Sirwin
Sirwin

Crypto Market Update and Investing Report 11.17 Is it time to worry?


Overview

  • On-chain analysis BTC
  • Trade set-up in STX
  • Crowdloan guide: Moonbeam
  • NOOBIES: 4 Year Price Cycle

Market Update

  • Bitcoin (BTC) continues to hover around the 60K support level dipping as low as 58.5K. Price has repeatedly visited this support level since the break of 60K on Oct 15. Alts have mostly taken advantage of the ranging price in BTC.
  • Avalanche (AVAX) is up 8% while most major smart contract platforms are struggling. AVAX gained 96% since BTC entered its current range on OCT 15. Sentiment is rising for AVAX and signs of the retail crowd are appearing. This could be a good interpretation that AVAX may be oversold.
  • ETH and BTC Dominance are both up to 19.54% and 44.03% as money is trickling in from risker positions.
  • Total Market Cap (TOTAL) is holding steady at 2.56 trillion.
  • Gaming and Metaverse tokens are holding strong.

RNDER        +31%

SAND         +7%

RFOX         +11%

NTVK         +12%

MANA         -.30%

 

Insight

     The market seems to be awaiting the next move. Signs of a strong rebound are currently not present. Let’s move to explore what is happening under the hood and try to lay out some possibilities. A good place to start is with on-chain analysis.  

     Long term holders (+155 Days) are typically considered the smart money and have a history of ignoring small corrections. They typically have more tools and resources available to make market decisions. The chart below filters out the insight of this cohort.

 

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     Looking at the chart we see that the dip has little effect on long term holders. During market tops and high-risk areas is when long term holders will typically begin selling strongly as indicated by the Long Term SOPR line.

     Tracking BTC reserves on exchanges is another good tool to see when the market is selling as participants onload their tokens to trade.

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     The chart indicates reserves have been holding steady after months of strong outflow. We also see they are at a noticeable low and in a continues downtrend for the year. The low supply on exchanges can eventually translate to higher prices as BTC resources begin to decrease if demand stays persistent. There are no indications of a large sell-off, but a larger dip is still possible. In the next report we’ll explore some short-term probabilities and begin to explore good entry points.

 

Trade Set-up

     Stacks (STX) is a platform that enables smart contracts and apps on Bitcoin. The protocol greatly benefits from the Bitcoin Taproot upgrade. STX has been ramping up operations in the past couple of months in preparation. If you read my past reports, we’ve been recommending to keep a close eye on STX.

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     A cup and handle pattern formed on STX on the daily chart. These patterns are often followed by a strong uptrend in price as traders are re-testing new highs after a short accumulation period. Keep an eye on the 2.00 – 2.15 support level to make sure it holds during this market dip. Watch the stochastic and wait for it to reach an oversold area. When the market begins to turn bullish, STX has potential to shoot out of the gate.

 

Crowdloan Guide Pt.3

MoonBeam

    Its looking like Moonbeam will be the winner of the first Parachain. This is no surprise. In the shortest possible explanation, Moonbeam is Ethereum on the Polkadot Network. It will allow ETH developers the easy opportunity to build on Moonbeam and the protocols to access the cross-chain benefits of the DOT network. Moonbeam will extend these features with on-chain governance and staking. Gas fees will be marginal on Moonbeam, making it an attractive option for users to utilize over Ethereum. Ethereum currently consumes a majority of activity in crypto. It has the most developers, users, transactions and protocols. Moonbeam benefits from all these.  

As far as Crowdloan compensation, participants of this Crowdloan will receive 1:1 DOT:GLMR tokens. Moonbeam is allocating 10% of its supply to the Crowdloan; which is lower than some of the other protocols. GLMR will have staking capabilities with a 5% inflation rate, which is comparable to most major layer ones. Token holders will also get the benefit of on-chain governance. 

Moonbeam has strong potential for growth after its integration and is likely to be the most widely used protocol on the Polkadot Network for a long time. With all this in mind, I have personally invested into Moonbeam through this Crowdloan. To learn more about Moonbeam go here.

 

Notable Events

  • Polkadot (DOT) will hold a crowdcast to hear the results of the on-chain community vote for the future branding of DOT tomorrow.
  • Unipilot (PILOT) and Raze Network (RAZE) will both have a Mainnet Launch tomorrow.
  • A16z leads a $13 million funding round for Nym, a privacy tech startup.
  •  

Major Market News

  • Moonbeam and KYVE begin collaboration to bring permanent Data Availability to Moonbeam and Moonriver. KYVE uses Arweave (AR) to leverage storage. AR also provides storage for all Solana history. This can only be bullish news for AR, who I consider to be one of the best tokens/protocols to currently own.
  • Kucoin Labs launches $100M Venture Capital Fund to support early stage metaverse projects. More funds entering the metaverse sector.
  • Fidelity becomes Canada’s first institutional Bitcoin custodian. They currently have 40 such instruments awaiting approval in the US. Large finance is making a strong move into crypto.  
  • ConstitutionDAO hits $30M in Ethereum to prepare to bid to on a privately owned copy of the Constitution. This amount was raised in less than a week with the intention of keeping the constitution in a “public sphere.” The auction will be tomorrow at Sotheby’s.

 

NOOBIE lesson of the day

The 4 Year Bitcoin Cycle

     To control the overall scarcity, the creators programmed supply reductions in Bitcoin over time. This reduction in supply is named the bitcoin halving. It has occurred every 4 years since the arrival of bitcoin and will continue in this pattern until 2140. Every four years the mining rewards(supply) are cut in half. It then requires twice the amount of computing power to create one bitcoin. Our current halving allows for the creation of 12.5 bitcoins every 10 minutes and in 2024 it will be reduced to 6.25. This process will continue until 21 million bitcoins have been mined.   

     The 4-year halvings have influenced the price patterns of bitcoin in what is referred to as the Bitcoin cycle. The cycles begin with the halving and end when the next one begins. These cycles are the cornerstone for most technical analysis and price predictions. The theory is, if demand for bitcoin stays the same over time and supply is cut in half, then price will increase. This is part of the scarcity structure of bitcoin and is reason to believe that bitcoin price will continually increase in the long term. Now that we know the basics, tomorrow we will dig into the cycle patterns and take a look at where we currently stand.

To read more about the halvings visit this site.   

 

Tomorrow

  • Short-term price predictions
  • Alcala Network (Likely 2nd Parachain)
  • Bitcoin 4 year-cycle pt.2

Hope you enjoyed the read. Feel free to message me on twitter or email me if you have any questions or suggestions about the content.

 

-Gabi          

    

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Gabi_
Gabi_

Market Research Analyst . Crypto Enthusiast. Hours of research condensed into a daily five minute report.


Daily Crypto Market Update and Trader Digest
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