The Weekly Recap: Week 46

KEY TAKEAWAYS

  • BTC broke through the $16k level for the first time since 2018, carrying on the bullish uptrend
  • The DeFi space is also gaining momentum, with total valued locked uptrending for two consecutive weeks
  • Cumulative inflow to GBTC outperformed gold ETFs, which implies some investors are seeing Bitcoin as an alternative to gold

Bitcoin 

Last week was yet another exciting week for Bitcoin, which opened at around $15,570 and closed at $15,996. BTC broke through the $16k level on Nov 12, and had been buoyed to touch the $16.5k ceiling, albeit briefly. This represented uncharted territory for BTC, at least this year, with the next barrier at $20k. 

Though Bitcoin had been trading above $16k level for two consecutive days, it was unable to maintain momentum, dipping below $16k over the weekend and retreating back to a narrow trading range.  

Analysts believe that if BTC can regain a strong foothold in the low-$16k range, it has the potential to rise to $17k and beyond, without much resistance. 

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Source: Bybit

The market dominance of Bitcoin saw a slight increase to 65.5%. Here is a breakdown: 

BTC ETHBCHLTC XRP LINK 
Market Share65.52%11.27%1.03%0.92%2.70%1.04%
Change +0.43%-0.35%-0.10%+0.01%+0.10%-0.09%

On-Chain Activities 

On-chain fundamentals continued to support the upward momentum of the price. Trading intensity also increased, indicating continued and sufficient demand for BTC despite the price inflation. 

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Source: Chainalysis

Inflows to exchanges remained high in the first half of the week, before spiralling down sharply on Nov 11. This was followed by a consecutive drop to the new monthly low, which sits well below the 180-day average.

In the weekend that followed, mining pool BTC sent to exchanges saw a significant decline from the first half of the week, while most BTC remained in transit from exchanges to private wallets, which could indicate that miner selling pressure has subsided. 

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Source: Chainalysis

Notwithstanding the brief return of volatility, the Crypto Fear & Greed Index still points towards extreme greed. 

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Source: Alternative.me

Ethereum & DeFi 

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Source: Bybit

ETH’s price dropped on Monday following the promising news of a potential Covid-19 vaccine. Though this didn’t last, and the price experienced an upward trend above the $460 mark on Nov 12 — a gain of 10% since last week. Ethereum’s service outage on Wednesday caused some delays with the price feed of ether and ERC-20 tokens but didn’t cast much of a shadow on the price, which didn’t waiver and instead posted a 3% gain on the same day. Though this does raise questions on the network’s capacity to weather the upcoming upgrade.

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Source: DeFi Pulse

It has been a bullish week for the DeFi space as well, with DeFi “blue-chips” leading the rally. The total value locked in DeFi has been uptrending for two consecutive weeks, reaching a new high on Nov 14. On the other hand, Uniswap became the first DeFi app to cross the $3 billion mark on Wednesday, a testament to the robust appetite for DeFi protocols.

What to Expect

Celebrated hedge fund manager, Stanley Druckenmiller stated during an interview that he believed that bitcoin could perform better than gold. Meanwhile, Grayscale’s Bitcoin Trust (GBTC) saw cumulative inflow through October, which has outperformed gold exchange-traded funds (ETFs), and lends support to the assertion that investors previously invested in gold are looking at bitcoin as a new alternative.  Though some might experience a sense of déjà vu, the current rally is much more gradual than the 2017 frenzy, where the market was buoyed by extreme volatility. Though many investors expect BTC to continue the bull charge, some whales already believe that the rally might have topped out in the short-term and are beginning to sell. As a result, investors should also brace themselves for increased volatility and price appreciation.