Bitcoin's Bumpy Road To $80,000

November 22, 2021

Cryptocurrencies: Weekly Update

By Holden Milstein


Volatility has re-emerged in the cryptocurrency market, with a roughly 15% marketwide drawdown to start the week, and then a strong recovery through the weekend.

If you were watching Bitcoin (BTC) and Ethereum (ETH) you may have noticed that they tumbled below key supports at $60,000 and $4,000 respectively. These psychological levels had to be reached by bears in order to flush leverage out of the market during a large options expiry day this Friday.

Decentralized finance coins led by ETH have already recovered a good portion of the week’s early losses, but Bitcoin still has a ways to go in order to finish out the year strong.

Other events this week...

Biggest Winners: Avalanche (AVAX) was a top performing large cap coin this week, up +41% while the remainder of the market struggled. Other Decentralized Finance coins appear to be leading the market recovery as well, including Ethereum (ETH), Solana (SOL),  Polkadot (DOT), and Algorand (ALGO).

Another surprising winner this week was Crypto.com (CRO), up over 80% after the announcement that the company purchased the naming rights to the LA Clippers Arena, as well as the coin CRO being listed on Coinbase’s exchange. A double whammy!

Biggest Losers: Meme coins including Shiba Inu (SHIB) and Dogecoin (DOGE) were each down over 12% this week. Likely, confidence in less serious cryptocurrencies was shaken as even trusted large caps sold off. Many meme coins and lesser known large cap projects have been slow to recover this weekend as many fly to BTC, ETH or cash for safety until volatility calms down a bit.

What to watch: A major recovery in large cap coins like ETH and SOL has already begun, but with strong momentum from Bitcoin it would be no surprise to see recent highs around $69,000 retested in the near future

Inflation is mounting at a global scale almost as quickly as cryptocurrencies and blockchain technology are being adopted. As we prepare for the end of 2021, look to see how Bitcoin and the crypto market respond to this worldwide stress test. Will the coin turn out to be used as the inflationary hedge that many believe it is?

Many (including myself) still expect Bitcoin to reach new levels as high as or close to $80,000 by the end of 2021, based on the Stock-to-Flow model by PlanB as shown in the chart below:

blank

You can read more about the S2F model here.

With Bitcoin having regained the $60,000 level already, strong momentum could very easily carry the coin to $70,000 in the next few weeks.

You can also expect new crypto buyers to emerge as the holiday season comes around and supply chain issues make it difficult to get your loved ones gifts in time. I will personally be gifting NFTs to my friends this holiday season!

We need to see a daily close above both the $60,000 level and the 50-day Moving Average. With momentum having been reset from overbought levels at the beginning of the week, expect a bit of consolidation before another big move in Bitcoin.

blank

Ethereum has already regained its 50-day Moving Average and looks poised to make a significant move back towards $5,000, with strong support at the $4,000 level being shown after ETH became oversold to start the week but bounced quickly.

blank

If you believe that crypto will still finish the year strong and continue pushing to new highs, you may want to consider making some trades before the Thanksgiving holiday gives us a shortened week for the stock market.

You should expect to hear cryptocurrencies being discussed around the table this year when it comes time for everyone to say what they’ve been most grateful for! Hopefully, the market will give us a little bit more to be grateful for through the coming holiday.

To track our CryptoPulse Quant trading strategy or use our crypto tools and resources, please check everything out here:

Leave a Comment or Reply

Your email address will not be published. Required fields are marked *