It has been an eventful week for all types of investors. Momentum was injected into the markets by Joe Biden’s apparent election victory and the news of the Pfizer and BioNTech vaccine trial showing 90% efficacy. The S&P, Dow Jones and the FTSE 100 all made significant gains on the news before the upward trend flattened. Bitcoin didn’t miss anything either, as it also hit another major $ 16,000 milestone and floated around the price over the weekend.
Simon Peters, analyst, eToro: Bitcoin Braced For A Bullish Breakout?
Bitcoin’s surge and rise continued when it hit another major threshold. The cryptoasset has moved up to $ 16,000 as prices observed an ‘upward continuation pattern’. As part of that, we would expect prices to break out and then move in the direction of the prevailing trend. Chances are we will see a bullish breakout and, if we do, expect bitcoin to move towards the next $ 17,500 price threshold. Getting there would bring us back to a resistance level last seen in January 2018, when prices didn’t get higher after a major drop from the all-time high of $ 20,000. It will be interesting to see what happens, but I remain optimistic about bitcoin’s long-term outlook.
Now that the American elections are (almost) over, attention is returning to tax incentive. With the rollout of any COVID-19 vaccine likely to take place well into 2021, all indications are that a package will still be needed to support the US economy. With bitcoin increasingly solidifying its status as an effective inflation hedge and huge amounts of liquidity to be pumped into the US high street, that could be another catalyst to finally push the world’s most popular cryptoasset past $ 17,500.
Altcoin activity with opportunities
Ethereum’s price has also risen favorably, from $ 369 a month ago to $ 453 today, and altcoins such as Tezos and Cardano may offer attractive buying opportunities for many investors. Tezos had suffered earlier this year after hitting record highs, but now that declining prices were seemingly under control, many could see this as a good point to reconsider their position.
The launch of ETH 2.0 continues to loom big. With 16,384 nodes required 7 days before the scheduled launch and each requiring 32ETH, it seems increasingly likely that the launch date of the 1st December will be postponed. Just over 11% have bet on that ETH 2.0 target, indicating a delay is imminent, but encouragingly, the number of addresses with 32 ETH + has hit an all-time high. Maybe investors are waiting to see what happens.
If ETH 2.0 defies the odds and launches on time, we can see an influx of investors to take advantage of rewards betting. Validators are rewarded for adding blocks to the blockchain. If investors do their part in the ecosystem, those rewards will be distributed, and that may be the incentive needed to see more action. Once things get going, we can see further inflows into Ethereum as a result.
Rishi’s CBDC is being rolled out?
Rishi Sunak has suggested in a tweet that the BoE and the Treasury are considering CBDCs, but “as a supplement to cash” no alternative. Undoubtedly, British society will increasingly evolve towards completely cashless, and this initiative can and should play a role. The CBDC has options to roll out via a centralized ledger or a decentralized system. Regardless, it’s good to hear that the UK government is considering CBDCs. If they weren’t, the UK would run the risk of falling behind by other world powers like China or private companies launching stable coins.
Looking ahead this week, we’ll be watching closely for signs of fiscal stimulus as the US Senate settles. We will also continue to monitor how the launch of ETH 2.0 progresses as time goes towards the deadline.
PayPal is accelerating the rollout of cryptos
PayPal, which engaged customers interested in crypto to be able to buy, sell, and hold various coins, has now dropped this waiting list. Instead, all US customers can use the maintenance without the need to register interest. I continue to believe this is a hugely positive step for cryptocurrency adoption, opening up a potentially huge user base for cryptoassets. The community agrees, especially given the price movements we saw last month after the initial announcement.
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