Bitcoin and the Rest of the Cryptocurrency Market are Preparing for Further RecordsNovember 9, 2021
There is a lot of excitement in the air in regards to the next leg of the cryptocurrency market movement. At the start of the week, crypto prices shot up with both the BTC network and the ETH token reaching new all-time high levels. For the ethereum network, that was the 4,700 USD region, which BTC surpassed 66,000 USD for the first time in the history of the same cryptocurrency blockchain. Because of that, analysts, investors, and traders are all eagerly following the next developments in the crypto markets and figuring out their best moves. For some, that will be cashing out after their previous positions came to the desired point of return on investment.
Many more individuals and companies, however, will likely be gunning for a further accumulation of crypto assets, having in mind that November is traditionally a good period for the big upward movements. This year so far is promising exactly the same and for BTC at least, a prolonged period of sideways trading, which lasted nearly a month, is now over. With a strong demand at 60,000 USD, the breakout moment seems to be either here or just around the corner. That means that in any case, an exciting period is in front of the crypto markets and also one that might write down history in even bigger letters than the most recent record-breaking price levels.
The change in the previous pattern that was holding steady most of the crypto market suddenly changed between Sunday and Monday. In early European trading hours, BTC token hit 66,000 USD for the first time, quickly climbing to the 67,000 USD range. Ether, the native token of the ethereum network, also broke its record value on the same day. It climbed beyond 4,700 USD. Bitcoin and ethereum are the biggest cryptocurrencies in the world by both market capitalization and token price.
While the experts believed that there is a big chance for a breakout in the near future, the speed and intensity with which this happened still took many by surprise. The same goes for the wider market and its participants, all of whom are trying to gauge the future movement of the crypto space. For now, the skies seem blue and clear for not only nearby record values, which is near 5,000 USD for ETH and close or over 70,000 USD for BTC, but also way beyond that.
One of the key elements that are fueling the rise in crypto prices is apparently, once again, that incessant fear of inflation. Analysts were quick to notice that as well, pointing to the sinking of the bond yield. Real yields are sliding steadily because of fears of inflation and these might have provided the BTC rally with a strong bump. Data coming from the US Department of Treasury indicates that the 10-year real yield dropped by over one percent last Friday. That is its lowest position since the end of August. Because of that, the long-standing narrative that bitcoin and cryptocurrencies, in general, are a great store of value once more kicked into a higher gear.
That is why so many bundle BTC with things like gold. In times of financial uncertainty, it is possible that more and more individuals are seeking to secure their assets through hedging their bets and diversifying their holdings. At the same time, FED’s Chairman Jerome Powell is still trying to assure the public that the price pressure is only transitory and that there is no room for inflation, or hyperinflation as Jack Dorsey of Twitter predicted, takes serious root. However, even with that, the fears of inflation running out of control continue to play a big part in the decision-making process of so many, especially in the US.
Global Narrative of Fiat Worry
The issues that face the US are not singular across the world. Instead, much of the globe shares the same patterns of economies, providing so much liquidity to their struggling industries that the value of fiat money is gradually slipping. That is why inflation issues are dominating the headlines on a global level and the same is coinciding with a range of economic crises. In the US, gas prices are climbing up steadily. In the EU, the issues with a failing supply of clean energy during the summer months, coupled with high demand in energy consumption, means that the prices for all manner of power-producing fuels are also going up.
That is, in turn, creating a diplomatic row with Russia, which man accused of using the same problem for its benefit. Lastly, in the nations across Central and South America, the inflation issues reflect themselves in a much more dangerous domain: food prices. That level of crisis is much more potent when it comes to triggering things like social and even security problems on a wider scale. All the while, in the domain of business, companies are faced with problems of supply chains and a labor force that keeps on shrinking. In that circumstance, only the very brave and very determined to trust their government will not think about hedging their bets when it comes to looking for places to store value.
Similar to esports, social media trends, and many other aspects of the contemporary world, the future potential for cryptocurrencies is in some way housed in small tidbits of information that are available now. So, on-chain data presents a lot of bullish signs for BTC in the medium term. The hash rate of the network has been growing steadily since the summer and the exodus of so many cryptocurrency mining entities from China. Thanks to that, miners managed to accumulate over 3,000 BTC tokens in their wallets in the past two months. Also, the number of overall BTC wallets that do have at least some bitcoin on them is now back to 39 million, which is just shy of the all-time record of 39.28 million that was reached in May. All of these are strong positive sen times seen in markets that will most likely soon test their biggest all-time high levels.