Crypto Weekly Outlook: November 15, 2021
The global crypto market has been moving in a tight range since the end of last week, hovering between $2.7 trillion and $2.9 trillion with the total crypto market cap sitting at $2.87 trillion as of this writing according to CoinMarketCap. Last week, the market cap hit an all-time high with some price providers even listing a total market cap above $3 trillion - a major milestone. This was largely a result of Bitcoin and Ethereum reaching new all-time highs on the back of higher than expected inflation data in the U.S. However, the market pulled back shortly thereafter due to mass liquidations in the derivatives market as well as contagion concerns regarding Chinese property giant Evergrande. What will drive the market this week? Some analysts believe the dog memecoin frenzy is starting to fade while the gaming and metaverse related cryptos will pick up the slack. According to DappRadar, over 50% of the blockchain industry’s total activity in October came from game dApps. However, as we all have learned, the memecoins don’t need to provide significant utility, at least not initially, in order to experience massive price appreciation. Just look to the Elon Musk inspired memecoins. What is most certain is that whichever way Bitcoin moves this week - many coins will follow.
Bitcoin’s (BTC) Taproot soft fork went into effect over the weekend. The upgrade aims to improve the scripting capabilities and privacy of the Bitcoin network. The event seems to have had no major impact on the Bitcoin price however. What is notable is that Bitcoin did have a successful weekly close above the key $64.8K level - turning the level into support. Most analysts said this was necessary to increase the chance of a rally towards new all-time highs. Other analysts expect BTC to move in the $64K-$65K area for a while longer before attempting another breakout. Analyst Michaël van de Poppe recently said that $66K needs to be cleared for any rally to materialize and that support is present around the $62K-$63K area as well as at the $58K level which is also the 38% Fibonacci retracement level. Investors should also be aware of the important fact that long-term holders (LTH) have recently stopped accumulating and are now selling some of their BTC holdings - a common characteristic of bull run tops. According to Glassnode, this is the first net reduction in LTH holdings since April. Analyst Willy Woo has also highlighted that most market participants are very bullish at the moment with many speculative long positions and that the majority is seldom right. He believes more uncertainty is needed before another surge higher takes place. Bitcoin is trading at $65,140 as of this writing.
Will Ethereum (ETH) make another run towards new highs this week? It has been bouncing off support just above $4,500 over the past few days while being rejected from the $4,700 area. If it can clear the $4,725-$4,750 area, a move towards all-time highs is not out of the question. On the fundamental side, activity addresses on Ethereum continue to spike with Santiment reporting that the Ethereum network address activity gained 48% after plummeting in late September. ETH is trading at $4,694 as of this writing.
XRP (XRP) is one to watch this week as well. After hitting a high of $1.34 last week, it has again fallen back to battle around the key $1.20 level. Buyers are providing support at the $1.17 area while bears are trying to flip the $1.20 back to resistance. If the $1.20 level can be overtaken by the bulls, the next target is $1.40. Analysts such as Scott Melker and Credible both have recently stated that XRP is primed to rally based on technical indicators. XRP is trading at $1.19 as of press time.
What’s going on with Polkadot (DOT)? DOT has pulled back sharply since hitting its all-time high of $55.20 on November 4th. As we noted in last week’s outlook, “investors should be cautious of a possible sell-off once the auctions actually begin.” It had a very strong October and lead-up to its parachain auctions, but it appears retail investors' excitement with the on-going auctions have dwindled. Despite the current lack of hype, institutional interest in DOT remains strong. Investors should also remember that the parachain auctions will take a while - with five auctions each lasting for a week. Support is present at $41.40 and $34.80 while the price as of this writing is $46.20
Shiba Inu (SHIB) is getting closer and closer to the one million holder mark, but will the market take notice once it finally happens? There are many conflicting expectations for the future of SHIB. For instance, analyst Scott Melker recently noted that SHIB looked bullish after taking out a diagonal resistance with his target price at $0.000089 - much higher than the current price. Shiba Inu also was listed by CoinDCX (one of India’s leading cryptocurrency exchanges) and Gemini this past Friday, but no major price movements ensued. It appears the market is more concerned on whether SHIB will be listed by Kraken or Robinhood in the near future. To that end, Brian Hoffman, Kraken’s product lead, tweeted that he was “feeling good” about the upcoming week, adding a GIF that depicts a Shiba Inu dog typing on a laptop. Conversely, there has been close to a 70% drop in the Google searches for Shiba Inu for the past couple of weeks potentially indicating fading interest in the memecoin. Moreover, large transactions by whales have dropped 7%, not a good sign. Support is present at $0.000050 while resistance is present at $0.000055. SHIB is trading at $0.0000535 as of press time.
Don’t miss the happenings of Vechain (VET) this week. On November 16th, at 8am GMT (block #10653500) the upgrade to the POA2.0 consensus model on the mainnet will begin. “This major upgrade to the network greatly enhances finality and data security by uniquely combining the two most common consensus types - the Nakamoto and Byzantine Fault Tolerance (BFT) consensus mechanisms,” Vechain explains. VET has already rallied nicely over the past month, so be prepared.
Stellar (XLM) shouldn’t be slept on as well as the Stellar Meridian conference will take place on November 17th-18th. Speakers at the conference include Dante Disparte, Chief Strategy Officer at Circle and Jed McCaleb, the co-founder and Chief Architect of the Stellar Development Foundation.
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