Weekly Crypto Market Report: Oct 4-Oct 10, 2021 - Bitcoin, Ethereum, Shiba Inu, & Stellar
Market Fundamentals Analysis
Bitcoin has witnessed a significant rally as it crossed the C$62,500 mark and regained the $1 trillion market capitalization feat. BTC beat the rather stiff psychological resistance of C$66,500 convincingly and hit a high of C$71,000. In so doing, BTC almost entirely removed any trace of the impact China’s ban on mining had on prices in May and became a trillion-dollar asset class again. This rally has sparked enthusiasm and confidence among market participants, with longer-term BTC price projections being largely bullish in nature. Various calls for C$67,000 to be hit were seen, in the short term, however, the futures markets fluctuated due to the aggressive volatility in the market as CME Group BTC futures, previously trading $400 above the spot price, were beaten during this breakout. This might have restricted the rally to that extent. From a slightly longer-term perspective, the month might witness a further retracement for BTC/CAD if the pair retests all-time highs this month. BTC dominance also has increased and currently is at 45.4%.
In the latter part of last week, ETH saw a 15% rise and it currently trades at C$4,472. ETH has started to witness good inflows upon recovery, which is a strong fundamental sign of the asset, showcasing that investors are still keen on accumulating the asset. ETH faces strong resistance at C$4,679, and if it breaks this level it will certainly see another rally. The asset has been trading in the green for multiple sessions, but as soon as it gains steam, bears tend to successfully pull the asset back. The bears are bulls are preventing the asset from trending in any one direction, if bears do take control we could witness ETH slide significantly, to levels below C$4k mark, however, if the bulls can successfully override the bears, a high of C$5,435 is a possibility. Interestingly, there has been a surge in DEX volumes, which has also driven ETH prices up. Ethereum network is by far the most dominant smart contract and it hosts the largest and most used decentralized exchanges like Uniswap (UNI) and SushiSwap (SUSHI). ETH dominance stands close to 19% currently.
An asset that has been growing phenomenally over the month is SHIBA INU. The rally in the price of Shiba Inu (SHIB) so far in October pushed the SHIB token to become the 20th largest digital asset by market capitalization. Shiba Inu's market valuation at its highest point over the week was $11 billion and trends currently around $10.7 billion, putting it in the top-20 by market cap for the first time. The rally started after Elon Musk’s Twitter call out, which saw the asset shoot up by 40% within an hour. SHIB price surged by ~400% on a week on week basis, opening the fourth quarter of 2021 at C$0.00003101. The token retested its five-month high of C$0.00007 on Oct 6. Since then, however, SHIB underwent a 42% price correction as traders started to book profit on their spot positions. As a result, Shiba Inu's market cap fell in tandem, going as low as $8.06 billion on Friday. The asset has seen another rally since and currently trades at C$0.00003630.
Another fundamentally strong asset that has gained significant traction off late is Stellar. Stellar (XLM) is an open network that allows money to be moved and stored. XLM has been in the news over the past few days, after Moneygram, a leading global money transfer service said that it would deploy the stellar blockchain to enable its user to convert fiat currency into USDC. The network’s native token, lumens, acts as the bridge which makes trading assets across borders is cheaper, and challenges existing payment providers that charge high fees for a similar service. XLM is ranked 22 with a live market cap of $8.4 billion. XLM witnessed a sharp correction from its recent high of C$0.5487 falling almost by 41%. The short-lived dip to C$0.3222 on the asset was an opportunity grabbed by the bulls, which drove the prices up with large volumes and good momentum. XLM trades at C$0.4350 currently.
- Financial services company MoneyGram International has partnered with the Stellar Development Foundation to enable consumers to send money using Circle’s popular stablecoin, USD Coin (USDC), and convert directly to and from fiat.
- Brazil is going to consider the Bitcoin bill that will be presented in the Brazilian Congress, Plenary of the Chamber of Deputies this week.
- Another batch of Russian online crypto exchanges in Russia face closure following a recent decision by a regional court. Sri Lanka joins the global crypto adoption drive after setting up a committee for exploring and implementing blockchain and crypto mining technologies.
Bitcoin Technical Analysis
BITCOIN post taking multiple support at 100 day moving average around C$51,750 surged almost by 40% from its recent low and made the high of C$71,000. The asset gave a breakout above the descending trendline and made ‘Higher Top Higher Bottom Formation’ and soared above the long-held resistance of C$66,449 (previous level from where the asset witnessed sharp correction). Currently, BTC is consolidating at higher levels and trading in a range from C$70,500 to C$67,500 with declining volumes. If the bulls manage to push the price above C$72,500 then we may expect the asset to further rally up to C$80k mark and if the bears pull the price below C$66,500 then we can expect minor correction and the price may drop to C$62,250. RSI is showing strength and is at around 70 but the investors should remain cautious once it enters into an overbought zone which is above 80.
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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.