Weekly Crypto Market Report: Dec 06-12, 2021 - BTC, ETH, ADA, MATIC & More
Market Fundamentals Analysis
The week hasn’t seen too much action, across assets. The market has been fairly range-bound all week. The month started in the red after markets crashed. In the lead-up to the crash, we saw a large amount of profit booking taking place, which has now calmed down. The market seems to have stabilized, as Bitcoin successfully crossed the C$65k mark last week which also acts as a crucial level, as C$65k is also the 20d moving average. We feel strongly towards this asset, as so far it has underperformed compared to its peers, and a rally would be subject to BTC trending in an upward direction here on.
Among the altcoins, Ethereum seems to be outperforming Bitcoin by a good margin this year. Its market dominance is up to 22%. The number of active addresses on the network continues to climb while the issuance of new ETH is diminishing, a classic demand and supply paradigm, which is the key reason for its rise. ETH did undergo a hard-fork (Arrow Glacier upgrade) last week, which briefly had a positive impact on price, but that quickly eroded. ETH’s recovery has been more robust; after .08 had been resistant on the ETH/BTC all year, and touched a multi-year high of 0.089 last week. After its surge to 0.089 last week, ETH/BTC has drawn back down to .0825. Options markets don’t appear to be expressing a clear view right now; 30-day implied vols are around 85%, and the risk-reversal is trading at around 4% to the put (compared to around 8% a week ago).
Cardano successfully launched Testnet that will bring Ethereum tokens to its ecosystem. The Testnet converter aims to transform Ethereum’s ERC-20 tokens into native tokens on the Cardano blockchain. While there hasn’t been any significant impact on ADA prices yet, we anticipate that once the Testnet goes live, ADA will appreciate, as this fundamental development will allow the network to connect with various other decentralized protocols, increasing its usability, and utility as well. Having said that, over the weekend, ADA has spiked by 6% and has neared the C$1.85 mark. Interestingly, whales seem to be quite optimistic about Ripple (XRP). With more than 1 million XRP coins, whales have added more than 6% to their previous holdings and are currently sitting on 3.3 billion XRP, which is worth approximately $2.6 billion, in the past 3 months. This accumulation trend seems to have started in September, as the number of wallets holding from 1-10 million coins on the network reached 5.8%. Currently, whales are accountable for 6.1% of all wallets on the network.
Crypto trading platform AscendEX suffered a loss of $77.7 million in a hot wallet compromise last week. Hackers gained access to $8.5m worth of Polygon (MATIC) tokens, which is probably the reason why the asset has seen a fall of approximately 20% week on week. Having said that, MATIC continues good inflows, and we have seen accumulation after this correction set in. MATIC made an announcement that Sequoia, Steadview, and other investors were purchasing tokens in a private round. Polygon has seen a code script upgrade. With the new code in place, withdrawal and deposits will be quicker and integrated on various DeFi platforms. Moreover, tps is expected to increase too, making it a very strong asset fundamentally.
Overall, the week has been an interesting one. Most assets have seen some recovery, but the market at large seems to be in a consolidation phase. The next few days shall be crucial for us to be able to assess which side the market will trend, as currently much of it is moving sideways.
- Visa has announced that it would be starting a new crypto consulting service for banks and merchants to promote the adoption of cryptocurrencies in the mainstream.
- The United States House Committee on Financial Services has released a memorandum mentioning these four key points: crypto exchange, regulatory concerns in digital assets, stable coin offerings and federal regulatory responses.
- Google has released its traditional annual list of top searches for the year 2021 Dogecoin ranked 4th in the most popular news search term both globally and separately in the US and “Ethereum price” was ranked 10th.
- The Solana blockchain has reportedly suffered another DDoS attack that temporarily clogged the network, however the network appeared to remain online.
- New York-based asset manager WisdomTree has amended its filing for a Bitcoin exchange-traded fund with the Securities and Exchange Commission to name U.S. Bank as its custodian
Bitcoin Technical Analysis
BITCOIN after breaking the crucial support of C$68,500 (50% Fibonacci Retracement Level) witnessed a sharp fall almost by 20% making the low of C$54,600. Post this move, the asset showed some signs of recovery but with thin volumes. Technically on a daily chart, BTC is forming a ‘Rectangle Pattern’. The pattern indicates there is no trend, as the price moves up and down between support and resistance. The prices are consolidating in a range from C$65,000 to C$59,700. Breakouts on either side with good volumes will further decide the trend for the asset and to witness a rally or a bullish move BTC needs to break and sustain above the strong resistance of C$68,500. The falling moving averages and the relative strength index (RSI) in the below 50 indicate that bears have the upper hand.
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Information provided in the weekly market report is for information purposes only and should not be interpreted as investment, legal, or tax advice. Prior to investing, it is very important to evaluate your investment objectives and your risk tolerance carefully. This technical report is not meant to provide guarantees of future performance, and users should not rely on it, as the actual performance and financial results may differ significantly.