Crypto Weekly: 4 – 10 October 2021
Over the past 11 years, Bitcoin has historically performed strongly during October. This has led to many in the Crypto community affectionately adopting the term “Uptober” to describe the Bitcoin recovery that takes place around this time of the year.
Bitcoin has opened October with a 10% jump upwards to $48,000, which in conjunction with Bitcoin’s historical tendency to enter strong uptrends during the last quarter of the year, has led to many investors and analysts anticipating a return to new highs for Bitcoin in the coming months.
This includes leading investor PlanB, whose stock-to-flow valuation model is predicting that Bitcoin will close the final months of 2021 at $63,000, $98,000, and $135,000, respectively.
Meanwhile, US Federal Reserve Chairman Jerome Powell has publicly stated that despite their belief that more regulation may be required to reduce risk, the Federal government has no intention of following China’s example in banning access to Cryptocurrencies within the US.
DeFi Analytics platform DappRadar reported that the total value locked (TVL) across DeFi protocols has grown by 936% over the past 12 months. DappRadar reports a TVL of $114.8 Billion, of which 68% of all collateral locked in DeFi is in Ethereum, with BSC being the second-largest blockchain in terms of TVL. The report also points out that NFTs saw record-high trading volumes this past August.
Interestingly, financial giants, JPMorgan have commented that there will likely be a significant increase in the number of investors entering Ethereum, citing the growth of DeFi and the NFT industries as the reason behind the rapidly growing demand amongst investors. JPMorgan has also noted that Ethereum futures premium on the CME is trading higher than ETH prices on spot markets.
Finally, prices for AXS have surged by over 50%, pushing prices for Axie Infinity’s native token to an all-time high above the $120 level following the launch of AXS staking, as well as Axie’s plans to launch their own Decentralized Exchange.
Weekly Technical Analysis: 4 – 10 October 2021
BTC has rebounded strongly, with an opportunity for a long-term bullish reversal if BTC can successfully break through resistance at the $53,000 level. However, BTC’s rally may be spoiled if the support level at $45,200 cannot remain intact. In the short term, BTC could also face a mild correction if it fails to break through the $48,000 level.
ETH had a similar rally and was able to break out of its sideways downtrend. If ETH can break through resistance at $3,700, look for ETH to revert to a long-term uptrend. Keep an eye on the support level at $3,200 as ETH attempts to continue its rally this week.
UNI is in the middle of a strong recovery this week and will be looking to test the 1,000 Baht resistance level. UNI will have to remain above its 750 Baht support level this week to confirm the recovery.
C98 has reversed into a short-term uptrend and will be looking to challenge the 144 Baht resistance level this week. If support at 120 Baht can remain intact, look for C98 to continue to create new highs. C98 is one of the DeFi tokens that are just beginning to show signs of a rally.
Trading and Investment Consideration For The Week
If history is any indication, the last quarter of the year could prove to be strong months for Bitcoin. In 2013 and 2017, Bitcoin set new all-time highs within the year’s final three months despite facing corrections in September.
Additionally, the US Stock market historically performs quite well towards the end of the year, meaning that nothing in the traditional assets market should affect the anticipated upswing in the digital asset market. The only short-term risk to keep track of is the looming threat of a US government shutdown; however, overall, shutdowns have had little lasting effect on the digital asset market.
Furthermore, it is possible that Bitcoin prices are approaching the end of their Wave 4 retracement, further fueling speculation that Bitcoin will successfully set new highs before the end of the year.
Similarly, altcoins are starting to rally, with many tokens successfully setting new highs as we enter the week. Native tokens of Smart Contract platforms, DeFi tokens, and NFT and Gaming tokens are showing signs of recovering into uptrends, and traders should keep a close eye on any tokens that are showing signs of outperforming the market this week.
Even though the market outlook is beginning to improve, traders should still practice disciplined portfolio management and manage risks accordingly. Bitcoin will have to surpass the $53,000 level, the peak of its previous recovery before the pullback, in order to confirm that the market has returned to an uptrend.
*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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