Crypto Weekly Outlook: November 1, 2021

The overall crypto market has remained relatively stable since last week, hovering around the $2.6T area, sitting at $2.65T as of this writing. “Uptober” has ended and November has begun. Both heavyweights Bitcoin and Ethereum saw new all-time highs made last month with ETH claiming its new high last week. And as seasoned investors know, rising prices do tend to be followed by rising prices - for a time at least. Additionally, the altcoin market capitalization reached a new high last week, illustrating that although Bitcoin may have led the charge, it’s not the only factor driving the market higher. The dog meme craze and the “metaverse” linked cryptos have also been lifting up the market.

Bitcoin (BTC) had its third successive weekly close and its first monthly close above the psychologically important $60K level - a big win for the BTC technicals. It finished October with nearly 40% gains. October has been a historically strong month for BTC. Since 2013, BTC has finished in the green in seven of the past nine October’s, while averaging 24% monthly gains. November has been even better historically. Since 2013, it has finished in the green in six of the past eight Novembers - with an average monthly return of 66%. Granted, the average monthly gain in November was helped a lot by its monster run in 2013, but it’s safe to say that BTC normally does quite well in November. Even prominent (and highly accurate) crypto analyst PlanB is predicting a November closing price of $98K according to his infamous S2F model.

Aiding the bullish case even more, Kraken exchange just put out a report highlighting that BTC whales have increased their collective holdings by around 0.25% since early October to reach $720B. The report also noted that the number of Bitcoin whales has risen by 1.6% in the same timeframe. These whales also aren’t moving their BTC to centralized exchanges indicating that they are choosing to hodl. And it’s not just the whales, most of the miners are hodling too.

What else can help the bullish narrative? Well, according to Glassnode, Bitcoin reserves across exchanges have hit a three-year low, highlighting the lack of circulating supply. Bitcoin will also undergo its eighth consecutive positive difficulty adjustment this week, strengthening the network. Where is the risk this week then? Well, the Bitcoin leverage ratio is still elevated, meaning a shakeout is still in the cards. The price to watch is the 20-day EMA of $59,679 as well as the key $60K level. Assuming the price stays above these levels, a re-test of the all-time high at $67K is likely. As of this writing, Bitcoin is trading at $61,000.