Crypto Market Forecast: W/C 21 December 2020

Prices across cryptocurrency markets soared last week. The Bitcoin price passed through USD20,000 for the first time and has continued upwards from there. Pro trader Josh Olszewicz says with its former ceiling shattered bull market price discovery mode for BTC has now been activated. Bitcoin rose 26% over the week and now trades above USD23,000.

In terms of other digital assets, the Ethereum price is up ~12% and the Ripple Price was up 13%. Bitcoin forks Litecoin (LTC), Bitcoin Cash (BCH), and Decred (DCR) enjoyed healthy gains of 43%, 31%, and 28% respectively. With their core value propositions of being modified versions of Bitcoin these assets were standout performers amongst altcoins feeding off Bitcoin’s strong gains. The overall market cap for cryptocurrencies rose ~18% for the week.

Financial advisor and best-selling author Ric Edelman said last week that interest in Bitcoin from investment managers at institutions like pension funds and insurance companies is growing because of the “very very big” upside return potential of the asset. “The stock market makes 10% in a year. Bitcoin routinely moves up or down 10% in a day,” he said. According to Edelman, the potential for outsized, uncorrelated returns is what has driven institutional players like publicly traded business intelligence company MicroStrategy and insurance giant MassMutual towards investing in the asset this year. “We are clearly in an environment where Bitcoin is now mainstream, and this legitimizes the asset, and there’s going to be a continued snowball effect of this where people will begin to realize it’s routine, just as the gold ETF made gold a routine asset for portfolio diversification.”

The snowball effect was in full force last week as Bitcoin touched new all time highs and some significant crypto industry announcements hit the market – adding additional fuel to the crypto price rocket. On Wednesday, for example, the CME announced that Ethereum futures would be coming to the exchange in February, while the venture arm of US credit card giant American Express revealed that it had invested in the FalconX cryptocurrency trading platform. On Thursday, Coinbase announced that it had submitted a draft registration on Form S-1 with the SEC officially declaring its intention to proceed to an Initial Public Offering – and Paypal’s cryptocurrency partner Paxos announced it had closed a USD142 million series C funding round.

Crypto news for the week ahead

21st December – The Graph lists for trading on Kraken exchange

The Graph is an indexing tool and global API for organizing the Ethereum blockchain and making it accessible via the GraphQL query language. Its native token has risen more than 400% in the last week following a listing on Coinbase and its mainnet launch. Another major North American exchange, Kraken, opens the asset for trading this Monday with US Dollar, Euro, Bitcoin and Ethereum pairs.

22nd December– AMA with Waves founder Sasha Ivanov

Waves (WAVES) is a blockchain platform designed to enable users to launch custom crypto tokens without the need for extensive smart contract programming. Platform founder Sasha Ivanov will host an open community AMA (‘ask me anything’) on Tuesday. The project has had a bullish 2020 with its native token rising 615% YTD. Sentiment from an AMA has the potential to affect the short-term buy/sell action of a project’s token.

Top 10 Crypto Summary

It was a strong week for several large cap assets. The price of Binance coin (BNB) shot up on Sunday following a tweet from Binance CEO Changpeng Zhao (CZ) saying that discussions to accelerate the burn program for BNB were underway. More frequent burns of BNB would conceivably increase the value of the token by making it increasingly scarce.

Bitcoin Price Chart

Bitcoin bulls had a week for the ages as the Bitcoin price hit new price heights above USD24,000. Cryptoquant CEO Ki Young Ju reports that a number of large Coinbase outflows in recent months are tied to large OTC trades and the Coinbase custody service. This supports a growing narrative that institutions, not retail, have been driving the ongoing Bitcoin bull run.