BTC is Booming and Small-caps are Growing

Bitcoin

Bitcoin has been on the rise and has gone past the $60,000 mark for the second time this year. The levels of resistance at $56,400 and $57,300 dollars were recently demolished and the bitcoin’s journey above $60,000 dollar mark. The world’s biggest cryptocurrency has doubled its value in the three and a half months after the crash in late June. The recovery has since then been strong.

The October boom has been constant and the time of writing this article, the World Coin Index currently shows the value of Bitcoin to be $61,820. Based on what we’ve seen on Redot for the last 24 hours the Bitcoin Index topped at $62,122 while the lowest is $61,124 increasing the crypto market cap dramatically. Crypto trading is now on the rise due to bigger prices.

The SEC’s Office of Investor Education and advocacy tweeted late on October 14th, “Before investing in a fund that holds Bitcoin futures contracts, make sure you carefully weigh the potential risks and benefits.” In other words it is clear that the SEC will give the regulatory green light to funds that hold Bitcoin futures contract.    

The DeFi market is expanding

We already have a good idea that the crypto market is constantly in flux butaccording to the World Coin Index the trend from late 2019 is that DeFi or decentralized finance has been growing at a constant rate. Stablecoins limit the volatility of cryptocurrencies and here’s why:

  • DeFi technology has replaced the usual intermediaries by replacing them with smart contracts, making low-cost contracts without the involvement of any third party.
  • The market which was non-existent a few years ago has hugely risen in the last few months.
  • It constitutes just a fraction of the whole crypto market but it is still attracting huge competition which proves its importance.
  • DeFi market has huge opportunities for growth.
  • It must directly look to centralized markets for guidance and ideas.
  • Despite the huge number of crypto exchanges, there has been a move towards consolidation.
  • The platforms which capture the most users from the emerging market will eventually rise to the top.
  • After May 2020, the TVL into platforms such as Uniswap and Aave has grown from $1 billion to $88 billion.
  • Away from the huge market crash after the peak, there have been some incredible things happening in the Defi.
  • Some of these are new token models, new structures, next DeFi protocols networks, platforms, and DApps.

How is Bitcoin Dominance related to Altcoin Market

A pretty good statistic to take a measure of the broader crypto market is bitcoin dominance and Bitcoin index. Bitcoin used to be the only crypto available with an obvious market share of 100%. Since then altcoins like Ethereum and Litecoin have chipped away the absolute monarchy.

A few months ago Bitcoin dominance was 40% of the total crypto market but with heavy investments flowing it has now clawed back to 50%. Basically, money flows from the least risky asset to the most. So as investors put money in Bitcoin, and it is often used as a gateway to the crypto market. The bull market brings in new investors who make substantial profits. Once the bull market cools down, the profits are then into altcoins such as Ethereum, Polkadot, etc. Once this happens, the prices of altcoins go up and the value of BTC falls. This is really interesting and makes us wonder what we will see in the next alt season.

So when money flows into bitcoin, the price of bitcoin beats the price of altcoins. Whereas when money is poured into altcoins, bitcoin‘s dominance decreases.

Top altcoin gainers and losers

The biggest gainer in the top 100 coins are NUCypher which has gained over 435% in the last 30 days with Wrapped Bitcoin gaining 28.34% in the last month completing the top ten. SHIBA INU, Axie Infinity, and DYDX have also made substantial gains among the top 100.

Top biggest losers in the Top 100 have been Houbi Token which fell by half its value, followed by Synthetix losing a third of its value. The top ten losers will be wrapped up by Filecoin which has lost around 24.48% and now stands at 67.61 USD.

BTC Technical Analysis: All eyes on Altcoins

Bitcoin has boomed over 7.6% in the last few hours. All altcoins are lower than the market leader with the exception of MATIC which was up by 12.2% against Bitcoin. What drove the price of BTC higher is that the USA SEC is allowing the first BTC futures exchange-traded fund. Few key points:

  • BTC had moved past the $57200 area in the last few days which was the final resistance before it could move to an all-time high.
  • This is in fact happening right now.
  • The tech indicators are showing a bullish outlook.
  • The RSI is back above the 70 mark. It is a momentum indicator.
  • There seems to be a bullish movement even though it is evident that it is overbought.

There might be some resistance but the exponential moving average ribbon created in the last 5 hours is providing support.

ETH Technical Analysis: A New Movement to Come

Between the period of early May to the end of August,  Ethereum has shown a double top pattern which is considered Bearish. This was combined with a bearish divergence in the RSI. The RSI, a momentum indicator has made a lower high, at the same time, the price reached a double top. This proves price increase is not related to buying momentum. These mixed readings will compel us to look at a lower time frame in order to understand the direction of trends. A few factors that determine the price for Ethereum on redot.com and other major exchanges:

  • On the first of October ETH broke out from an ascending parallel channel.
  • This reinstated and validated its upward trajectory in the last month.
  • On the dates of October 4th, 11th, and 13th, Ethereum managed to bounce resistance lines that have transcended into support systems.
  • The final bounce has triggered an upward movement and. ETH is now expected to move above the next resistance area.
  • There should be a sharp upward movement and reach values which it reached in September and above.

The Bitcoin rise over the last few months is surely expected to continue. A number of investing firms including Invesco, VanEck, and Galaxy Digital have filed with the SEC for bitcoin futures ETF’s. This has been awaited for a long time by Bitcoin Bulls, because they simply think that having an ETF will make it easier for the average investor to buy crypto. The action is still not over.

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