Crypto Monthly Technical Analysis Report | 03rd-November-2023

On Thursday, the broader crypto market experienced gains following the decision by the US Federal Reserve to leave its benchmark interest rates unchanged. This market uptrend was largely driven by a weaker US dollar, as Federal Reserve Chair Jerome Powell indicated a potential end to the rate-hiking cycle. During Asian trading, the US dollar index declined by over 0.5%. Bitcoin, the largest crypto by market capitalization, surged by 2.73% to $35,402.40. It reached an intraday high of $35,902.02, marking its highest level since May 2022. The total market capitalization of the global crypto market exceeded $1.3 trillion in the last 24 hours, with Bitcoin’s market cap reaching $689 billion. Among other crypto assets, Solana was the top gainer, rising over 12%. Ethereum, the second-largest crypto, also saw gains, increasing by 1.68% to reach $1,834.89.

Bitcoin’s recent bullish momentum, which led to a 27.9% gain in “Uptober,” appears to be cooling off as the crypto experienced a 2% intraday decline on November 2nd. Despite the positive market reaction to the Federal Reserve’s decision to pause interest rate hikes on November 1st, concerns stemming from BTC derivatives have led to a perceived overheating of Bitcoin’s price. It’s important to note that not all analysts are alarmed by the contraction in Bitcoin’s price. Some believe that this may signify the start of a new bull run. Despite the setback in Bitcoin’s price on November 2nd, a significant percentage of wallets have reached year-to-date highs in terms of profitability. Currently, over 81% of both short-term and long-term holders are in a profitable position. However, it’s important to note that while a record number of wallets are in profit, traders are still below the realised profit level seen on October 24th. This suggests that while many investors are in profit, the overall market dynamics may have shifted.

Ethereum’s price has faced a 14.7% decline since reaching its peak at $2,120 on April 16th, 2023. Nonetheless, two derivatives metrics are showing an unusual level of bullish sentiment, surpassing what has been seen in over a year. This has raised questions about whether this optimism is a broader reaction to Bitcoin’s surge above $34,000 on Oct. 24. Investors often look at multiple indicators to gauge market sentiment and trends. In this case, while Ethereum’s price has experienced a significant drop since April, these specific derivatives metrics are indicating an unexpectedly positive sentiment. This suggests that investor attitudes might be influenced by broader market factors, such as the performance of Bitcoin. One potential explanation for the growing optimism among investors utilising Ethereum derivatives is the overall market’s heightened anticipation concerning the potential authorization of a Bitcoin exchange-traded fund (ETF) in the United States. At the same time, Ethereum’s rivals are encountering difficulties as software developers become aware of the expenses linked to the upkeep of a comprehensive transaction ledger on their networks.

After a two-day policy meeting, the Federal Reserve opted to keep interest rates at their current levels. The decision comes as Federal Reserve officials debated whether the existing financial conditions were stringent enough to curb inflation or if further measures were required for an economy that has consistently exceeded expectations. Despite this decision, Fed Chair Jerome Powell didn’t rule out the possibility of one more interest rate increase later in the year. However, he also recognized that monetary conditions had significantly tightened in recent months. This statement from Powell was interpreted by the markets as a sign that the Fed might potentially start reducing rates by mid-2024.

Technical Outlook

Bitcoin:

Bitcoin was trading in a range from $25,000 to $28,500 and was taking good support at the key level of $25k (Horizontal Trendline & 50% Fibonacci Retracement Level). The asset finally gave a breakout above the range and started moving upwards. The prices broke the long-held resistance of $32,000 and rallied up to $35,984. BTC has a resistance zone from $36,000 – $36,500. If it breaks, closes and sustains above this level then we can expect it to further rally up to $40,000.

Ethereum:

ETH after taking multiple support at the key level of $1,530 (78.6% Fibonacci Retracement Level) started moving up by forming a ‘Higher High Higher Low’ pattern. The asset broke the long-held resistance of $1,750 and rallied up to $1,875. Currently, ETH is consolidating in a broad range between $1,770 to $1,850. The asset has a strong resistance zone from $1,950 to $2,000 whereas $1,750 will act as a strong support.

BNB:

BNB was trading in a range from $205 to $220 over the past two months. The asset finally gave a breakout above the resistance of $220 and rallied up to $238.1. BNB has a strong resistance at $240 and $255. Whereas $220 will now act as a strong support for the asset.

Weekly Snapshot:

Market Updates:

• Sam Bankman-Fried was found guilty of two counts of wire fraud, two counts of wire fraud conspiracy, one count of securities fraud, one count of commodities fraud conspiracy and one count of money laundering conspiracy by a jury in New York
• Payment giant PayPal has received a subpoena from the United States Securities and Exchange Commission (SEC) regarding its U.S. dollar-pegged stablecoin.
• Three Satoshi-era Bitcoin whale addresses that have been dormant since November 2017 transferred 6,500 BTC, worth roughly $230 million, on Nov 2nd. Satoshi-era BTC refers to the very early stages of the Bitcoin network when it was still relatively unknown.