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Market Review 10/21: Bitcoin hits a new all-time high!

The price of Bitcoin has reached a new all-time high. At the same time, Bitcoin’s market dominance continues to grow. Altcoins are heavily on red compared to Bitcoin. The DeFi sector has broken a new TVL record, again!

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Bitcoin reached a new all-time high first time in 6 months

We have witnessed one of the strongest weeks in Bitcoin’s history. At the time of writing this article, Bitcoin’s price is about $65,000. It’s almost $10,000 higher than a week ago. Yesterday, Bitcoin even reached a new all-time high. The new record price is slightly above (or below) $67,000, depending on the cryptocurrency exchange.

The graph below shows the price development of Bitcoin over the past six months. The 50-day (blue) and 200-day (purple) moving averages are also included.

btc20211021

Bitcoin has shown great strength throughout October. The price jumped above the 50-day and 200-day moving averages in the first days of October and hasn’t looked back since.

This positive price development does not come as a surprise. We have written about this since the low points of June and July. Bitcoin is doing exactly what it was supposed to do to the delight of investors.

The price of Bitcoin has grown by over $20,000 in October. This monthly candle is now larger than the peak of 2017.

The new ATH was widely celebrated on social media. What is interesting, though, is that Bitcoin got little attention in the mainstream media. This is a good sign in the sense that the big media rush is yet to come.

Many analysts expect the crypto boom to explode when Bitcoin breaks the $100,000 mark. This may very well be true. Bitcoin is currently far from its peak levels when we look at the global Google trends.

trends

The price of Bitcoin is now in the price discovery phase. It refers to a price level where no historical data is available. When a new ATH is broken, anything can happen. Traders have no support or resistance levels to guide them.

We believe the price of Bitcoin will continue towards $100,000 (and further) in November and December. However, you should remember that nothing goes to the moon in a straight line. We saw a 20-30% crash take place once a month during the previous price rally as well.

Bitcoin’s dominance is on the rise

Over the past few weeks, Bitcoin’s dominance has been on the rise. This trend seems to continue at least for the time being. The graphic below shows Bitcoin’s market share over the past six months.

btcdom20211021

As you can see, Bitcoin has taken over the market during October. Bitcoin’s market dominance has grown hand-in-hand with the price. This has been noticed by all altcoin investors.

Bitcoin’s new ATH gave also a small boost to the altcoin market. Ethereum, in particular, got a nice bump over the $4,000 mark.

There is a good chance that the price of Bitcoin will remain between $60,000 and $65,000 for a while. This would be a logical area for the market to have a little breather and try to decide what to do next. In this scenario, altcoins could easily strengthen by taking a greater share of the market.

The altcoin market is in negative territory

Bitcoin’s growing market share has had a negative impact on the biggest altcoins. Almost all major altcoins are clearly down this week compared to Bitcoin. Of course, there are a few exceptions.

In the image below, you can see the price development of the largest altcoins relative to Bitcoin.

altit20211021

Only Ethereum, Litecoin, and Solana are showing green compared to Bitcoin. These coins got the biggest boost from Bitcoin’s ATH price.

Bitcoin’s “little brother” Litecoin was one of the strongest altcoins a year ago as well. The price of Litecoin has often gone up at the same tempo as Bitcoin. Similar behavior could be expected this autumn as well.

Just 12 cryptocurrencies have performed positively against Bitcoin in the top 100 list. There is no clear trend here as this group is a mixed set of projects.

The DeFi sector continues to grow

The DeFi sector has performed excellently in recent weeks despite the fact it’s Bitcoin, not altcoins, leading the market. The TVL number broke the $200 billion threshold a week ago. Now it has grown further by almost six percentage points. The current TVL is $219.41 billion.

defi20211021

One might think there is a big DeFi boom going on, but that’s not the case. DeFi tokens are also performing poorly compared to other altcoins. It seems like the growth comes just from institutions and other big players who inject more and more liquidity into DeFi protocols.

Check defillama.com for up-to-date stats.

defiprot20211021

Aave and Curve have been changing places in recent weeks. This time, the number one protocol is Aave. Its TVL has grown 23% during the week.

WBTC, Wrapped Bitcoin, has taken third place. These are Bitcoins issued on the Ethereum network. The value of all wrapped bitcoins has increased significantly thanks to Bitcoin’s positive price development.

Last week’s rocket Anyswap has dropped a couple of places down and out of the top 10.

At the blockchain level, the situation looks like this:

defichains20211021

Last week, we saw Fantom have a rise of 262%. Now Fantom is on red while other chains are showing strength.

Polygon’s MATIC token was one of the best performers last week when compared to Bitcoin. The positive price development is also reflected in Polygon’s TVL figure. In the big picture, Polygon is still lagging behind the popular trio Solana, Terra, and Avalanche.

Clifford Photography on Unsplash

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