Total Crypto Market Cap Has Already Gained More Than 30% off Its Lows
While individual moves are very important, traders should also keep a close eye on the total crypto market cap as it shows the general trends in the crypto markets.
Back in January, the total crypto market cap bottomed near the $1.5 trillion level and rebounded towards the $2 trillion level. Not surprisingly, markets are taking a pause now as some traders are eager to take profits off the table after a 30% rally off lows.
The total crypto market cap is currently consolidating in the $1.9 trillion – $2.1 trillion range. Once it gets out of this range, it will have a great chance to gain significant upside momentum.
Such a move must be triggered by the performance of the top coins as roughly 60% of the total crypto market cap is in Bitcoin and Ethereum. In case the leading coins start to move higher, traders will rush to smaller coins for a catch-up play.
Importantly, a move out of the $1.9 trillion – $2.1 trillion range will signal that the previous pullback, which took the total crypto market cap from $3 trillion to $1.5 trillion, is over, and a new upside trend is emerging.
I’d also note that traders should be ready for material moves today as the U.S. will release inflation data for January, which will have an impact on all riskier assets. If inflation numbers are not too scary, risk appetite may grow and trigger a rally in the crypto markets.