Market Research Report 30 NOVEMBER 2020
The shortened holiday week over Thanksgiving did not do much for the markets, especially when considering so-called safe haven assets like gold, and even cryptocurrency which was rampaging upwards the week before. However, there was some good news when it came to Forex.
Looking at the stocks, they also seemed to be in holiday mode as not too much happened there other than some general consolidating in a holding pattern. Yet, the Dow is feeling a bit of selling pressure, but that is not too much to be worried about.
The US Dollar is facing a time of weakness as it stands, but this is good news for other foreign currencies as the EURUSD has broken some key milestones on its climb. But interestingly, Gold also fell back at a time where the dollar was showing weakness — something that does not often happen. It is not only Gold, the primary safe haven asset, that fell over the holiday week, there has also been a rather big drop for cryptocurrencies that were flying. Bitcoin was heading towards its previous all time high only to be stopped in its tracks last week.
Unsurprisingly, with Bitcoin grabbing the headlines in the previous weeks, greed, and rumours, were at the heart of this most recent collapse. It was also not only Bitcoin that felt the pinch as the major coin helped many altcoins take off, but these coins also felt a rather large collapse as well based on other factors.
This was short lived though as the beginning of the new week saw Bitcoin rally and even tip a new all time high on some exchanges as the coin settled around the $19,800 mark.
More pleasing for the cryptocurrency space, Ethereum, the second-largest cryptocurrency by market cap, has seen a major milestone in its development reached which will no doubt pump a lot of potential and promise into its market.
With theCryptocurrency market bouncing back after falling, will it continue to rally. And, will the rest of the traditional markets go back to normal after taking a break? Short Week Stumps Stocks
In a holiday shortened week, stocks did nothing much but continue consolidating in a holding pattern waiting for something to drop, be it positive or negative news related to the stimulus package.
However, the Dow is finding selling pressure with every move above 30,000 and this level may curb the upward trajectory of the Dow because a small double top pattern is seen. However, any downward move should be quite well supported at around 28,500.
Rumour and Greed Sink Crypto Prices After a Week of Excitement and Speculation
The week in cryptocurrency market could be divided into two distinct parts, with the early part of the week filled with much euphoria as the price of XRP skyrocketed to $0.79 on Tuesday, shocking even the most bullish XRP advocate at the magnitude and pace of the advance, as XRP rallied more than 150% over 5 days.
EOS also had a good run, moving from $2.80 to a high of $3.80 within the week. Overall, the sentiment in the crypto market was at a high, with most altcoins clocking between 20% to 150% growth.
The moves in the altcoin market seemed a bit too fast too soon for it to be sustainable. BTC in the meantime, tried twice to break its ATH of $19,600 but could not. This mark has now finally been breached, even if it was short-lived. It seems Bitcoin is well placed to push further and higher now.
This is despite when, on Wednesday night, a rumour about the US Treasury Department’s plan to control self-custody of cryptocurrencies made its round.
The rumour was started by Brain Armstrong, the CEO of another crypto exchange. In a series of Tweets, Brian exposed that the US Treasury was going to enact a law to stop the self-custody of cryptocurrencies, and that he and a group of prominent crypto advocates were trying to prevent it.
The tweets caused instant panic in an already overleveraged market and cryptocurrencies instantly dived at a much faster pace than when they were rising. BTC fell $3,300 to a low of $16,100. The rest of the crypto market saw blood bath as overleveraged traders either quickly unwound or got their margin positions liquidated.
The perpetual futures market saw $1.9 billion worth liquidations of long positions in the 24 hours after the tweet, with half of the positions in BTC. Open Interest in the Options market also fell from $5 billion to $3 billion.
