It finally happened! The total market cap for the entire cryptocurrency market breached the magical $1 trillion threshold today, making it a day to put down in your diary to celebrate next year.
The majority of the market cap is dominated by BTC, which takes up around 67.7% of it all with a $713 billion market cap value. Ethereum is in the close second place with a $140 billion market cap.
While these two major cryptocurrencies continue to lead the way, many altcoins are also seeing major shifts upward.
For example, Binance Coin exploded by a strong 55% over the past month as its own market cap reached as high as $6.4 billion today.
Let me dig into some analysis of these three mentioned coins and highlight some support and resistance areas that we can expect coming ahead in Q1 2021.
Bitcoin (BTC) Price Analysis
BTC/USD - DAILY CHART
What Has Been Going On?
The growth of Bitcoin has been truly outstanding.
Over the past month, the number 1 ranked cryptocurrency managed to increase by a whopping 105% as it consistently set new All-Time High levels throughout the period. The most recent ATH came today (January 7th) as Bitcoin printed a height of $38,700. Judging by the bullish momentum within the market, the bullish swing is still far from over.
The bulk of the latest price hikes started on December 16th, when Bitcoin finally penetrated above the previous 2017-ATH level and passed the barrier at $20,000. Since then, the coin has continued to surge higher and is quickly approaching the $40,000 level.
As Bitcoin has never been anywhere near these heights before, the only tool we really have to analyze the market is the Fibonacci Extension tool. This will provide us with some levels above the market to estimate where the next few resistance areas might lie.
On the other side, the Fibonacci Retracement tool will provide some support areas when the market decides to pull back.
Bullish Levels:
- $39,425 - 1.272 Fib Extension - Orange
- $40,000 - Round Number Level
- $41,860 - 1.414 Fib Extension - Orange
- $43,500 - 1.618 Fib Extension - Purple
- $45,360 - 1.618 Fib Extension - Orange
- $47,540 - Short term 1.414 Fib Extension - Blue
- $48,000 - Round Number Level
- $50,000 - Round Number Level
- $50,121 - Longer termed 1.618 Fib Extension - Red
- $51,900 - Short term 1.618 Fib Extension - Blue
Bearish Levels:
- $36,000 - Round Number Level
- $34,600 - .236 Fib Retracement
- $32,210 - .382 Fib Retracement
- $30,280 - .5 Fib Retracement
- $30,000 - Round Number Level
- $28,350 - .618 Fib Retracement
- $27,160 -
- $25,600 - .786 Fib Retracement
Fundamental Analysis Note:
There are many fundamental factors driving BTC to new ATHs this year. The main driving force is the fact that governments are continuing to print money at unprecedented rates causing the US Dollar to depreciate. As a result, institutions with large cash holdings see negative returns and have to put their money somewhere to hedge against inflation - Bitcoin is one of their picks.
Additionally, it seems that millennials are now viewing Bitcoin as the Gold of their generation - leading to a sort of “Gold Rush” as they scramble to get hold of some for themselves.
Ethereum (ETH) Price Analysis
ETH/USD - DAILY CHART
What Has Been Going On?
Ethereum started surging toward the end of December when it managed to break beyond the $700 level. It continued to climb further higher in January as it penetrated above $800 to reach $1,000 in just one day.
The bulls did not stop there.
They continued higher from $1,000 as they penetrated above resistance at $1,133 (bearish .786 Fib) to reach the current level of around $1,255.
What is interesting to see is the fact that the trading volume has absolutely exploded in the first week of January 2021. It was very quiet from October through December, but when 2021 started, the trading volume exploded to three times the levels of the previous few months.
With the current bullish momentum within the market, ETH will certainly penetrate beyond the previous ATH in Q1 of 2021.
Bullish Levels:
- $1,266 - Long term bearish .886 Fib Retracement.
- $1,300 - Round Number Level
- $1,336 - Short Term 1.414 Fib Extension - Purple
- $1,425 - ATH Level
- $1,500 - Round Number Level
- $1,550 - Short term 1.618 Fib Extension - Orange
- $1,600 - Round Number Level
- $1,657 - 1.618 Fib Extension - Blue
- $1,750 - Round Number Level
- $1,800 - Round Number Level
- $1,850 - Long Term 1.618 Fib Extension - Green
- $1,900 - Round Number Level
- $2,000 - Round Number Level
Bearish Levels:
- $1,200 - Round Number Level
- $1,100 - Round Number Level
- $1,068 - .236 Fib Retracement
- $1,000 - Round Number Level
- $970 - .382 Fib Retracement
- $888 - .5 Fib Retracement
- $800 - .618 Fib Retracement
Fundamental Analysis Note:
The biggest fundamental driving force for ETH is the fact that eth2 is already in motion. There is already 2.3 million ETH in the eth2 staking pool, ready to get the transition from PoW to PoS up and running. Additionally, dApps in the space are finally generating revenue. From Uniswap to Kyber Network - all of these dApps are making over $1 million a month in revenue. In fact, Uniswap makes over $40 million per month.
Binance Coin (BNB) Price Analysis
BNB/USD - DAILY CHART
What Has Been Going On?
Binance Coin is one of the small handful of coins that recently created fresh ATH levels. It had rebounded from support at $26.65 earlier in December and started to push higher. By the end of December, Binance Coin managed to clock in a high of $40 - creating a fresh ATH at that point.
The bull run for BNB continued in 2021. Initially, it found resistance at $41.55, but the buyers penetrated above there yesterday and set a new ATH price at $45 today (January 7th).
Like Bitcoin and Etheruem, Binance Coin has gone parabolic and is trading within a steep rising price channel.
Bullish Levels:
- $45 - ATH Price
- $47.85 - 1.272 Fib Extension - Black
- $50.20 - 1.414 Fib Extension - Black & Round Number Level
- $52 - Round Number Level
- $54.58 - 1.618 Fib Extension - Black
- $55.15 - Long term 1.272 Fib Extension - Purple
- $60.60 - Long term 1.414 Fib Extension - Purple
- $65 - Round Number Level
- $68.40 - Long term 1.618 Fib Extension - Purple
Bearish Levels:
- $42.50 - Round Number Level
- $40 - Previous ATH
- $37.90 - .382 Fib Retracement
- $35.72 - .5 Fib Retracement
- $33.56 - .618 Fib Retracement
- $30.50 - .786 Fib Retracement
Fundamental Analysis Note:
On the fundamental side for BNB, it seems as if investors are betting on it as news hits the wire the US wants to tighten regulations around KYC regulations, including for DeFi wallets. This could end up causing DeFi traders just to flood back into CEX trading - especially considering the rising fees for Ethereum. Additionally, whether the market is moving up or down, Binance Exchange is a house that always makes money because people need somewhere to trade.
