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30
Nov
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Market Review 11/30: Bitcoin recovers from a crash

Bitcoin is recovering from last week’s crash. Investors are uncertain and concerned. Many people think that the price of Bitcoin should be significantly higher at this stage of the cycle. Bitcoin’s dominance is also dropping. Most altcoins are down compared to Bitcoin. The DeFi sector remains stagnated.

Bitcoin price is looking for a new trend

At the time of writing, the price of Bitcoin is about $57,500. This is almost exactly the same as last week. The price levels of $70,000 we saw in early November seem very distant now.

The graph below shows the price development of Bitcoin over the past few months. One candle reflects one day. The blue line is a 50-day moving average and the purple line is a 200-day moving average. In addition, the orange lines describe the direction in which Bitcoin’s price is currently developing.

btc 301121

A lot has happened during the past seven days. The price of Bitcoin was just about to reach the important level of $60,000 when news of the latest coronavirus variant hit the market. The Omicron variant has now spread widely around the world.

Stock markets were plunging following this news. A new COVID variant brings uncertainty to the market. Cryptocurrencies slipped down with the stock market.

During the weekend, more news about the Omicron surfaced. It seems the new virus is not as dangerous as originally feared. This caused both the stock and cryptocurrency markets to rise at the beginning of the new week.

The bottom of the price drop was reached at $53,500. The market has already recovered more than $4,000 higher from there, but the mood is still nervous. Bitcoin’s price is below the 50-day moving average as well as the important resistance at $60,000.

Investors are also worried about the popular Stock-To-Flow model. Its developer, Plan B, has managed to predict Bitcoin’s price development amazingly well in recent months. Now, however, the Plan B prophecy is off at $40,000. For November’s closing price, Plan B had predicted $98,000.

 

It should be noted that these predictions are not the same as the S2F model itself. However, it is clear that the clock is ticking, and we are far away from the $100,000 price prediction of the S2F model too for the end of the year.

In 2017, the highest peak was seen on the 19th of December. With a cycle duration of about four years, Bitcoin should reach a price of $100,000 by the end of the year.

There are no major signals of a bear market yet, but Bitcoin’s bad poor development is not tempting the investors either.

Bitcoin’s dominance is trending downwards

Bitcoin’s weak price performance is also beginning to show in its market share. Bitcoin’s dominance has dropped from last week’s 42.7% to 41.9%. This is not yet a particularly big change, but the graphic looks undeniably bad for Bitcoin.

btc dominance 301121

If we drop another percent lower than this, it can be considered as a clear downward trend. As recently as last week, we were moving horizontally without any clear direction. Now we can see lower lows and lower highs forming. This is bad for Bitcoin’s dominance.

General uncertainty can also be seen in the altcoin market. There is no greater upturn.

Traditionally, Bitcoin’s drastic price changes have multiplied in the altcoin market. Now, this does not seem to be the case, which reflects the overall strength of the altcoin market.

Shiba Inu and Terra Luna biggest gainers

Next, let’s look at the biggest ups and downs in the altcoin market. Below you can see the 15 largest altcoins and their price development compared to Bitcoin.

alts 301121

As the picture shows, there’s a lot of disintegration on the list. Most altcoins are in the red compared to Bitcoin. Only four altcoins are green. Shiba Inu and Terra Luna are the biggest winners.

Shiba Inu got a big lift as it was listed in the Kraken cryptocurrency exchange. As a result, the price of SHIB went quickly up by over 20%.

Terra Luna has gained new momentum from major coin burns in recent days. Over 6.6 million LUNA tokens have been removed from circulation in the last five days. This means more than 5% of the issued tokens. LUNA tokens are burned every time when new UST stablecoins are issued.

In recent weeks, Crypto.com’s CRO-token has been a hot topic on social media. CRO went up hundreds of percentages in November and almost reached a top 10 ranking. Now, however, the hot run seems to be over.

Metaverse tokens Gala and Sandbox have performed well outside the list of the 15 largest cryptocurrencies. Gala was just listed on Coinbase, which has been good for its price. Sandbox, on the other hand, has gained new momentum thanks to its Adidas collaboration.

Outside of the 15 largest cryptocurrencies, most projects are negative compared to Bitcoin. In the big picture, however, the situation looks good for the altcoin market.

No major changes in the DeFi sector

Throughout the autumn, the DeFi market has consistently set new records. This development finally came to an end in November. The TVL of the DeFi sector is currently at $269.77 billion. This is nine billion more than last week, but the graph still looks going sideways.

defitvl 301121

Although the DeFi sector TVL is well above its spring highs, the activity is far from it. This can be seen from DEX (decentralized exchanges) trading volumes. One hundred billion dollars will be reached in November, but in April the trading volume was over 160 billion.

There are no major changes at the protocol level. However, it is clear that the lending protocol Aave no longer leads the sector. Aave has lost its third spot last week and dropped fourth. Aave is the only one of the top 10 protocols that have dropped its TVL last week.

Below is the latest ranking. You can find up-to-date information at defillama.com.

defiprot 301121

We can see that Pancakeswap has dropped outside the top 10 protocols. This Binance Smart Chain DEX used to be the number one on the list about six months ago with more than $10 billion in total liquidity.

Venus Finance was also included in the top 10 earlier this spring. Now, these BSC protocols have fallen to 11th and 20th. This is a sign of Binance Smart Chain’s steadily shrinking market share.

defichains 301121

Binance Smart Chain holds third place on the blockchain list for the time being, but its market share is only 7%. Last spring, this number was 20% at its peak. It is expected that Solana, Avalanche, and Terra will overtake the BSC in the coming months.

Polygon’s ranking as eighth can be considered somewhat surprising when comparing the number of protocols with competing platforms.

Elrond has also risen to the top 10 for the first time. Its TVL is backed by Maiar DEX which was launched in November. Elrond is technically a strong smart contract platform, but compared to its competitors, it has received relatively little attention on social media.

Photo by XPS on Unsplash

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