Crypto Weekly Outlook: November 29, 2021
The crypto market has largely recovered from last week’s Black Friday crash mainly caused by uncertainty surrounding the new Omicron variant of COVID-19. As of this writing, the total crypto market cap is sitting near $2.6T, just slightly below where it stood one week ago. Many market participants believe the consolidation period is most likely over, although the market still appears cautious as illustrated by the Crypto Fear & Greed Index. The index is sitting at 40 as of this post, indicating fear, but it was at 33 this time last week - meaning sentiment is less fearful than last week. The big winners last week were the metaverse and gaming coins, but it seems they might need a breather after rallying so much so fast whereas the DeFi tokens might pick up some of the slack as the space recently hit a new all-time high in terms of Total Value Locked (TVL). Regardless of crypto-specific developments, macro concerns regarding the new coronavirus variant should be front and center in most financial markets going forward.
Bitcoin (BTC) finished last week up 1.5% after a $3,200 rally in the closing hours - a bullish sign. It then managed to bounce off its support on Monday. MicroStrategy’s recent disclosure that they bought over $400M worth of Bitcoin during the recent dip didn’t seem to push the price higher, but it does aid the bullish on-chain fundamentals. On-chain analyst Willy Woo recently stated that the correction should be over soon since most coins are flowing to strong hands. He believes the next upward move could happen in the coming days based on the derivatives data. Supporting his view is the fact that long term holders and miners are continuing to HODL. Looking forward to December, investors should remember that Bitcoin has finished in the green only 50% of the time since 2013, so historical trends don’t favor a bullish or bearish year end.
On the technical side, heavy support is present at the $53K area, corresponding to Bitcoin’s $1T market cap. This area is also the average on-chain cost basis of short-term holders. Then there is the support at the 100D SMA at $54,184 as well as support at $55K. Staying above the $57K level for an extended period of time will be key as the price has moved above and below this area with ease. Resistance is present near $58.3K and at the 20D EMA at $58, 712. Above that, there’s the key $60K level and the 50D SMA at $60,805. In past weeks, it appears that traders have been selling the rallies, so staying above a key level such as the $57K-$58K area is super important if Bitcoin is to go back into the $60K’s. BTC is trading at $58, 450 as of press time.
Ethereum (ETH) has surged higher to start the week after briefly falling below $4K last week. Heavy support is present at the key $4K level. Staying above the important $4,350 area is crucial if an upwards move is to have staying power. Other key levels to watch are $4,400 and $4,500. ETH is trading at $4, 670 as of this writing.
Binance Coin (BNB) will undergo some major changes this week. On November 30th, the Binance Smart Chain Bruno upgrade will commence. This hard fork upgrade will introduce a real-time burning mechanism (the BEP-95) into the economic model of BSC that is set to increase both BNB burning by more than 60% - super bullish news. Support appears to be present at the 20D EMA at $595 while resistance appears at the $670-$690 zone. BNB is trading at $628 as of press time.
Solana (SOL) started the week on a strong note, having retaken the important $200 level, but will it hold? Key support is present at the 100D SMA at $172 and at $190. Resistance is present at the $213 and at $236. SOL is trading at $215 as of this writing.
Are Cardano’s (ADA) dog days behind it? ADA recently bounced off a low of $1.41 on November 28, but does this signify a recovery rally is about to begin or just an extended consolidation process? Last week’s announcement of eToro limiting ADA trading for its US clients appears to have hurt sentiment, but in reality, eToro handled very little ADA volume and that same week ADA got listed by the major European crypto exchange Bitstamp. Moreover, the number of active addresses on Cardano have jumped by 25% in November according to data from Messari. Furthermore, the number of addresses staking ADA have grown by 100K in the past two months. There is over $50B of ADA staked, representing over 72% of ADA’s supply. Market participants have been waiting for more development activity before getting behind ADA in a more meaningful way, but the downside appears to be limited.
ADA has support at $1.20 and at the $1.40 to $1.45 area. The 20D EMA of $1.78 will likely be a key battle area going forward. Resistance is strong at the $1.95 to $2 area. ADA is trading at $1.60 as of this writing.
Will XRP turn the crucial $1 level back into support this week? Since the week started, the bulls and bears have faced off around the $1 area. If the bulls can turn it into definitive support then the next stop is the 20D EMA at $1.05 and then the 50D SMA at $1.10. If the bears succeed in pushing XRP lower, then the next stops could be the support at $0.89 and $0.70. XRP is trading at $1.03 as of press time.
Polkadot (DOT) has clawed back most, but not all of its losses from the Black Friday drop, but can it break back into the $40’s? Parachain auctions are still happening, but the market doesn’t seem so interested at the moment. Strong support is present at $26 and at the 200D EMA near $32. The bulls defended this $32 area last week. Other key levels to watch going forward are the $37 to $38 area as well as the 20D EMA at $40.41. DOT is trading at $38.60 as of this writing.
Shiba Inu (SHIB) rocketed higher to start the week on the news that SHIB is finally getting listed on crypto exchange Kraken as well as the announcement that they are hiring former VP of Activision William Volk to help them enter the metaverse space. Many Ethereum whales added SHIB to their portfolio over the past two days. SHIB has rallied 30% already on the news, but will the whales now take profits or attempt to pump it higher? Traders should tread carefully.
Support is present at the 100D SMA at $0.000027. Resistance is present at $0.000052. Key levels to watch are the 20D EMA at $0.000044 and the 50D SMA at $0.000046. SHIB is trading at $0.00004991 as of this writing.
Traders should pay attention to Qtum (QTUM) this week as it will execute its first block reward halving on December 1st. This innovative proof-of-stake blockchain combines UTXO-based security with an ability to support the Ethereum Virtual Machine (EVM). Halvings are often seen as bullish by the market as they normally tighten supply, leading to higher prices. Qtum is trading at $17.08 (near resistance) as of this post.
Traders should also be prepared for the SEC’s Open Meeting on December 2nd - which will include a crypto panel discussion.
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