In the separation between traditional marketplaces and the cryptocurrency space there has certainly been a heavy leaning towards the digital assets last week. Bitcoin managed to make a strong rally, and an even stronger case, for a push to its former all time high of $20,000 — last seen in December, 2017.
The crypto market was on fire last week as Bitcoin shot up from $16,000 to close in on it’s all time high. This of course lent strength to the overall crypto market with altcoins also seeing big gains over the week as the traditional markets retreated.
Meanwhile, the stock markets understandably cooled as attention in the US turns to more leisurely pursuits with Thanksgiving happening on Thursday and that bringing with it a three day week. Even in Europe, things were stagnant as the anticipation of incoming policies from the European Central Bank has traders holding back somewhat.
One of the main reasons for the growth in Bitcoin and associated cryptocurrency markets must have to do with whales accumulating before a further expected rise in price. In fact, some whales have made themselves known and are not who’d you expect as many big traditional money movers have entered into the crypto space recently.
It is not just Bitcoin though as even Tether, one cryptocurrency not interested in market movements, has still been showing bullish signs as it minted another billion dollars. In the altcoin sphere though, it is XRP that is leading the pack with an 89* percent surge while old 2017 favourite Litecoin is also up 22* percent this week alone.
DeFi interest is still high, and this should start showing positives for the price of Ethereum as at the moment, as the number of addresses holding at least 1 ETH reached an all time high of 1,170,598 recently.
Stock Market Activity on The Decline As We Move Towards Thanksgiving and The Short Work Week
With the stimulus measures still nowhere near being approved, the stock market retreated a little last week, with the Dow ending the week only around 800 points off it’s all time high of 30,000. Cautious optimism abounds in the stock market as indices held on to their gains, merely consolidating with not much movement.
As we anticipated, the European index hovered around support of 3,400, possibly waiting for news out from the ECB to take it higher. ECB is expected to engage with heavy lifting of the European economies by unleashing a series of policies in its December 10 meeting.
The forex market was quiet as well, extended USD weakness still in play, with EUR/USD caught between selling pressure at 1.1900 and 1.1800 support due to USD selling. We perhaps will be looking at a very lacklustre traditional markets from now on until the December 10 ECB meeting, unless the US manages to secure its stimulus bill earlier.
Chances of traditional markets action to heat up is small since the coming week is shortened by the Thanksgiving holidays where most Wall Street traders take a long weekend from Thursday to the following Monday. Expect volumes to ease off from Wednesday onwards.
Whale Accumulation Behind the Explosion of Bitcoin Towards $18,000 As Entire Market Grows
The crypto market, on the contrary, is expected to be full of activity since the crypto market operates 24/7. This is coming off a week full of positive volatility as BTC surged to $18,900, just $1,100 shy of its ATH. BTC’s very strong showing leaves many to expect that BTC will surpass its ATH of $20,000 in the coming week. With the surge in price, BTC market capitalisation has posted a new ATH of $347 billion.
Many prominent people have taken to twitter to boast about their BTC purchases. For instance, the Grayscale founder went on Twitter to say the Trust bought $188 million worth of BTC on Thursday alone. The inflow of funds into BTC is indeed coming fast and furious. Just last week, Maisie Williams of Game of Thrones started buying BTC.
At the same time, high profile names like Mexico’s second-richest person Ricardo Salinas Pliego, legendary investors Steven Druckenmiller and Bill Miller also joined in. These buyers are high net worth and do their purchases in larger quantities, as opposed to the man in the street dribs and drabs.
According to data, the BTC rally since October has been driven by whale accumulation as can be seen in the below chart. The whale dominance ratio is at a very high 98%, meaning the accumulation has been in larger quantities per wallet.
Whale dominance ratio = Largest transaction value quintile relative to the lower four quintiles
The amount of BTC locked up in DeFi contracts also started rising again last week, with TVL in wrapped BTC up $500m to a total of around $2.3 billion after a stagnant October.
At the same time, Tether also printed an additional $ 1 billion in the last week to $18 billion.
Altcoins Also on a Bullish Run as XRP Leads the Way With 89 Percent Gains
With more fund inflow and BTC holding its price with every leg up, the altcoin market sprang to life, with lots of popular altcoins posting even larger gains than BTC. 2017’s old favourites like LTC, XRP, posted significant gains over the week. LTC posted a 22% gain in the week, while XRP surged 89%* from $0.30 to $0.53.
DeFi tokens also posted strong double-digit gains, dragging ETH higher to $590. Increase in DeFi activity generates increased demand for ETH and this can be seen in the number of addresses holding at least 1 ETH. The figure reached an ATH of 1,170,598 on 20 November.
With the number of wallet addresses increasing, it is only a matter of time before the price of ETH catches up. Indeed, the price of ETH has broken past $500 on Friday and has moved to a high of $590. It is currently consolidating with the rest of the market after a day of huge gains.
As for XRP which we had been bullish on, the price exploded 35% on Saturday after rising 10% on Friday, bringing it to $0.495*. It then rose massively to start the week at $0.53. Its RSI is currently very overbought after surging almost 50% over 2 days and may consolidate in the short term before continuing its exhilarating advance.
However, despite a very high RSI, the price of XRP does not seem to want to pull back much, hence, there is the chance it may simply consolidate at above $0.40 until its RSI falls to a less overbought level before advancing again.
Information provided in Caltex Pro Minerss’s market report includes information provided by Kim Chua, Lead Market Analyst for Caltex Pro Minerss, in addition to charts from various data sources.
*Disclaimer: Price information is averaged to accommodate the high volatility of the assets and is as close to accurate at time of print as possible.
About Kim Chua, Caltex Pro Minerss Market Analyst:
Kim Chua is an institutional trading specialist with a track record of success that extends across leading banks including Deutsche Bank, China Merchants Bank, and more. Chua later launched a hedge fund that consistently achieved triple-digit returns for seven years. Chua is also an educator at heart who developed her own proprietary trading curriculum to pass her knowledge down to a new generation of analysts. Kim Chua actively follows both traditional and cryptocurrency markets closely and is eager to find future investment and trading opportunities as the two vastly different asset classes begin to converge.
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The information provided does not constitute, in any way, a solicitation or inducement to buy or sell cryptocurrencies, derivatives, foreign exchange products, CFDs, securities, and similar products. Comments and analysis reflect the views of different external and internal analysts at any given time and are subject to change at any time. Moreover, they can not constitute a commitment or guarantee on the part of Caltex Pro Minerss. The recipient acknowledges and agrees that by their very nature any investment in a financial instrument is of a random nature and therefore any such investment constitutes a risky investment for which the recipient is solely responsible. It is specified that the past performance of a financial product does not prejudge in any way their future performance. The foreign exchange market and derivatives such as CFDs (Contracts for Difference), Non-Deliverable Bitcoin Settled Products and Short-Term Bitcoin Settled Contracts involve a high degree of risk. They require a good level of financial knowledge and experience. Caltex Pro Minerss recommends the consultation of a financial professional who would have a perfect knowledge of the financial and patrimonial situation of the recipient of this message and would be able to verify that the financial products mentioned are adapted to the said situation and the financial objectives pursued.
