Crypto Weekly: 15 – 21 November 2021
US Consumer price index rose by 6.2% from a year ago, the most significant inflation surge in 31 years. Similarly, Eurozone inflation faced a 4.1% increase in inflation, the highest it has been in 25 years.
A driving factor behind soaring US inflation rates has been the unchecked money printing by the Federal Reserve, a byproduct of monetary policies like Quantitative Easing by the US Government to stimulate economic recovery. The FED is anticipated to begin QE tapering this month; however, it may be a while for the excess liquidity in the markets to return to normal.
If US inflation remains at 6.2%, investors will need to generate at least a 7% return on investment to beat inflation. This is one of the reasons why so many have turned to Bitcoin as a hedge against inflation, considering Bitcoin’s track record of generating consistent returns and reliably outperforming Dollar inflation.
An increasing number of the world’s leading investors are revealing that they hold Bitcoin in their portfolio as a hedge against inflation, further driving mass adoption and pushing prices even higher.
Meanwhile, Bitcoin successfully implemented their much-anticipated Taproot Soft Fork upgrade over the past week. This upgrade will improve the scripting capabilities and privacy of the entire Bitcoin network and represents the first major upgrade for Bitcoin since August 2017.
Polkadot Parachain auctions started last week as developers began bidding on slots to build their own project-specific blockchains connected to the main Relay Chain and integrated with the Polkadot network. The slots bid on during the auction have an up to 2-year lease period with an option to renew. Winning parachain bids will require the winners to lock up a portion of their DOT tokens for the duration of the lease, which may result in a noticeable dip in the circulating supply of DOT on the market.
Finally, AMC Entertainment appears to be considering adding SHIB to its list of payment options. The giant movie theater chain has begun accepting BTC, ETH, LTC, and BCH for selected goods and services, following through on their promise earlier this year in August that customers would be able to pay for tickets and concessions with Crypto before the end of the year.
Weekly Technical Analysis: 15 – 21 November 2021
BTC faced a price pullback after setting a new all-time high last week; however, the long-term trend remains positive. The retracement did not break through the $63,300 support level, and resistance is set at BTC’s previous high of $69,000 for now.
ETH seems to be in the midst of a short-term correction after setting an ATH last week and is currently moving in a sideways-down direction. If the support at $4,500 can remain intact, traders could continue to purchase ETH while it trends sideways before it consolidates and goes on to challenge resistance at $5,000.
The Sandbox (SAND)
SAND has recovered somewhat from its short-term correction and its current trend has the metaverse token on course to challenge resistance at 120 Baht. Keep a close eye on the 70 Baht support level however, if support cannot remain intact this could spoil SAND’s uptrend this week.
Shiba Inu (SHIB)
SHIB prices have started to stabilize and are beginning to create higher lows. If support at 0.0015 can remain intact, there is a possibility of SHIB returning to an uptrend and for the meme token to target resistance at 0.0022 Baht this week.
Trading and Investment Considerations For The Week
The US SEC has rejected the VanEck Bitcoin ETF application, citing concerns regarding the market still remaining vulnerable to fraud and manipulation as well as the lack of protection for investors. The SEC has yet to approve a direct Bitcoin ETF; however, several applications will be up for review this November.
Despite the negative news, BTC prices were not negatively affected, with the market seeming to give equal weight to the record-breaking US inflation rates. It appears that buying pressure for Bitcoin is actually increasing, with more investors being drawn to BTC as a hedge against inflation.
Interestingly, while Bitcoin prices were largely unaffected by the news, spot gold prices surged in response to the rising fears surrounding inflation. While BTC prices continue to trend sideways, NFT Game tokens have had sporadic rallies but are not yet considered to have entered into a true bull run yet.
A stagnant market could be a prime opportunity to enter a position, particularly on tokens that have not begun to peak yet. Despite slowly returning to an uptrend, DeFi tokens have not attracted as much attention as the Smart Contract Platform tokens continuously setting record highs over the past few weeks. Those willing to hold should consider entering a position on the DeFi tokens that are beginning to rally.
The market outlook remains positive for the rest of the year, with the digital asset market expected to perform strongly for some time to close out the year. These lulls where prices trend sideways as the market consolidates its gains are excellent opportunities for investors to enter a position on tokens with strong fundamentals that have yet to enter uptrends. Despite the significant downside risk, hot tokens that are setting all-time highs could also be good to trade in the medium-to-short term if traders plan entries and exits appropriately.
*Materials on Bitazza Weekly Newsletter are intended to be used and must be used for informational purposes only. The views, information, or opinions expressed are solely those of the individuals involved and do not necessarily represent those of Bitazza and its employees. The information contained herein is not intended to be a source of advice or financial analysis with respect to the material presented, and the information and/or documents contained in this website do not constitute investment advice.
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