The overarching DeFi craze seems to be cooling down a little. However, because DeFi money doesn’t sleep, it is likely that funds are just being poured into protocols like Harvest Finance, which just managed to cross $1 billion in Total Value Locked.
But, at the end of the day, the following chart says everything you need to know about what is occurring with DeFi right now;
While DeFi is cooling down, it seems that farmers are selling their harvest and putting it back into Bitcoin. This past week, Bitcoin managed to surge by a total of around 12%, which allowed the coin to surge higher and finally break the long-awaited $12,000 handle;
There are lots of reasons as to why this has started to happen right now. On a technical basis, Bitcoin broke out from a symmetrical triangle pattern at the start of the month, which was the first signal that it was ready to start moving higher once more.
However, even with the breakout from consolidation, it seems that the latest price increases are primarily fundamentally driven. The broader economy struggles as the COVID-19 virus starts to see a second wave passing through the Western world population. As a result, countries have seen the need to take further preventative measures as they begin to close hospitality businesses in the hope to curb the spread.
This has resulted in the need for further stimulus measures to come from the US government - in a year where they have already printed more money than the last 100-years combined. This week, there have been talks between Nancy Pelosi, the House Speaker, and Steven Mnuchin, the US Treasury Secretary.
These two parties are trying to reach an agreement on a stimulus bill that would see US citizens receiving around $1,200 in aid. There was a deadline for negotiations this week, and, although an agreement has not been met, it seems that the two parties are very close to agreeing. Furthermore, it is expected that the fiscal measures will come into action before the US Presidential Elections.
As a result of this promising news, it seems that traders are optimistic that further stimulus is indeed on the way. This is good for Bitcoin but very bad for the US Dollar. Printing more money erodes the purchasing power of US Dollars in everybody’s pockets. We only need to take a look at the US Dollar chart to take a look at how the stimulus, which started in March, has effected the market;
Front the chart above; we can see that the US Dollar has been tanking ever since the fiscal measures began in March.
While the Dollar falls, investors are forced to put their cash into safe-haven assets or face negative returns holding USD. Although many will choose to enter into Gold, some institutions are buying up Bitcoin right now. For example, MicroStrategy increased its Bitcoin holdings to $425 million this month as the negative returns on USD made it a simple decision for the CEO.
On top of this, news just came out that PayPal has finally joined the cryptocurrency revolution. The payments giant has confirmed that they will soon allow customers to buy, sell, and hold BTC and other cryptocurrencies on their platform through their online wallets. In addition to this, PayPal users will also have the opportunity to shop at over 26 million merchants in their network at the start of 2021.
This is EXTREMELY bullish news for Bitcoin, and it could not come at a better time to add to the bullish driving forces. We could even potentially see some fresh ATHs before 2021; if not, they are most certainly coming in Q1 2020.
So, where are the next stops for Bitcoin?
Well, we are currently at the $12,850 resistance so the next stop is certainty $13,000. Above $13,000, resistance is located at $13,250, $13,300, $13,475, and $13,570. Beyond this, resistance only really lies at $13,910 and $14,000.
On the other side, the first level of support is located at $12,600 which is the July 2019 High-day closing price. Beneath that, support lies at $12,500, $12,260 (.236 Fib), $12,160, and $12,000. Below $12,000, added support is located at $11,900, $11,600, and $11,310.
What coins can go up alongside Bitcoin?
Considering that I predict that most DeFi traders will sell their DeFi profits and jump on the leaving Bitcoin train, there won’t be much DeFi talk here today.
So, which coins am I sure about that will follow Bitcoin? You guessed it! The ever-money-making token exchanges.
Even though there are plenty of options to choose from, exchange tokens are the type of assets that you can be sure to follow Bitcoin. Whether you win or lose on your trades, the exchange takes their cuts and makes a profit. If the market is moving up, traders need somewhere to trade and place orders. The same is still true if the market is moving down.
I see these exchange tokens as somewhat of a casino. Regardless of the outcome, the house always wins.
1. Binance Coin $BNB
Current Price: $30.11.
Next Stops: $31.28, $32.57, $34, $35.90.
Binance Coin has been trading well throughout September and October. We can see that it is currently trading in an ascending price channel and has recently bounced from this channel’s lower boundary.
We can expect Binance Coin to continue trading within this channel until it breaks out in either direction. With the recent surge in activity and the recent bullish engulfing candle forming, we can expect BNB to head higher, with the first level of resistance being located at the October high-day closing price at around $31.28.
Above this, resistance lies at $32.57, provided by a long-term bearish .786 Fibonacci Retracement level. If it can break above the channel, resistance lies at $34 (1.618 Fib Extension), $35, and $35.90 (bearish .886 Fib Retracement).
What's been happening in Binance's Ecosystem Recently?
- They recently hosted another Initial Exchange Offering (IEO) for a project called Injective Protocol. To take part in these IEOs, users have to hold some BNB for a certain period of time before claiming tickets. This is good for the price of BNB. [LINK]
- They also rolled out their 13th phase of the Dual Savings products. These products allow holders to commit funds and earn a yield based on two assets - the yield and savings. Users have to lock their tokens up for a certain period of time to earn an annualized interest rate granted to them on the Delivery Date. The two tokens users can deposit are BTC and USDT, and they can earn up to 29% (BTC) and 22% (USDT). [LINK]
- Binance also added Vol Option to its Binance Mobile App. This feature is known as a Straddle, and it allows traders to simultaneously buy a put and a call option for an asset. This allows them to profit from either way that the market moves, with the maximum loss just being the premium paid for the options. [LINK]
- Lastly, Santiment has pointed out that BNB has show upticks in addresses interacting on the network. This is a good sign for bullish pressure ahead as more users are starting to use BNB. [LINK]
2. FTX Token - $FTT
Current Price: $3.76
Next Stops: $3.91, $4.20, $4.42, $4.60, $4.81, $5.00.
FTT peaked in September at around $4.90. From there, it tanked lower but managed to find support at a 6-month-old rising trend line to rebound. After rebounding, it met the resistance at $4.20 and returned to the rising trend line and the 100-days EMA.
Today, FTT surged higher to create a fresh October high above $3.71. If this trend continues higher, we can expect the first level of resistance to be located at $3.91 (1.414 Fib Extension). Above $4.00, resistance is located at $4.20 (1.414 Fib Extension), $4.50, $4.60 (1.414 Fib Extension), and $4.81.
Additional resistance lies at $4.91 and $5.00.
What's been happening in FTX Ecosystem Recently?
- FTX launched perpetual and quarterly futures for the new $FIL coin, and over 60% of the total volume for the coin was on FTX. [LINK]
- They updated their trading platform to allow users to modify their open positions straight from the charts. This is another professional grading trading tool that has been added to their platform, [LINK]
- It seems that cryptocurrency traders are placing last-minute bets on the outcome of the US elections. FTX has its own section for users to place these bets. Unfortunately, it seems to be TRUMP that is going to win, according to crypto traders. [LINK]
- They conducted the LEND to AAVE migration. [LINK]