Weekly Crypto Market Report: Nov 22-28, 2021 - BTC, ETH, LUNA, MATIC & More

Bitcoin now faces stiff resistance in the range of C$75,500, and then at C$77,000. This comes after the asset fell significantly over the last week, from the new all-time high of C$85,999 it set earlier this month. BTC buyers have been quite active during this correction, which came after the unfavourable $3bn options expiry that took place last Friday. The asset continues to maintain a bullish stance, provided it doesn’t fall below the C$68,000 mark. Bitcoin remains in a consolidation phase as of now though and will be so until prices do not beat the C$75,000 mark. BTC, as always, has had a spillover effect on some altcoins too,  as most altcoins have also witnessed corrections late this month.

Ethereum too has seen a correction in the past week, after witnessing a short rally and crossing the C$5,750 mark, after which it fell by approximately 12% and hit lows of C$5,052. This fall has fueled inflows into the asset, as many investors have been on the sidelines over the past couple of weeks. However, we continue to maintain a bullish stance on ETH as long as it sustains and trades above its strong support level at C$5,000. The overall outlook is mixed at this point in time, as both BTC and ETH are trading sideways. November saw an impressive rally in the first 2 weeks, post which the market corrected, and since then has been range-bound in a consolidatory phase. BTC dominance currently stands at 42.2%, which ETH is at 19.7%.

Several altcoins have impressed us too. MATIC has witnessed a strong rally, upwards last week, when it surged to C$2.49, from C$1.83, over a span of just 48-hours. The asset has a market capitalization of $12bn and is ranked 20th. LUNA has been the talk of the town this month after it managed to breach the C$65 and hit a new ATH. Given the widespread correction in the market, the asset fell by 20% or so, before recovering this week, as it has surged over 10% in the past 24-hours and currently trades at C$63.45. Fundamentally, it should be borne in mind that LUNA’s macro-uptrend still remains intact. In fact, post-Terra’s Columbus-5 upgrade, LUNA has seen smooth sailing. TerraUSD, Terra’s native stablecoin, is backed by LUNA. So, in order to increase the supply of TerraUSD, LUNA tokens need to be burned. Conversely, more LUNA is minted when UST’s demand dips. Burning will limit the supply of Luna over time, creating an upward price pressure in the long run, which might help the asset to reach higher levels, similar to the trend we saw with the EIP-1559 upgrade for ETH.

The overall sentiment has been bullish this month, and it seems like this might stick. Markets were volatile, but given that, most of the month has been in the green. We expect our favourite asset inflation hedge asset, BTC, to see attractive volumes and growth, as the fundamental outlook is positive.  Volumes have held up well this month, which is necessary for prices to hold. One of the biggest stories from the weekend came out of El Salvador with the announcement that the country will be building a “Bitcoin City” along the Gulf of Fonseca. The nation plans on issuing a $1B “Bitcoin Bond”. The U.S. OCC issued guidelines for banks that want to provide crypto-related services, stating that banks must first get the approval of their local OCC supervisory office before doing so. The news came out on the same day that all three federal regulators previewed crypto-related policies that are to come in 2022. Hence, as Banks, FIs, Governments, and MNCs continue to adopt digital assets, coupled with the ever so increasing coverage this asset class has been witnessing among institutions and research papers, the macroeconomic outlook is strong.

Weekly Snapshot

Market Updates

During the first week of November, the popular NFT marketplace Opensea surpassed $10 billion in all-time sales.

Britain’s crypto exchanges will be levied with a 2% tax which is likely to be passed on to investors, warned CryptoUK.

Ethereum co-founder Vitalik Buterin has a new Ethereum Improvement Proposal (EIP) that aims on tackling the network’s gas fee problem.

The news of the latest COVID variant is invoking a fresh wave of FUD among investors, with Bitcoin crashing down to $54k.

Bitcoin and cryptocurrency prices fall sharply as the discount shopping of Black Friday kicked off, dropping along with stock markets globally that have fears over the new COVID variant.

Bitcoin Technical Analysis

BTC has been trading in a downtrend post making a peak of C$85,999 and has corrected almost by 20.5% making the low of C$68,380. Technically, on a daily time frame, the asset is taking support at the crucial level of C$68,500 (50% Fibonacci Retracement Level) and showing signs of recovery. Though BTC is facing resistance at its 20 Day Moving Average,  we continue to maintain a bullish stance as long as it sustains and trades above its strong support zone from C$68,500 to C$67,000. However, to witness a rally, BTC needs to break and close above the resistance of C$75,500. A break below the support zone will negate the analysis.  RSI is around 50 suggests a neutral stance for the asset.

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Disclaimer:

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.