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Crypto Market Forecast: Week of November 8th 2021

A curated weekly summary of forward-focused crypto news that matters. This week, layer 1 and metaverse tokens outperform BTC, the Bitcoin network prepares for its first major upgrade since August 2017 and Solana is now the 4th largest asset in crypto.

Digital asset markets enjoyed a strong week of trading led by a resurgent altcoin market. Bitcoin (BTC) ended the week up ~3%. It was, however, overshadowed by digital assets such as Ethereum (ETH), Binance-coin (BNB), and Solana (SOL) that rose ~9%, ~27%, and ~28% respectively last week.

Bitcoin’s dominance of the overall cryptocurrency market cap slipped from ~44.2% to 42.5% over the last week. There appears to have been a preference from traders to try and capture waves of price momentum by moving from one coin to another. Layer 1 tokens and metaverse tokens benefited from this wealth reallocation as crypto investors trying to maximize short-term returns moved into newer, speculative sectors.

Layer 1 tokens that support the base protocols of blockchains like Ethereum, Solana, Binance Smart Chain, Avalanche (AVAX), and Polkadot (DOT) were all big gainers. AVAX and DOT rose ~38%, and 24%. In 2021, the layer 1 smart-contract powered blockchains listed above appear to have hit a point of maturity. The majority have built functioning use cases centered around DeFi and NFT functionality. These projects have seen sharp increases in total value locked and transaction activity over the last six months.

Coins that are connected to virtual worlds have also had strong weeks following Metaverse plays from major corporations such as Facebook, Nike and Microsoft. The Sandbox (SAND), Axie infinity (AXIE), Illuvium (ILV), and Star Atlas (ATLAS) are up ~49%, ~11%, ~18% and ~16% this week as investors front ran the potential expansion of the ‘metaverse’ and new VC money investing in the space heading into the rest of Q4 2021.

The metaverse encapsulates the immersive online realms that look and feel like the real world but are digital, allowing humans to expand their capabilities within them. Metaverse crypto projects appear ideal for creating this sort of experience because of their ability to create internal economic systems using blockchain technology.

The correlation between Bitcoin and the S&P 500 has been growing stronger in the last month indicating that investor appetite for risk is increasing. As concerns surrounding global inflation and economic growth continue to persist, money is flowing into asset classes that offer high yields and returns.

The relationship between the two asset classes can flip based on global economic conditions. Data from Coinmetrics shows that on September 27th, the Pearson Correlation coefficient between the daily prices of the S&P500 and the US$ Bitcoin price was -0.011, currently it sits 0.11 as values in both investment categories rise rapidly.

Trading set-ups for the week

Pro trader Josh Olszewicz explores trading options and signals for BTC and ETH – and lays out the trading setups he’s watching for the upcoming week. Start your week off right with Josh’s thoughts on trading strategies on a weekly basis.

Bitcoin, ALTs and Ethereum – Trading setup for the week of the 8th of November 2021

Crypto news for the week ahead

November 14th-15th – Bitcoin Taproot upgrade

A week from now, the Bitcoin network is set to undergo a soft-fork that will be the blockchain’s first major update since August 2017 when Segregated Witness, SegWit, was introduced to the network. Taproot is set to introduce features like the Merkelized Abstract Syntax Tree (MAST) and Schnorr Signatures, that will improve Bitcoin’s privacy, efficiency and smart contract capabilities. Operations on Bitcoin are set to improve as a result.

November 11th – Parachain auctions continue

Following the allocation of the first Polkadot parachain to Shell. The network will allocate more parachains following auctions. There will be five auctions coming, starting 11th November, each lasting seven days. Polkadot’s parachains are the specialized, periphery blockchains that connect to Polkadot’s Relay Chain. They are core to the Polkadot multichain thesis and their launch should signal the release of Polkadot’s complete blockchain product. The start of the auctions have been major drivers of DOT price momentum. The asset is up ~54% in the last month and touched new all-time highs three days ago.

Top 10 Crypto Summary

Forecast 1-min

It was a strong week for the top 10 assets on the Brave New Coin market cap table. Solana (SOL) had a particularly strong week and has now risen to 4th on the Brave New Coin market cap table. Solana has emerged as the most likely platform to displace Ethereum as the leading smart contract blockchain in the space thanks to its low transaction costs and ability to attract top developers. DeFi Lama reports that Solana has just established a new DeFi TVL high of US$15.23 billion.

Bitcoin Price Chart

Forecast 2-min

Bitcoin (BTC) has had an up-and-down week but found momentum over the weekend and is trading over US$65,000. Onchain data suggests that even at these price levels it may be undervalued. Onchain data provider Glassnode reports that compared to historical periods when market cap far outpaced the value of transactions settled on Bitcoin, the current price rise is favourable. They report that transaction value is currently rising substantially compared to the BTC market cap which implies that the rising adoption of the asset has not been fully priced in.


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