1. Market Wrap: Bitcoin All-Time High Expected, but Not Before a Pullback
The options market is placing a 20% probability on bitcoin ending the month at a new all-time high above $65,000.
Bullish sentiment continues to grow after bitcoin’s price broke above $57,000 on Monday. BTC is up about 3% over the past 24 hours, extending its outperformance compared to alternative cryptocurrencies.
Analysts see continued upside, with some calling for a return to the all-time high near $63,000 this quarter.
“The crypto rally is impressive since it occurred in the face of a broader risk-off environment in both equities and bonds, with crypto markets seemingly decoupling from the equities markets,” Coinbase wrote in a newsletter last week to institutional clients. “We are seeing BTC clearly lead this market up as evidenced by bitcoin dominance (BTC market cap relative to the total crypto market cap) reaching multi-month highs.”
The initial BTC spike last week could be the result of traders taking large positions ahead of a rumored approval by the U.S. Securities and Exchange Commission of a futures-based bitcoin exchange-traded fund (ETF).
For now, technicals suggest the current rally is due for a pullback. The recent uptrend appears to be exhausted, according to Katie Stockton, managing director of Fairlead Strategies. Stockton expects about two weeks of price consolidation toward $47,000-$48,000, which is where the September sell-off stabilized.
Bitcoin (BTC): $57,542, +3.9%
Ether (ETH): $3,527, +0.0%
S&P 500: -0.6%
Gold: $1,755, -0.1%
10-year Treasury yield closed at 1.612%
Bitcoin all-time high within reach
The options market is placing a 20% probability on bitcoin ending the month at a new all-time high above $65,000, according to data provided by Skew. BTC is currently about 10% below the all-time high of $64,863 reached on April 14.
Analysts expect further upside due to the resurgence of buying activity and seasonal strength in the fourth quarter.
“Today’s leg higher, after a dull weekend session, keeps the bullish technical pattern of higher lows and higher highs in place, pushing BTC toward the double top around $59,580 made in May,” Nick Cawley, strategist at DailyFX, wrote in an email to CoinDesk.
A break above $59,000 could place bitcoin closer to the all-time high, so long as the downside remains limited around $53,000, according to Cawley.
2. Bitcoin Eyes $60K as Active Entities Surge, Price Chart Shows Impending Bull Cross
An increase in network adoption along with a price increase is believed to confirm an uptrend.
Bitcoin’s rally looks to have legs as the ascent is backed by a pickup in blockchain activity and a long-term technical indicator which is about to turn bullish.
While bitcoin has gained 30% this month, the user activity on the network, as measured by the seven-day average of the number of active entities, has increased 19% to 284,179, according to data provided by Glassnode.
An increase in network adoption along with a price increase is said to confirm the uptrend.
According to Glassnode, “more active market participants has historically correlated with growing interest in the asset during early-stage bull markets.”
Glassnode defines active entities as a “cluster of addresses controlled by the same network entity.” The metric includes both businesses like exchanges and custodians and individuals.
The current tally of active entities is the highest in five months and at par with the number observed at the beginning of the bull run in late 2020.
Institutional participation has increased along with network adoption, as evidenced by the uptick in the median size of on-chain transactions from 0.6 BTC to 1.3 BTC since September.
“An increased typical transaction size is not synonymous with price appreciation, but indicative of larger and even institutional sized capital flows present on-chain,” Glassnode said, adding that the dollar value of transaction size has also increased.
The technical outlook appears to be in sync with the bullish on-chain data, with the 100- and 200-day moving average (MA) on track to print a bullish crossover in the next few days — the first in 16 months.
A bull cross occurs when a particular moving average crosses above another average tracking a relatively higher number of backward-looking data.
The impending bull cross of the 100- and 200-day MAs is widely taken to represent a long-term bull market and may soon invite stronger chart-driven buying pressure.
A 10-month bull run from $8,300 to $64,801 followed the previous bullish signal confirmed in June 2020. The cryptocurrency nearly doubled to $13,880 after the bull cross of 100- and 200-day MAs in early May 2019.
Moving average crossovers, whether bullish or bearish, are not always reliable. These are lagging indicators and sometimes trap traders on the wrong side of the market. For instance, bitcoin bottomed out near $30,000 following the confirmation of the bear cross of 100- and 200-day MAs can mid-July.
3. Crypto Lender Celsius Network Raises $400M in a Bid to Reassure Regulators
The investment was led by equity firm WestCap and Canada’s second largest pension fund Caisse de dépôt et placement du Québec (CDPQ).
Cryptocurrency lender Celsius Network has raised $400 million in equity funding in a move to reassure regulators of the credibility of the business.
The investment was led by equity firm WestCap and Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ), the Financial Times (FT) reported Tuesday.
Celsius Network has been subject to multiple moves by state regulators in the U.S in response to its lending products.
Last month, Celsius Network received a cease-and-desist order from Kentucky’s securities regulator over interest earned on certain crypto accounts. The regulator says the accounts violate securities laws and fail to disclose to customers what happens to their deposits and whether they are protected.
CEO Alex Mashinsky told the FT: “It’s not the $400m. It’s the credibility that comes with the people who wrote those cheques.”
4. A16z Crypto Names 2 Security Veterans to Ensure Robust Measures, Provide Guidance
Nassim Eddequiouaq and Riyaz Faizullabhoy are joining the venture giant’s crypto-focused arm from Facebook, where they co-created the Novi wallet’s crypto custody infrastructure.
A16z Crypto has added two technology security experts to its operations team, Anthony Albanese, the COO of the cryptocurrency-focused unit of the venture giant, wrote in a blog post on the company’s website Monday.
Nassim Eddequiouaq will serve as a16z Crypto’s chief information security officer (CISO), while Riyaz Faizullabhoy will be its chief technology officer (CTO). They will help ensure that projects in a16z Crypto’s portfolio meet rigorous security measures, and provide technical guidance.
They are the latest additions for a16z Crypto, which has made a number of high-profile hirings over the past year as it expands its reach.
In a16z Crypto’s June announcement of a $2.2 billion raise for its much-anticipated Crypto Fund III, it also said it had added five heavy-hitters to its team.
They included: Bill Hinman, the former director of the Securities and Exchange Commission’s Division of Corporation Finance, as an advisory partner; Tomicah Tillemann, a former senior adviser to then-Senator Joe Biden and two secretaries of state, as global head of policy; and former Coinbase VP of Communications Rachael Horwitz as the operating partner overseeing marketing and communications.
Albanese joined a16z in October after serving as chief regulatory officer at the New York Stock Exchange.
Eddequiouaq and Faizullabhoy join a16z Crypto from Facebook, where they created the crypto custody infrastructure for the Novi wallet (formerly called Calibra). They also worked together at the cryptocurrency custody firm Anchorage, where they received their introduction to cryptocurrency.
In his blog post, Albanese said the firm had been seeking “a world-class security leader to consult with the projects in our portfolio and help our own operations scale in a crypto-native way, and were doubly fortunate to find a pair of them instead.” He called Eddequiouaq and Faizullabhoy “phenomenal engineering and security leaders with a proven track record in blockchain and infrastructure.”
5. Ripple Teams With Nelnet on $44M Solar Investment
The joint investment will fund solar energy projects throughout the U.S. as crypto firms try to reduce the industry’s carbon footprint.
Crypto-powered digital payment service Ripple has made a $44 million joint Environmental, Social, and Governance (ESG) investment with Nelnet (NYSE: NNI) Renewable Energy into one of Nelnet’s solar energy funds, the firms announced Monday.
Ripple will be the majority investor in the tie-up, which will fund solar energy projects throughout the United States.
The solar projects financed by the joint venture are estimated to offset over 1.5 million tons of carbon dioxide over 35 years, or about the same amount of carbon dioxide emissions from consuming 154 million gallons of gasoline, according to the companies.
“Guaranteeing a clean energy future is a major priority across every industry, not only to drive future economic growth but also to ensure a more sustainable world. As the adoption of cryptocurrencies and blockchain continues to grow, it’s evident that the technology will underpin our future financial systems,” said Ken Weber, Head of Social Impact at Ripple, in a press release. “We’re excited to work with Nelnet as we pursue our commitment to reduce the carbon footprint of financial services globally and to deliver on the promise of a carbon negative cryptocurrency industry.”
The carbon footprint of the crypto industry is a longstanding concern, and this isn’t the first eco-focused partnership for Ripple. Ripple is part of the Crypto Climate Accord, whose goal is to make the crypto industry run on 100% renewable energy by 2030.
Last year, the nonprofit Energy Web launched a decentralized approach to decarbonizing the grid and tapped Ripple as its first partner.
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October 12, 2021