Crypto Weekly Outlook: October 11, 2021
The crypto market has largely been buoyed by Bitcoin’s performance ever since it reclaimed its $1 trillion market capitalization last week. However, the majority of the major alt coins have failed to keep pace with Bitcoin’s gains leading some analysts to predict a “Bitcoin season” before the alt coins can re-emerge as a force of their own again. This alt coin underperformance is most visible when comparing Ethereum and Bitcoin, with ETH/BTC at its lowest level since the beginning of August. That being said, the total crypto market cap has held steady over the weekend with a bullish bias, currently sitting near $2.35T.
As of this writing, Bitcoin (BTC-USD) is trading at $57,400, although it earlier went as high as $57,600. It has steadily been rising since the end of last week. BTC’s strong rally has pushed its market dominance to as high as 46% whereas one month ago, its dominance was sitting closer to 41%. This is the first time in five months that Bitcoin has reached the $57K level. The price has already broken through the $56, 100 resistance level as well as the key $57,200 resistance area. This area is important as it is a horizontal and Fibonacci resistance level. If the price consolidates above this area then the next stop would be $60K and then BTC’s previous all time high of $64,640. However, if the price pulls back to the $53K area, BTC could drop to its 20-day exponential MA of $49.5K. According to Santiment, the recent bullish price action has been driven by whales on the spot market and not by smaller retail traders. Additionally, the price action has been supported by the news that Bitcoin recently saw its network handle over $30B in a single day, a new all time high and a 40x increase in settlement value since the start of 2020.
Bitcoin daily transaction volume chart. Source: Kevin Rooke/Twitter
Ethereum (ETH-USD) on the other hand, has not had as much momentum. Since the weekend, it has been mostly range-bound between $3,350-$3,650. As of press time, ETH is trading at $3,580 although it had dropped below $3,400 earlier in the day. It continues to benefit from positive on-chain metrics and a disinflationary (and potentially deflationary) supply. It needs to stay above the crucial $3,360 area however to increase its chance of a bullish break-out. Supporting the bullish view, it was recently learned that the ETH balance held by miners is the largest it has ever been, with an approximate value of $1.85B or 0.45% of the total circulating supply. This holding bias by miners suggests they expect higher prices in the future. Going forward, ETH needs to convincingly clear the present hurdle of $3,600 if it is to move significantly higher.
Cardano (ADA-USD) still hasn’t moved much even in the face of positive news, currently sitting at $2.20. Yesterday the ADA supported NFT platform SpaceBudz marketplace launched. There are 10,000 unique SpaceBudz in existence. Investors will have to wait to see just how much ADA can benefit from the NFT craze. It’s also worth noting that Cardano’s Africa tour is going to start soon, with the Cardano team traveling throughout Africa to meet various ministries and tech centers in countries such as South Africa, Zanzibar, Burundi, and Kenya. Lastly, crypto analyst Ben Cowen stated that he expected a big move in ADA between mid-November and mid-March. He noted that ADA has strong support at the $2.20 area with more than 160,000 addresses having bought 6 billion ADA at an average price of $2.20. Conversely, there’s key resistance between $2.46-$2.53 with about 70,000 addresses having bought 1.12 billion ADA in this area.
Polkadot (DOT-USD) should also be on investors’ radar, current trading at $35. DOT has gradually been moving closer to its resistance of $38.77, even reaching $37 yesterday. It’s RSI has also recently broken out of a downtrend and the 20-day EMA of $32.15 has started to move higher. Coin Bureau’s crypto analyst “Guy” also recently stated that Polkadot’s launch of parachain slot auctions could lead DOT to a new all-time high. The launch was meant to happen at the end of Q3, but was delayed as a result of an incomplete audit.
XRP (XRP-USD) should not be ignored as well, currently trading at $1.15, after having a nice bounce over the past few days due to strong legal moves by XRP’s legal team in the ongoing case with the SEC. Additionally, Daily Active Addresses have skyrocketed after moving into a bullish trend since bottoming in late July. Furthermore, whales appear to be buying more. The SEC case tends to dominate the XRP narrative, but its use case keeps growing stronger.
Polygon (MATIC-USD) is an interesting crypto play to watch as well, currently trading at $1.26, having fallen from the $1.40 level it briefly hit a few days ago. Last week, the market learned that Polygon had surpassed ETH in daily active users - very impressive news. This appears to not be a one-off as Polygon is continuing to add new users faster than Ethereum, having added close to three million unique addresses in the past week compared to 710,00 for Ethereum. It should also not be forgotten that Polygon is now integrated with NFT powerhouse OpenSea. In the month of September, 49% of all OpenSea transactions were made on Polygon. The bullish case seems to be growing stronger for this cryptocurrency.
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