Stock Analysis & Ideas

This Week in Bitcoin: Momentum Cools after ATH

After overpowering the previous week’s resistance, Bitcoin prices reached a new all-time high this week, prompting speculation of a sustained bullish run through the end of the year.

The Fundamental Look

The world’s largest cryptocurrency by market cap continued its dream run, as BTC prices rallied to unprecedented highs of $68,568. This is the first time Bitcoin has managed to crack $67,000 resistance, sparking forecasts that the digital asset may well continue its upward trajectory until the end of 2021.

Still, Bitcoin has been retracing since reaching fresh highs. Experts attribute the dip to the Tesla (TSLA) stock slump combined with Apple (AAPL) CEO Tim Cook denying any plans concerning cryptocurrencies despite highlighting his crypto ownership.

Data from TradingView indicates that the sudden price drop in BTCUSD mirrored the turbulence in Tesla shares following Elon Musk’s confirmation that he will sell 10% of his holdings.

A report by on-chain analytics firm Glassnode indicates that whale accumulation continues to grow, with BTC’s supply that has remained inactive for almost the past three months bouncing to a record high of 85%.

Long-term HODLers, meaning addresses that haven’t moved their assets in the past year, are actively stockpiling BTC, with some addresses moving 6,500 BTC daily. The report further suggests that more than 5,000 BTC (approximately $338.6 million) was withdrawn from centralized trading venues last week.

Amidst the rising demand for Bitcoin ETFs and the soaring success of ProShares BITO ETF, more institutions are lining up for approval. Direxion, a provider of financial products known for its leveraged ETFs, has applied to the Securities and Exchange Commission (SEC) to endorse two products. Likewise, cryptocurrency lending firm BlockFi has filed paperwork with the SEC to launch a digital asset-backed Bitcoin exchange-traded fund.

In mining news, American Bitcoin mining company Marathon Digital Holdings has increased its total BTC holdings to around 7,453 BTC after mining 417.7 BTC in October. As such, the company’s market value has reached almost $457.4 million, while the total liquidity has touched approximately $478.3 million.

In terms of adoption, Eric Adams, the newly elected Mayor of New York, has publicly voiced his support for Bitcoin, reiterating his plans to make New York the Bitcoin capital of the U.S. Miami mayor Francis Suarez also took to Twitter (TWTR) to disclose that he will be accepting his next paycheck in BTC. 

Whales Of The Week

  • November 4: 6,990.225 BTC moved from multiple addresses to an unknown wallet
  • November 5: 5,295.664 BTC moved between unknown wallets
  • November 6: 5,000.000 BTC moved from Coinbase to Poloniex
  • November 6: 6,000.000 BTC moved from multiple addresses to OKEx
  • November 7: 9,839.999 BTC moved from multiple addresses to Huobi
  • November 8: 15,099.813 BTC moved between unknown wallets
  • November 8: 15,078.213 BTC moved between unknown wallets
  • November 8: 8,786.999 BTC moved between unknown wallets
  • November 9: 8,140.059 BTC moved from multiple addresses to an unknown wallet
  • November 9: 7,228.426 BTC moved between unknown wallets

The Technical Take

Bitcoin is making the most of Moonvember after the seminal cryptocurrency managed to reach a fresh all-time high of around $68,568 against the U.S. dollar over the last week. Compared to its closest peers, BTCUSD rose 7.7%, outpacing the 3.8% gain in ETHUSD despite underperforming the 9.6% climb in ADAUSD.

Interestingly, the pair might be setting up for a cup and handle bullish pattern, potentially extending the recent gains in BTCUSD as the handle visibly forms on the four-hour chart. 

Yet, despite the recent upward momentum and a fresh all-time high, BTCUSD could be slightly overbought and set for a brief technical pullback. With the Stochastic Oscillator trending above the 80.0 level and setting up for a possible move back below, the %K line (blue) crossing the %D line to the downside suggests that a retrace might be imminent.

A close look at the key levels to watch shows that the recent head and shoulders bullish breakout higher ran to the new all-time BTCUSD high, which is new secondary resistance around $68,500. To the immediate north of current market prices is resistance at $67,000. On the downside, support sits at $65,950 and $64,250, with any deeper breakdown beyond the head and shoulder neckline possibly opening up for a further drop to the shoulder line at $60,800.

Disclosure: At the time of publication, Reuben Jackson did not have a position in any of the securities mentioned in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of Tipranks or its affiliates, and should be considered for informational purposes only. Tipranks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. Tipranks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by Tipranks or its affiliates. Past performance is not indicative of future results, prices or performance.

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