financial news portal Argaam reports on Feb. 5

Referring to comments from the UAE central bank (UAECB), Agraam notes that the goal of the project is to use cryptocurrency for financing transactions between Saudi Arabia and the UAE

Multiple Saudi Arabia and UAE Commercial Banks Join Cross-Border Crypto Transaction Network

UAE to Discuss Blockchain and Digital Assets at 7th World Government Summit

The Ministry of Finance (MoF) of the United Arab Emirates (UAE) will discuss the development of blockchain and digital assets in the country’s economy at the 7th World Government Summit. The news was reported by business news outlet the Gulf Today on Feb. 7.

7th World Government Summit Held In UAE to Talk About Blockchain and Cryptocurrencies

Russia to Implement Blockchain Tech in University Exam for Education Quality Control

The Russian Federal Service for Supervision in the Sphere of Education and Science, (Rosobrnadzor) will implement blockchain technology in the country’s main graduation examination, major Russian news agency TASS reports Feb. 5.

Russia's Rosobrnadzor to Implement Blockchain for University's Unified State Exam Graduation

Canada: Blockchain Association Merges with Chamber of Digital Commerce

Canada’s largest blockchain trade association, the Chamber of Digital Commerce has united with the Blockchain Association of Canada (BAC), which will now go by the Chamber of Digital Commerce Canada. The merger was announced in a press release posted on the Chamber of Digital Commerce website on Feb 5.

The Chamber of Digital Commerce Requests US Government to Craft Blockchain Action Plan

Wall Street Blockchain Alliance Joins Enterprise Blockchain Consortium R3

>The Wall Street Blockchain Alliance (WSBA) has joined blockchain consortium R3 to develop applications and solutions on their Corda platform, a Feb. 5 press release reports.

According to a statement made by the CEO of R3, David E. Rutter, the WSBA and R3 will collaborate in order to “advocate a strategic approach to collaborating with regulatory bodies so that financial markets, and beyond can gain the full benefits of blockchain’s capabilities.”

The WSBA is a non-profit trade association that promotes the general adoption of blockchain technology and crypto assets across international markets.

R3 Corda Blockchain Consortium Partners With The Wall Street Blockchain Alliance

We can see that the major players are more and more starting to implement the blockchain technology in fin-tech especially and the adoption rate has been steadily increasing now especially among the big players as they are taking the advantage of the usefulness of the technology.

From the start of the week on Monday 4th when the price of Bitcoin was $3506 at the open at the 0.618 Fibonacci level (blue), the price has been stuck in a horizontal range as it was in the second wave to the downside which was in time labeled as the impulsive 2nd wave as I was expecting another move to the downside like we have seen other times when the price broke out from the minor ascending channel.

The intersection between the falling wedge support and the horizontal support zone to $3340 was of interest for the potential ending point of the Minot WXYXZ correction but the correction ended on the same horizontal support level as the prior low at $3430.

When the Minor correction ended that meant that the Intermediate X wave ended ad the impulsive move the upside was expected which is what happened so in this analysis we are going to examine how further up will the price of Bitcoin go before a retracement and could this be the bottom of the bear market?

Zooming into the 4-hour chart we can see that the price of Bitcoin has broken out impulsively from the falling wedge in which it was correcting from 24th of December when the first impulsive move to the upside appeared.

The current impulsive move to the upside is a continuation of that recovery as it is the WXY Intermediate correction to the upside after an impulsive 12345 move to the downside from when the price of Bitcoin was at around $6500.

Because this move is only corrective in nature after it ends more downside would be expected for the price of Bitcoin which makes the likelihood of a bottom low. We might see a retracement back to the same levels on which the lowest point from the start of the bear market is at around $3230 as we have seen now on a lower time frame, but first, let's look at how far the price of Bitcoin could go before that happens.

You can see the projected ghost bar candles are interacting with the bold black line which is the most significant resistance point to the upside. That was previously the baseline support line from the start of the bear market which was broken on the mentioned impulsive move to the downside from $6500 area.

The Intermediate WXY correction is most likely a retest of the prior support for the resistance and that confirmes the W wave ending point which ended as a rejection at that level which is what I believe will happen in the case of the Y wave. We might see a quick peek above it for interaction with the horizontal resistance level at $3994.

Since the X wave ended slightly higher than the beginning of the W wave, we might see the Y wave slightly higher than the W wave.

Zooming out into the daily chart you can see that there is a possibility of the Bitcoin’s price recovering all the way up to $4811 where the descending triangle’s resistance line is. This descending triangle has been the main corrective structure since the start of the bear market and his outline was well respected and retested numerous times until we have seen a breakout to the downside on 21th of November.

This triangle consists of three Minor corrections which are the WXY of the Intermediate count and the Y wave from a Cycle count (blue). If the Cycle Y wave ending on the previous downfall then we are seeing the development of the Intermediate WXY to the upside which would be the second wave X from the Cycle count. If this is true that the price could very likely go to the mentioned levels.

The other scenario would be that the Cycle wave Y hasn’t ended and that we are seeing the continuation of the previous Intermediate WXY out of which the currently labeled Interstate WXY would be the second X wave. In that case, the target for the Y wave would be at the prior baseline support now serving as resistance and the price would head for another low as then the Z wave should start developing, ending potentially at $2926 horizontal level. This would be the end of the Cycle wave Y and then the second X wave would start.

In either way, in the upcoming period, I would be expecting more upside for the price of Bitcoin.

Bitcoin is in the buy zone as indicated by the 4-hour chart technicals with moving averages signaling a strong buy.

Pivot points

The positive sentiment is starting to overrule the market both in price action and in the news. We are seeing the start of the expected recovery which is most likely going to last by the end of the next week and with small retracements along the way. The cryptocurrency market is headed for some more green days but that period is limited since this is an only correctional recovery before we are to see new lows for the prices and the market in general.

The speculative capital has been leaving the market which is a good thing so the underperforming projects that were relying on the hype are going down the total shakeout will occur before we see the market bottom out.

In the meantime, people are catching up and the adoption rate is going up as well as the technological improvements of the blockchain technology itself and the number of services is constantly increasing in an attempt to ease of the onboarding process for the new potential users which are a good thing.

The utility is going up and the technology is catching up which is why ultimately the new spark of interest will be ignited in the near future so unlike the last time the general public was interested in the cryptos this time the promise of the making money isn’t going to be enough which is why the industry needs to be ready for the influx of new users.

This would only bring maturity to the market and help it push toward global recognition and acceptance.

Disclaimer: Author analysis is not meant to be investment advice. Do your own research.

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