Weekly Crypto Market Report: Oct 25-Oct 31, 2021 - Bitcoin, Ethereum, Shib & Dogecoin
Market Fundamentals Analysis
The floor fell out beneath crypto markets during the overnight session. BTC broke beneath its 20-DMA for the first time in October and touched C$71k last week, after hitting a high of C$82,760. When BTC sells off as hard as it did, market correlation moves closer to 1. ETH breached C$5.5k, post which alts moved roughly 5-10% lower. Seemingly only SHIB was spared the bloodbath as the relentless retail bid keeps sending the meme coin to all-time highs, before correcting slightly. We have seen cascading liquidations to the tune of +$700mn last week, over just a 24 hour period. Roughly $276mn of the liquidations came from ETH, $111mn from BTC and $26mn from DOT, which is probably the reason why the correction in the market has set in last week. However, interestingly, the bullish outlook prevailed. As soon as markets corrected, accumulation was seen, and inflows returned almost immediately. Since then, both BTC and ETH have been in the green, across multiple trading sessions. This reinstills the fundamental belief in this asset class, and given that markets have sustained at these levels, we might in fact see assets set a new benchmark for themselves. The BTC whitepaper was completed 13 years yesterday, as it was released on October 31, 2008.
It appears as if markets are firming this week with ETH through C$5.3k again and BTC at C$77k. Given the leverage-driven nature of this selloff, we anticipate a slow rebound of prices throughout the day. Many institutions might see the selloff as a buying opportunity for BTC though they don't see much short-term upside above recent ATHs. Also, not to be lost in the selloff, there was also quite positive news that hit the tape: FDIC Chair indicated that the agency is working to establish clear guidance on the intersection between crypto and the US banking world. That only bolsters a broadly positive backdrop for the now $2.6T crypto industry.
After the sell-off late last week, crypto markets have regained their footing with BTC up 4% and ETH up 6% week on week. The story, of course, over the last few days is the herculean run of Dogecoin rival, Shiba Inu. The memecoin set another ATH overnight last week, as it shot up by 167% over the past week. SHIB officially flipped DOGE as the largest memecoin and if you hear a sucking sound, it's the sound of all of the volume in crypto going to the token. SHIB's 24H volumes last week was greater than BTC's and was 1.75x more than ETH's. For the sake of inspiring some FOMO, Morning Brew has identified a wallet that purchased $8k of SHIB last August, which is now worth $5.7bn - giving this lucky (skilled?) wallet a net worth in excess of legendary investor Stanley Druckenmiller's. Since then, both the memecoins have seen a correction, but are still seeing good inflows. For those keeping tabs, Robinhood has still yet to launch the token. The platform's lack of speed has been a boon to Coinbase, who again has the most downloaded application in the Apple App Store after advertising its ability to trade "BTC, ETH, SHIB". Outside of the Majors and SHIB, altcoins are broadly in the green with notable outperformance from FTM and HNT. HNT is up 10% on the news of its partnership with DISH. The Telecom giant has committed to buying 3.5mm Helium hotspots. To put that size in perspective, there are roughly 250k Helium hotspots running today.
- The Ethereum 2.0 Altair Beacon Chain update has gotten off to a successful start, with 98.7% of nodes already upgraded.
- The Tourism Authority of Thailand (TAT) is considering creating its own utility token to capitalize on the growing popularity of cryptocurrencies.
- The New York Stock Exchange (NYSE) continues listing Bitcoin (BTC)-linked exchange-traded funds (ETF), with Volt Equity becoming the latest company to debut such a product on the exchange.
- A group of U.S. banking regulators is working on how banks can be allowed to offer crypto services and hold cryptocurrencies on their balance sheets. Retail giant Walmart says that bitcoin can now be purchased at 200 of its stores in the U.S.
Bitcoin Technical Analysis
Bitcoin, post making the all-time high of C$82,759 faced stiff resistance around the peak and witnessed some profit booking. The asset corrected almost by 13.5% making the weekly low of C$71,662. The short-lived dip was an opportunity grabbed by bulls as BTC took support around the crucial level of C$71,300 (38.2% Fibonacci Retracement Level). If the price holds the support then the bulls may resume the up move, if the price breaks the support then we may expect further downfall and the prices may slide to the next support level of C$67,700. To further rally BTC needs to break and close above C$82,760. Currently, prices are trading above 20 Day Moving Average and RSI is also in positive territory. Hence, we continue to remain bullish until the asset breaks and closes below the support level.
For the latest cryptocurrency prices, check out NDAX's Markets page.
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.