Daily BTC Analysis: The Weekender

Welcome to the Weekender: Your weekly round-up of the top news stories driving prices across the cryptosphere. Most week’s usually have a strong theme, this week, the news has been wide ranging, but as always, the uptake in adoption is clear to see. Top spot this week was the news that cryptocurrency investment products have seen their total assets under management (AUM) increase by 45.5% to almost $75 billion in October, surpassing the previous all-time high of $58.7 billion in March of this year.

According to CryptoCompare’s latest Digital Asset Management Review, rising cryptocurrency prices  coupled with the approval of the first Bitcoin ETFs have seen inflows surge, with assets on bitcoin-based investment products growing 52.2% to $55.2 billion, another all-time high.

Similarly, Ethereum-based products saw their assets under management reach an all-time high of $15.9 billion in October after rising 30%.

It might not be seen in the technical analysis charts, but the market has a dark cloud approaching. Mt. Gox is set to pay out over $9 billion to its creditors after they approved its plan to distribute the BTC it recovered from the hack 7 years ago.

Launched in 2010 by blockchain developer Jed McCaleb and later acquired by Mark Karpeles, Mt. Gox was at one time the biggest BTC exchange in the world. However, in early 2014, it was hacked, and about 850,000 BTC, worth $500 million at the time, was stolen. It remains one of the biggest hacks in the entire history of cryptocurrencies. Since the hack in 2014, investors who lost their fortunes have been engaging in endless legal battles as they attempt to recover their funds.

According to documents on its website, Mt. Gox is in possession of 141,686 BTC, worth $8.9 billion, what is not yet clear is quite how much of this long-lost Bitcoin will be sold by investors once the funds are returned.

China’s exit from Bitcoin mining is now all but unnoticeable as network fundamentals take care of their own recovery. Bitcoin  has all but deleted any trace of the mining ban, which saw its hash rate dive 50% this year.

According to the latest estimates, the network hash rate is now back at levels from May, just before China outlawed its Bitcoin mining industry.

While impossible to measure in definitive terms, the hash rate has seemingly accounted for the entire China debacle, doubling from its bottom several months ago.

Likewise, the mining difficulty is set to increase by 5.7% next week, bringing it to within 4 trillion of its 25 trillion record high. Not only that, but Bitcoin will seal an eighth-straight difficulty increase — the first time such an event has occurred since 2018.

And finally, after outlining two new partners in its attempts to enhance cryptocurrency mass adoption, Bakkt’s stock price surged through the roof yesterday. This comes just a few weeks after ICE’s Bitcoin service arm became a publicly traded firm. MasterCard plans to integrate digital assets into many of its products and tapped Bakkt to do so. The company announced that it would allow merchants and banks on its network to integrate cryptocurrencies.

ICE’s firm Bakkt has also partnered with Fiserv – a global provider of payments and financial services tech solutions. The idea was similar to the aforementioned Mastercard partnership – to bring cryptocurrencies to a larger contingent of customers. Fiserv promised that Bakkt would eventually be integrated into its Carat omnichannel ecosystem, which should enable more options for B2B and B2C cryptocurrency payouts, loyalty programs, and transactions.

Have a great Sunday!

Technical Analysis

Bitcoin is largely unchanged on the week, with prices contained between $63,000 and $58,000. It's been a stalemate, with the bulls and the bears failing to demonstrate the conviction to create the needed momentum to change our consolidation theme. 

We will need to see a close above the previous ATH of $64,893 to allow the bulls the chance to push BTC in to a $70,000 handle. The bears will be hoping they can force a daily close below $58,840, but they have found dip buyers quick to rally the market every time they try to test support. 

Key indicators are still bullish, but without an extension of this rally, the patience of short term leveraged longs could be tested, which would assist the bears and allow for downside momentum to be created. 

The upside only has two levels to note, $64,893 and $66,999. Once BTC breaks through these resistance levels, then $70,000 and beyond becomes all but guaranteed. It's likely we see another week of sideways trading, the looming liquidation of Mt Gox will be in the minds of the whales, and should the games begin, there is a real chance we see the low $50,000s trade again during November.