Conflicting Signals: The Big Difference Between Bitcoin And Crypto Charts
Recent comments by SEC Chairman Gary Gensler suggest that Bitcoin is the only crypto asset that is not a security. However, for some reason, the TOTAL crypto market capitalization chart is giving a bullish signal, while the BTCUSD chart remains decidedly bearish.
Let’s take a closer look at these conflicting signals being fired in the cryptocurrency market and what they might mean.
50/50: Breaking Bearish or Bullish Signals
Last night, the February monthly candle came to an end, providing fresh data for technical analysts to look at. Technical indicators use the data in their calculations, which are also updated the moment a new monthly candle opens on the chart.
When scanning the monthly price charts for Bitcoin, Ethereum and dozens of other cryptocurrencies, there is a noticeable discrepancy between the one-month BTCUSD chart and the TOTAL crypto market capitalization chart over the same period.
The 50-month moving average discrepancies observed | BTCUSD on TradingView.com
Activating the 50-month moving average, Bitcoin closed its second month below the key resistance level. Meanwhile, the TOTAL cryptocurrency chart has spent the past two months above the same level. Price action maintained above it could result in a sustained recovery.
It’s not just the 50-month moving average showing the conflicting signals. The BTCUSD monthly Ichimoku closed through the cloud, while the TOTAL cryptocurrency chart is nowhere 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 the price charts is due to the strong performance of small-cap altcoins. Many of these less liquid coins rallied well above their 50-month moving average, giving the TOTAL cryptocurrency chart an edge.
The TOTAL crypto market capitalization chart is an aggregate created by TradingView, pulling price data for thousands of crypto assets traded on the platform. The exact number of coins aggregated is unknown and may or may not reflect the exact size of the rapidly growing market.
Bitcoin, on the other hand, is simply an asset, making its chart signals much clearer and more actionable. The leading cryptocurrency also has the ability to move the entire market, taking the wind out of any altcoin rally or saving them from the brink of extinction.
Watching the Bitcoin chart for the all-clear signal is a safer bet, but the cryptocurrency’s TOTAL market cap being a more sensitive aggregate of price action can provide an early taste of things to come. Will BTCUSD follow suit and strengthen broader crypto recovery?
The Tale of Two Graphics: #Bitcoin below the 50-month MA, $TOTAL crypto above it. pic.twitter.com/bdGrkQ0axM
— Tony “The Bull” (@tonythebullBTC) March 2, 2023