simply put
The cryptocurrency market capitalization (TOTALCAP) has been declining since the bearish candlestick was created on October 2.
Bitcoin (BTC) price is moving away from the $28,000 resistance area. It is attempting to break out again.
Avalanche (AVAX) surged in early October but has declined since October 7.
Both the cryptocurrency market capitalization (TOTALCAP) and Bitcoin (BTC) price have fallen since October 2. Avalanche (AVAX) reached a high on October 7 but has fallen sharply since then.
Binance and OKX exchanges have restructured their cryptocurrency businesses to comply with regulations from the UK’s Financial Conduct Authority ( FCA ).
Crypto market capitalization creates bearish candlestick
The cryptocurrency market capitalization has been rising since rebounding from the $1 trillion support level on September 11. The uptrend resulted in a breakout of the descending resistance trendline on September 18.
On September 25, the price briefly dropped, confirming the importance of the trendline (green icon). However, since then, TOTALCAP has accelerated its upward pace and reached a peak of $1.10 trillion on October 2.
On the same day, a bearish candlestick pattern emerged (red icon), and since then, the price has been on a downward trajectory.
Comparing the peak on October 2nd to the high on August 29th, we can see that it represents a divergence (red line) followed by a decline. Such divergences usually precede large price reversals.
If this downtrend continues, the $1 trillion support area would be about 7% below the current price. Conversely, a 5% gain would be needed to reach the next resistance level at $1.13 trillion.
Bitcoin falls after divergence
On September 28, BTC price also broke above the descending resistance trendline. It reached a high of $28,580 four days later. This high is gradually higher than the high of August 29.
The price subsequently declined, forming a long upper shadow, which is considered a sign of selling pressure. This also led to a divergence above the $28,000 resistance area (red line).
BTC price is currently attempting to break out of the $28,000 resistance area.
If Bitcoin breaks out, it can also rise by another 6% to $29,500. On the other hand, a rejection could result in a 5% drop to the descending resistance trendline at $26,000.
AVAX creates huge upper wick
AVAX price broke out of the descending resistance trendline on September 25 and subsequently accelerated upwards, hitting a high of $11.88 on October 7.
The rise could not be sustained and the price formed a long upper shadow (red icon). It has been declining since then.
If the decline continues, the nearest support area will be $9.20, which is 8% below the current price. On the other hand, if the upside regains momentum, a 25% increase to the $12.30 resistance area is possible.