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