Big Coin Technicals and Today’s Rally: A Market Cap Normalization — Ethereum (ETH), Ripple (XRP), Litecoin (LTC), Total Market Cap

February 8, 2019 / by Bill Noble

Naturally, the big question is what created today’s rally. It could be that depression had reached such a point that a rally was inevitable. Today could also mark a turning point. People may have rediscovered that crypto does, in fact, have a value proposition. Said differently, perhaps people have regained their perspective.

It could also be the Chinese New Year bottom.

On a simple level, today may have just been a reordering of rankings on the market cap chart (Source: Coinmarketcap.com).

As of midday, Ethereum (ETH) and Ripple (XRP) now have the same market. Ripple’s (XRP) market cap was above Ethereum’s (ETH) market cap for a while. That didn’t seem to make much sense. It seemed that Ethereum was poised to catch a rally to its peers.

 class= Source: Coinmarketcap.com

In addition, we see the midday market cap chart has Litecoin (LTC) and EOS above Bitcoin Cash (BCH). Since we are not Bitcoin Cash (BCH) fans and Litecoin (LTC) has a use case, it seems logical that market cap should look this way. Then again, the Litecoin (LTC) rally seems overdone, and Litecoin (LTC) is staring at two-ply resistance at $43 (Figure 2).

 class= Figure 2

While this rally appears to be good news, there is a chart that hints at skepticism. Looking at the Fib circle analysis of total market cap, today’s rally may be a repeat of the fakeout false that preceded the big drop back in November (Figure 3). In the November case, it was a two-day rally.

 class= Figure 3

Bottom Line: Relief from yesterday’s depression is likely feeding today’s euphoria. It may be best to wait to see if crypto and Bitcoin (BTC) can prove itself worthy. It’s not a bull market until you can successfully buy dips. Speaking of success, the Crypto.IQ Trading Desk was all over this move.

Join me as they continue to impress with their timing and discipline.