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Crypto Market Analysis: 9th November 2020

Bitcoin continues to be buoyed by positive price action, hitting a high of $15,800 on Friday. Altcoins started off the week on a downward trend but eventually managed a strong turnaround. And indices in the US saw some upward trajectories as markets digested the US election outcome after the uncertainty following polling day.

Simon Peters, analyst, eToro: Bitcoin blisters amid reiterations of bullishness 

Last week, we waxed lyrical about the positive price action, and bitcoin’s determined thrust upwards has continued. Hitting a high of $15,869 on Friday, investors have clearly been positive on the cryptoasset.

As I’ve mentioned recently, we’ve seen a good deal of positive news flow surrounding crypto in general, and bitcoin in particular, and it’s finally starting to bear fruit. It could be that the consistent institutional investment, positive on-chain metrics, PayPal developments and steady price rises have been snowballing into this current run to 52-week highs.

The recent on-chain difficulty adjustment must also have contributed to the latest price rise. It dropped to 16.878 trillion last Tuesday, the second largest decrease of all time. With fewer operating costs to cover, miners become less pressured into selling, which creates more demand for the cryptoasset; and bitcoin, like gold, is susceptible to supply and demand price movements. Given that we’ve already pushed past $15,000 (my newsletter can’t keep up with the increase!), my next target for investors to focus on would be $17,500.

I remain bullish on bitcoin, but I would caution that a retracement is on the cards – and shouldn’t be feared. It is also likely that investors, having seen their bitcoin holding appreciate, will look to take some of the profits and reinvest in altcoins or hold in cash.

If we do see a retracement, then I would like to see $14,000 hold as support. But using the 200-day moving average as a base, it is also feasible that $12,000 or even $10,000 could act as a bottom.

Ethereum 2.0 is here! We just need $124m ETH

The Ethereum Foundation excited the crypto community with its announcement that the beacon chain for Eth2.0 would be launching on 1st December at 12:00pm UTC. To trigger this genesis, 16,384 validators must each have deposited 32 ETH a week before that date. That would require 524,288 ETH – a substantial amount.

However, the number of addresses holding at least 32 ETH recently hit an all-time high of 126,852, according to Glassnode. This makes me think that it’s entirely feasible for the genesis to be triggered at the earliest date.

The price responded to the announcement instantly, jumping from $383 to $407 in 90 minutes. Although it dipped back down, Ethereum has continued to move positively, perhaps also buoyed by bitcoin’s exceptional run. With the genesis and staking rewards still on the horizon, I have plenty of time for ethereum bullishness.

David Derhy, analyst, eToro: Potential gaps in staking could be filled by Foundation 

Simon highlighted the large number of validator nodes needed for the genesis of Ethereum 2.0. While I agree that it’s high, I do think that the Foundation has some flexibility here.

For example, if they are a few hundred nodes short of initiation, then maybe Vitalik and his colleagues will just put the Eth up themselves to get it off the ground. They are obviously confident in the endeavour and I’m sure they will be happy to put their money where their mouths are. Or put their tokens where their tongues are.

Simon Peters, analyst, eToro: Fiscal stimulus within reach post-US election 

It would be remiss to discuss the week’s developments without mentioning the key driver of markets: the US election. I won’t discuss how many seats in the electoral college Biden and Trump have each won, as it’ll instantly be out of date by the time this goes out.

What I will note is that it’s tough to see how the community is reacting. Much focus has been on the election itself, as opposed to the potential implications for the cryptoasset sector, although there’s plenty of time for more of that later. But there will be impacts on wider markets instead of just crypto, which will in turn affect crypto to a lesser or greater degree.

Without wishing to sound like a broken record, the focus will now turn to fiscal stimulus. It is looking like Democrats will seek a larger package, which again will have an effect on all markets.

Looking ahead to next week, I’ll also be keeping an eye on the number of addresses ready to be validator nodes for Ethereum 2.0. If we see this grow in a meaningful way, then I would be confident that the 1st December launch date has every chance of happening.


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All contents within this report are for informational purposes only and does not constitute financial advice. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared utilizing publicly-available information.

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