Positive signal of the cryptocurrency market

Lately, we’ve seen a smile on the faces of all crypto investors because things are looking bright for the entire crypto space not just Bitcoin. Bitcoin has hit a new all-time high (ATH) and Ethereum has followed suit. Since Bitcoin hit a new high of $67,000, a number of altcoins rallied strongly, including Ethereum. Let’s analyze the market situation with Primexbt trading in the near future.

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The second-largest cryptocurrency by market capitalization, ETH, also managed to break a new all-time high recently, breaking through over $4,700. This bodes well for other major altcoins as they have been growing quite impressively in some cases.

Elsewhere, the S&P 500 Index rallied 2% last week, pushing 2021 gains to 25%. The Dow gained 1.4%, while the Nasdaq gained nearly 3.1% for its best weekly performance since early April. Oil prices are expected to continue to rise as all hopes of a supply increase have been dashed and the week started with a gain of more than 1%. Gold and Silver finally rose on the back of dovish Fed comments, both up about 4% last week and slightly higher today.

Meanwhile, the House of Representatives passed a bipartisan $1 trillion infrastructure bill on Friday night, in time to send it to President Biden for signature this week. The market will continue to be optimistic this week when President Biden signs the bill into law.

Good news keeps coming to the crypto market

Starting the chain of good news, CME will launch Micro Ether Futures on December 6 which has caused ETH price to skyrocket creating a new ATH of $4,640, followed by rumors that the SEC might approve a Grayscale conversion. Bitcoin Trust (GBTC) into a physically backed BTC ETF that keeps BTC price above $60,000. Even when the Fed announced a cut program on Wednesday, BTC very quickly recovered above $62,000 as it dropped to $60,000. This indicates strong buying at $60,000 for BTC.

With the continued rise in the price of BTC and with ETH breaking out of the old ATH, the trading volumes of both top coins have increased since bottoming in July. The highlight is that this volume has increased 7 times from just a year ago and is a 10 times increase compared to 2 years ago. If the uptrend continues, cryptocurrency trading could one day eclipse stock market trading.

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This time is different for the previous BTC.

This time when BTC broke above $60,000 was completely different from the last time BTC hit this level before. In April when BTC first inched above $60,000, funding rates were markedly higher. This time, while the funding rate is positive, it is far below the rate witnessed in April. Thus, this suggests that leverage is currently much lower than it was in April. This could mean that BTC has more room to move higher now than from the temporary peak from April to April. May.

The average margin rate in April was 70%, while it is now only about 46%, a huge drop. In fact, margin is currently at its lowest level of the year, even lower than when BTC hit $30,000 in June. This shows that leverage is at its lowest level of the year. which means that the BTC price double June to the present is led by spot buyers, who tend to hold higher than leveraged traders.

Although the price has risen above $60,000 during this time period, the amount of BTC being moved out of exchanges is still growing and even spiked in early November, indicating that spot buyers bought BTC and moved them out of exchanges for storage.

The number of transactions on the BTC blockchain is also increasing with the increase in exchange outflows, suggesting that OTC transactions may be heating up. The first 5 days of November saw over 1 million active addresses move BTC around. An increasing number of active addresses usually heralds a higher price ahead as the blockchain is very active, a sign of adoption.

As more BTC is moved into cold storage, the supply of illiquid BTC continues to grow, with the number of illiquid BTC supplies at an all-time high, exceeding 14.52 million units. This means that we may be getting closer to the day when the market realizes the BTC supply shock.

ETH becomes deflationary ahead of expectations

Not only is the supply shock for BTC growing, the supply situation for ETH is also tightening. The ETH network has seen a negative supply for seven days since the end of October, meaning more ETH has been burned than what is being mined. According to the data, the hard fork in London resulted in the permanent destruction of more than 790,000 ETH, worth more than $3.5 billion today. Taking into account the rate of newly created ETH, it sets the weekly net release ETH to be negative 8,034, which means 8,000 ETH will be removed from circulation every week.

Most experts expect ETH to deflate only after ETH 2.0 takes effect. The fact that it became deflationary in just three months at the London Fork shows how much ETH is being used on a daily basis and should be positive for the price.

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News of other cryptocurrencies

Recently, most of the news related to cryptocurrencies has been positive as the nascent asset class is recognized by more and more countries and traditional financial companies.

Australia’s largest bank, Commonwealth Bank of Australia, is enabling the ability to buy, sell and hold crypto assets directly on its banking app, making it possible for over 6.5 million users to buy coins. electronics comfortably.

Another country, Singapore, where much of Asia’s wealth is located, plans to become a hub for crypto and blockchain as its central banker sees a lot of potential in the industry. Singapore is currently hosting a week-long Fintech Festival until this weekend where various influencers in the crypto world will speak.

Altcoins start to appreciate

Altseason continues to be the name of the game as different alt-coins take turns moving higher. While many smaller cap coins like LRC and TRAC took turns up 100%, the larger caps also made significant gains. SOL broke its recent ATH of $218 to move higher at the start of its first Solana Conference this week, while AVAX also broke ATH after a custom-built AVAX version of blockchain explorer Etherscan launched.

News that Wrapped will provide support for Wrapped XRP (wXRP) on the Ethereum blockchain starting in December also sent XRP prices up in the short term. This means that the XRP token will be able to join the ecosystem of ETH, which has been instrumental music for many XRP holders who have been left out during the DeFi revolution. Perhaps it is time for XRP, which has been overlooked for most of this year’s market rally, to start playing catch-up to its peers.

Analysis by Ms Kim Chua, Market Analyst of Primexbt trading.

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