Crypto Market Forecast: Week of February 1st 2021
A curated weekly summary of forward-focused crypto news that matters. This week, the price of DOGE soars on the back of social media interest, Elon Musk adds #bitcoin to his Twitter bio, and XRP pumps thanks to the coordination of a few large Telegram groups.
The news cycle last week was dominated by Dogecoin (DOGE) and the Reddit crypto community. The Bitcoin price rose just 1% at week’s end, while the Ethereum price fell by 5%. Ripple (XRP), had a volatile week – surging to reach US$0.73 late on Sunday before crashing to hit 0.40 by Monday. Overall the pump left the XRP price up ~52% for the week.
Shiba Inu themed memecoin, DOGE, became the darling of retail traders across the internet last week rising ~329% and adding USD3.65 billion in new market cap. DOGE currently trades for ~USD0.035. The price jump began when trading platfom Robinhhood blocked retail traders from buying stocks such as Gamestop and AMC on January 28th. This pushed the thousands of traders operating on the popular /r/Wallstreetbets Reddit discussion forum, to shift their attention to ‘cheap’ cryptocurrencies and other lessor assets like Silver.
Crypto was an major beneficiary of the Wall Street shenanigans, with crypto-focused Reddit discussion forums like r/dogecoin, r/Bitcoin, and /r/Satoshistreetbets seeing huge pickups in subscriber counts over the last week, rising by ~384,000, ~224,000, and ~177,000 subscribers respectively. Dogecoin mania was also observed on microblogging and social media platform Twitter. According to digital asset data firm TheTie, Dogecoin set a new record for most tweets mentioning a cryptocurrency over a 24-hour period, beating previous records set by Bitcoin on January 2nd, 2021, and December 22nd, 2017.
Part of the DOGE surge was attributed to Tesla Inc CEO and newly anointed world’s richest man, Elon Musk. On January 29th, he posted a satirical image of a “Dogue” magazine featuring a whippet. While no context was provided for the image, most observers on the platform believed this to be a reference and potential endorsement of DOGE. In December, Musk had tweeted “One word: Doge” this was also taken as a reference to the digital asset and created a wave of bullish momentum.
Musk appeared on the clubhouse audio chat app on Sunday confirming that he was a supporter of Bitcoin and believes it will get broad acceptance in finance. Discussing DOGE he said. “Occasionally I make jokes about Dogecoin but they are really just meant to be jokes … but fate loves irony.”
Crypto news for the week ahead
6th February- Tomochain halving
Tomochain (TOMO) is a Proof-of-Stake blockchain that was originally built using Ethereum’s source code. This Saturday the network executes a block reward halving that will reduce the number of TOMO offered to miners as a block reward from 250 to 135. A halving typically leads to higher prices because they tighten supply, drive scarcity and reduce miner selling pressure. The price of TOMO has risen ~92% in the last month.
8th February- Launch of ETH futures on the CME
On Monday, the Chicago Merchantile Exchange (CME) will launch futures contracts for Ethereum (ETH). Each contract will have 50 units of ETH and will be open to trade for 23 hours a day from from 5:00pm to 4:00 pm Central time Sunday-Friday. Futures contracts allow investors to speculate on the price direction of an asset and are useful hedges to help prevent losses from unfavorable price changes. Three years on from the successful launch of Bitcoin futures on the CME the launch of ETH futures is a sign of the growing maturity of ETH as an asset.
Top 10 Crypto Summary
It was a mixed week of trading for large-cap assets on the Brave New Coin market cap top 10. XRP was the top performer, rising ~52%. While Reddit users appear to have fueled Dogecoin’s pump, some are pointing to messaging app Telegram as the driving force behind the XRP pump. A telegram group called Buy & Hold XRP (t.me/pumpxrp) was created on Saturday just before the XRP price spike and hit Telegram’s 200,000 group user limit within its first 24 hours causing an alternative channel called t.me/pumpxrpofficial to be created to handle the enormous interest.
Bitcoin Price Chart
A relatively flat week of bitcoin trade was punctuated by a short spike upwards on the 29th of January that took the bitcoin price above USD35,000. The pump occurred after Elon Musk changed his Twitter account biography to #Bitcoin, driving up social media interest in BTC. The asset subsequently retraced over the weekend but Musk’s bio remains unchanged.
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