Crypto Weekly Outlook: October 18, 2021
The crypto market has continued its bullish bent, marching slightly higher since last week, aided by Bitcoin's strength. As of this writing, the total crypto market cap is sitting at $2.46 trillion, having pulled back slightly from the $2.6 trillion level. Bitcoin's dominance has increased further to sit at 47%. Altcoins continue to underperform compared to the original cryptocurrency.
As of this writing Bitcoin (BTC-USD) is trading at just under $62K with the next stop being its previous all-time high. Tomorrow, October 19th, the ProShares Bitcoin ETF will debut on the NYSE. This is the first Bitcoin ETF to be listed in the U.S. after more than eight years of waiting from the Bitcoin community. This major news earlier helped propel BTC (and the overall market) higher, but some traders are wondering whether it will be a “buy the rumor, sell the news” style event when the ETF starts trading. There are also those who wonder just how helpful the ETF will be to BTC’s price in general as it is a futures-based ETF and not a spot-based ETF, so the ETF investor would be betting on the future price of Bitcoin via a vehicle that doesn’t hold the underlying asset. This means there would be less impact on the actual supply-demand dynamics of the coin although the event is still helpful for the Bitcoin narrative. Other things to be aware of include the open interest in Bitcoin futures on the CME - it recently hit an all-time high of $3.56B indicating that new money (and leverage) is entering the market.
Source: Bybt
Moreover, CryptoQuant’s CEO recently wrote that BTC’s price surge is not due to speculators or a short squeeze, but due to large-volume buyers active on derivative platforms. Also, according to Santiment, the number of Bitcoin whales increased by more than 250 prior to BTC’s recent rise. This was also followed by increasing exchange outflow, another bullish sign. That being said, crypto analyst Tone Vays noted that BTC’s recent rise happened very quickly and a pull back is "imminent." He expects the price to fall back to the mid $50K’s before moving higher again. Lastly, traders should be watching the $58K support, since a close below this level would have the price potentially fall to the next support area of $54,300, the 20-day EMA.
Ethereum (ETH-USD), as of this writing, is trading at $3,730. It’s been in a range from $3,400 - $3,900 for the past week, although it has been moving in the higher end of this range for the past few days. This current consolidation process between $3,600 - $3,900 is expected to continue before any new attempts to reach all-time highs. ETH may however need to retest the $3,600 support area again before the next push to the psychologically important $4K resistance. A move above the $4,027 area could lead to a new all-time high above $4,372, but a break below support could bring the price all the way down to the $3,250 area. It is an active battle between the bulls and the bears.
Cardano (ADA-USD), currently trading at $2.12, is one to watch this week. It is barely holding on to its fourth spot in the market cap rankings with Tether less than $1B away. Strong support is still present at the $2 level, but many technical indicators have turned bearish (such as the RSI). However, as long as $2 holds, ADA should eventually creep higher again. In positive news for the smart contract crypto, Charles Hoshkinson started the Cardano Africa tour to support ADA-based innovation in various countries there. Investors should remember that Cardano's modus operandi is slow and steady, not fast and flashy like other cryptos.
Polygon (MATIC-USD) is one to watch as well, currently trading at $1.49. It needs to break through $1.66 before another strong rally can be confirmed. Some traders believe that if this level is breached, an 85% rally could be on the horizon towards its all-time high of $2.70. Conversely, if MATIC fails to break resistance, the next stop would be $1.30. On the fundamental side, the number of unique addresses on the Polygon network hit an all-time high on October 17, passing 100 million. The network has almost doubled the number of unique addresses just from the start of September! This positive activity should eventually be reflected in the price.
Dogecoin (DOGE-USD) should be followed closely as well, currently trading at the key $0.25 level. Crypto analyst Justin Bennett recently stated that DOGE could be ready for a MAJOR rally if it successfully reclaims the $0.245 level. If it can hold above this price, “targets like $0.32, $0.42, and $0.57 are well within reach.” Thereafter it could begin a 500-1000% multi-month rally. There are many meme coins to watch, but DOGE is staying at the forefront, at least in terms of major endorsers such as Elon Musk and Mark Cuban.
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