This chart represents the total cryptocurrency market cap excluding Bitcoin (BTC) and Ethereum (ETH) on a 4-hour timeframe, as shown on TradingView. Here’s an explanation of the key elements in the chart:
1. Market Cap Data:
• The chart shows the total market cap fluctuating between certain levels, currently at approximately $952 billion.
• The percentage change (-1.46%) indicates a drop in market cap over this timeframe.
2. Rejection Zone (Black Line):
• The black diagonal line represents a trendline resistance that the market struggled to break.
• The label “REJECTION ZONE” highlights a key resistance area where price has been unable to sustain a breakout, suggesting selling pressure.
3. Horizontal Support and Resistance Zones:
• Pink and purple horizontal lines indicate areas of previous price activity:
• Purple boxes/lines: Strong support zones where price previously rebounded.
• Pink line/box: A resistance area that turned into support in some cases.
4. Trendline Break:
• An upward trendline (black line) was broken, indicating a bearish shift, followed by a retest near the rejection zone, confirming this area as resistance.
5. Reaction Zone (Green Box):
• The green box shows a potential accumulation or demand zone, where buying interest may occur. The market may consolidate or reverse upward from here.
6. Relative Strength Index (RSI):
• The RSI indicator at the bottom shows momentum:
• Currently, the RSI is around 52, suggesting a neutral zone but slightly bullish.
• Divergence is marked (black trendline on RSI), showing a disconnect between price action and RSI, which may hint at weakening bullish momentum or a potential reversal.
Summary:
• The chart suggests that the market recently faced resistance around $960 billion, marked by the rejection zone.
• Price is now consolidating near a support zone (green box). A breakdown of this zone could lead to further downside, while a bounce could trigger another attempt to breach the rejection zone.
• Traders might wait for confirmation of either a breakout or a breakdown to decide the next move.