Crypto Market Forecast: W/C 9th November 2020

Prices in crypto markets rallied in a week where financial markets were driven by the uncertainty of drawn-out US election results. The Bitcoin price ended the week up 14% and hovers near the USD15,500 price level. Over the week the Ethereum price rose by ~14% and the Ripple Price was up ~5%. The overall market cap for digital assets rose by ~11%.

Bitcoin soared to new yearly highs at the start of the week with gains being driven by a weak dollar and concerns over the economic and political outlook of the United States. The rise coincided with Democratic nominee Joe Biden steadily gaining a lead in key battleground states. On Friday the US dollar sank to its lowest level in two months against a basket of peer currencies and Biden’s victory was eventually called on Saturday.

Investors appear to be betting that while Biden is set to become the President, Republicans will maintain control of the senate. A gridlock in Washington is fueling concerns around the short term strength of the US economy with Covid-19 cases continuing to rise across the country, curbing prospects for productive economic activity. The Federal Reserve will likely be forced into a position of massive quantitative easing to support the economy – leading to a weaker dollar and higher inflation

Declining dollar projections are pushing large investors towards alternative investments – an environment that will drive new demand for Bitcoin due to its fixed supply and programmed monetary policy. Combined with other bullish factors such as the halving, reducing miner sell pressure, and big-name corporates like Microstrategy, Paypal, DBS, and Square deciding Bitcoin is a must-have, the BTC bull run looks set to continue.

Also last week, Ethereum 2.0 phase 0 was formalized for a launch around December 1st. The deposit contract for the launch is now live and can begin collecting the funds required to trigger staking. The Ethereum foundation explained in a blog post how the launch is set to proceed. Prospective stakers will now be able to deposit their 32ETH, required to become an active staker, into the deposit contract via a dedicated launchpad. The contract must collect 1634 deposits of 32 ETH each for a total of 524,288ETH or about USD239 million to proceed with the launch.

This marks the first time that a clear date for the Ethereum 2.0 launch has been set following months of delays. Anticipation has been growing for years over the eventual launch of ETH 2.0 which will deliver a new staking based consensus model and a sharded blockchain. Assets built on the Ethereum blockchain were some of the biggest climbers in the last week with Aave (AAVE), Synthetic Network Token (SNX), and Yearn.finance (YFI) rising ~73%, ~51%, and ~40% respectively.

Crypto news for the week ahead

6th November – Symbol snapshot and launch confirmation

The NEM group has announced the launch and blockchain snapshot dates for the upgrade process to Symbol, its next-generation enterprise-grade blockchain solution that will replace the original NEM NIS1 blockchain and introduce the new XYM token to the ecosystem. The new Symbol public chain will be introduced in parallel with NIS and the two chains will operate side-by-side. The snapshots will occur between the 15th and 17th of December before the launch on the 17th of December. 1 XEM at the snapshot will equal 1 XEM + 1 XYM at Symbol launch. The price of XEM rose ~25% on the back of the launch news.

15th November – Bitcoin Cash (BCH) fork

Bitcoin Cash will hard fork on Sunday as part of a scheduled protocol upgrade. The upgrade is controversial and is expected to result in two chains after its implementation “Bitcoin cash node” and “Bitcoin cash ABC”. Bitcoin cash node looks set to be the dominant chain with far more miner support. A new chain means a new token too, however, exchanges may not support the less popular ABC coin if it does not support much hashrate. Kraken for example has said Bitcoin Cash ABC will only be supported if its hash power is at least 10% of the Bitcoin cash node Network. Even then, it will be traded as Bitcoin Cash ABC under the ticker symbol BAB.

Top 10 Crypto Summary

Gains in the Brave New Coin market cap Top 10 this week were led by Bitcoin and Ethereum. Ripple (XRP) rose by a steady 5% this week, with the group announcing on November 7th that it has established an office in the Dubai International Financial Centre (DIFC) to service its growing client base in the Middle East & North Africa (MENA) region.

Bitcoin Price Chart

Bitcoin bulls had another week to remember as the BTC price soared passed the USD14,000 and USD15,000 levels. Glassnode reports a total of 97% of all Bitcoin addresses are in profit and BTC has just crossed an unprecedented 100 days of its opening and closing price sitting above USD10,000.