Digital enthusiasts should be happy as last week, the total crypto market capitalization established a new all-time high of $2.5 trillion, surpassing the previous top of $2.4 trillion reached this spring.
It coincides with the current move in Bitcoin, which is approaching an all-time high. Is it the main coin that contributes the most to pumping the market cap? Let us check it in the next chart of the total crypto market cap excluding Bitcoin.
The first difference in this chart is that the new all-time high was established in September, exceeding this spring's top. I highlighted that market distortion in the September post titled "Watch Ethereum As Bitcoin Loses Momentum" . At that time, Bitcoin underperformed the general crypto market as China banned cryptos and disfavored miners.
The graph above does not look bad. However, none of the earlier tops were retested, including the spring's maximum ($1.36 trillion) and September's all-time high ($1.41 trillion). It means that this time Bitcoin did most of the work.
This chart above compares the performance of five coins: Bitcoin (black), Ethereum (red), Ripple (green), Cardano (ADA, orange), and Solana (purple). It starts from the date when the crypto market bottomed in July after a deep correction.
It proves the conclusion from two previous charts above that Bitcoin first underperformed the market in September, outperforming in October. In the end, four out of five coins have shown the same dynamics of around 110% since the summer valley.
One coin called Solana made stunning progress as it scored more than 700% in September, and now it is a bit lower but still at a jaw-dropping +600% gain.
Solana is a decentralized blockchain built to enable scalable, user-friendly apps for the world. The project claims to be the fastest blockchain globally, with a transaction latency at an incredible 0.4 second block time (a measure of the time it takes to produce a new block, or data file, in a blockchain network). To compare, it takes Bitcoin blockchain 600 seconds, and Ethereum spends 10-20 seconds to generate a new block.
One of the essential innovations that make Solana different is the proof-of-history (PoH) consensus. This blockchain has developed some sort of a synchronized clock that assigns a timestamp for each transaction and disables the ability of miners and bots to decide the order in which transactions are recorded onto the blockchain. This concept allows for greater scalability of the protocol, which in turn boosts usability.
The chart structure of Solana shows that the coin is in a retracement mode after a strong rally that hit the all-time high on September 9; due to the launch of its non-fungible tokens (NFT) project Degenerate Ape Academy on August 15, with prices rising more than 400% since then.
Initially, it was profit-taking that ignited the current correction from the peak. Later, on September 15, losses extended after Solana tweeted that the network was experiencing technical issues and the outage lasted for 17 hours. The price established a valley of red leg 1 at $116 on September 21.
The following pullback emerged within two green legs (a) and (b). I consider this structure as a joint between the red leg 1 and the upcoming red leg 2 down.
The minor red leg (i) is already in place, followed by a small pullback to the upside. It should not surpass the peak of the green leg (b) at $178 to keep the structure intact. The minor red leg (ii) should at least retest the valley of large red leg 1 at $116 to complete the entire structure. The large red leg 2 could hit the $78 mark to travel the equal distance of the first leg down.
The 61.8% Fibonacci retracement level of the preceding rally is located at the $94 level. We already saw how this support worked perfectly in the Bitcoin chart, so it is worth watching.
The RSI is still in the bullish area, as it should break down below the crucial 50 level to confirm the second leg down.
INO.com Contributor, Metals
Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.