The Cryptocurrency market this week has been focused on Bitcoin’s (BTC) recovery from last week’s $43,280 spike low. BTC has successfully regained the $46,000 support level, which also happens to coincide with its 200 Day Moving Average (DMA). Large-cap cryptocurrencies appear to be accumulating at higher levels as we approach October, which has historically been one of the crypto market’s strongest months.
Areas to focus on from this week...
Biggest Winners: Avalanche (AVAX) +35% 7-day increase & raised $230 Million through token sales, Shiba Inu (SHIB) listed on Coinbase
Biggest Losers: Solana (SOL) -17.63% 7-day decrease
What to watch: Bitcoin ETFs, Ethereum (ETH) bounce from support at 50-DMA, BTC supply, Layer-1 Decentralized Finance
Bitcoin moved into bullish breakout mode on Tuesday, as the 50-DMA climbed above the 200-DMA, forming a golden cross pattern. This pattern occurred while BTC has been stuck in a trading range between $44,500 and the psychological $50,000, potentially serving as a catalyst for a breakout from this range in the coming weeks.
Blockchain analysis shows a decrease in liquid supply of BTC (currency existing within exchange portfolios or offered by liquidity providers). Historically, when the illiquid supply of BTC has increased it has been a key indication that whale and institutional investors are accumulating more of the currency and transferring their coins into cold storage.
When whales are rapidly buying BTC, it drives both the price of the asset higher and decreases the circulating supply, creating a supply squeeze.
With $50,000 as the next major resistance level to beat, Bitcoin’s consolidation within its current trading range has many analysts preparing for a large breakout to new all-time highs by the end of 2021.
Aside from BTC, the altcoin space is continuing to boom with Layer-1 cryptocurrencies, or projects that aim to serve as an extra layer to larger networks like Ethereum in order to aid in processing transactions and managing network applications.
Ethereum (ETH) is the largest decentralized finance network by market cap, and is still relatively new, only existing since 2015. The Ethereum network is a public sandbox for developers from anywhere in the world to create decentralized applications of all sorts, which has overloaded the Ethereum platform and made it difficult to efficiently scale.
With high transaction fees and an increasing rate of network traffic, large projects like Ethereum rely on Layer-1’s like Avalanche (AVAX), Solana (SOL) and even Cardano (ADA) to handle much of the world's blockchain activities.
Ethereum has maintained support at its 50-DMA, and looks to have major upside potential above the $4,000 resistance level.
In other DeFi news, Solana (SOL) has finally fallen down to support after a hot streak of 8 consecutive green weekly closes. Look for SOL to hold support at $150 for the time being.
Lastly, Shiba Inu (SHIB) saw an over 25% 1-day spike this week upon being listed on the Coinbase trading platform. Famously known as a meme-coin with no serious technology or use cases, SHIB goes to show that even a nothing project can still see rapid growth when promoted by the right entity (not dissimilar from Elon Musk and Doge!)