Crypto Market Overview: What Can We Expect This Week?

crypto market overview blockchain man view

Though the crypto market opened November floating within a consolidative range, prices swiftly rallied last Wednesday, November 2nd, following positive news that primarily impacted the traditional markets, most notably from the FOMC

Though the U.S. Fed announced the expected interest rate increase of 75 basis points, Fed Chairperson Jerome Powel underlined that the “ultimate level of rates will be higher than previously expected”. 

The news initially caused a volatile reaction, however the markets soon came to a consensus that the development could be positively construed, which was reflected in the short term despite the reccurence of a wave of downturns on Saturday, November 5th. 

With digital asset prices currently taking a nosedive, there is one question on everyone’s lips: have we seen the full extent of the recovery, or will it yet continue?

In order to tackle that question, in this weekly crypto market overview, Bitcoin’s fundamentals, as well as the charts, must first be examined.

Market Capitalization

October 21st played host to a downtrend that saw the market capitalization of the cryptocurrency industry fall to $853B at its lowest point. Nevertheless, the market managed to stage a recovery from there, breaking through the descending triangle pattern formed on August 14th, which had long been a significant resistance point.

crypto market overview total market cap

Following October 21st’s decline, the cryptocurrency market’s total capitalization increased by 19.11%, reaching its highest point of around $1.022 trillion on November 5th. 

Had the market completed this rise on the 5th, and a breakout below the currently forming ascending channel took place, the cryptocurrency market cap would have fallen back to $913B at its lowest point. 

Declining further may invalidate this scenario to a more favorable one, in which a bullish state would be able to hold out above the $932B level. 

With a downturn taking place in recent days, though only a minor one as it stands, the question remains—will we see a further push in November? 

Bitcoin’s Dominance

Bitcoin’s market share was on the rise for much of October, due largely to an uptrend lasting from the start of the month, until the 21st. During this time, the dominance of the leading digital asset rose from 41%, to 42.06% on the 21st. From this point, however, the “digital gold” experienced a sharp decrease in its power, rounding out the month at around 40.11%, below its starting point.

btc dominance crypto market overview

Overall, Bitcoin’s dominance is still hovering around the significant horizontal level first attained in May of 2021. Though Bitcoin has made several attempts to increase its market share, the pressure of the market downturn has proven too strong, resulting in its failure to maintain an upward trajectory. For this reason, the market may experience further lows in November, and it remains unclear whether the horizontal support range at around 40% will hold. Should it break, it could lead to a new all-time low, below even that of 36,24%, seen in January 2018. 

Historically, however, a decrease in Bitcoin’s dominance has been interpreted as a bullish sign, as it implies that market participants are taking on more risk by investing in Altcoins. 

Bitcoin: All Exchanges Netflow

Bitcoin’s netflow was mostly negative in October, recording 20 days of negative netflow, with the largest spikes on the 18th, at -36,209 BTC, and on the 26th, at -42,529 BTC. 

bitcoin exchange netflow crypto market overview

Clear accumulative activity was seen, as October saw Bitcoin typically being withdrawn from exchanges. That, in turn, had a positive effect on its price, and, despite recent, though insignificant, positive netflows, there are still no signs of a reversal. 

Though November has brought a minor positive netflow revision, the cumulative total across the three days in question was just 18,183 BTC—lower than the third largest negative spike, witnessed on October 6th, of 20,739 BTC.  

Bitcoin: the All Exchanges Reserve

The aforementioned notion can be validated by the metic of the “all exchanges reserve”. In October, the amount of Bitcoin held on exchanges was in decline, having started at 2,271,851, and dropping to 2,133,948 at its lowest point on the 26th. 

bitc exchange reserve

At press time, though this level has undergone a slight increase, the overall metric still indicates a downtrend, which is generally considered a positive sign. 

Bitcoin/USD: Technical Analysis

The price of Bitcoin made a strong push on November 5th, reaching the $21,500 level. This validated an impulsive move that had started on October 21st. Since November 5th, however, the leading digital asset has struggled to maintain its position, and currently trades in the region of $19,500 at the time of writing.

btc usd crypto market overview

On the other hand, as a result of the surge validating the impulse wave, the market is closer to validating the start of a “Y wave” of the highest degree (green, Minor count), which promises an upside in the $26,000 range.

If this projection comes to pass, then the first impulse, which took place between October 21st and November 5th, would be considered the “A wave” of a lower degree, which would suggest that the market could expect a descending move from a “B wave” (orange, Minute degree).

Following this decline, another validation could potentially occur, as the B wave could retrace to as far as $19,650, a significant support zone, due to Fib levels and the significant horizontal intersections. 

In this scenario, an additional upward trending “C wave” could be projected to complete the pattern, which in turn could lead to the price of Bitcoin revisiting its August high of around $25,000. 

The Bitcoin Hashrate

Network stats still indicate a positive outlook overall, with Bitcoin’s hashrate at an all-time high.

bitcoin hashrate crypto market overview

At the start of October, Bitcoin’s hashrate experienced a steady climb up until the 11th, when a minor correction occurred. Nonetheless, the hashrate has since regained its momentum, reaching 272B at its highest point. 

Bitcoin: Transaction count

The number of executed transactions has picked up the pace as well, breaking out of a stagnant period to record highs unseen in some time. 

crypto market o verview

Further positive indicators can be seen in the increasing volatility expected in the asset’s price action, which could potentially cause overall network activity to increase.

Conclusion

Over the last week, the cryptocurrency market has seen the continuation of the uptrends which started forming on October 21st, with higher highs validating the impulsiveness behind the initial move. 

That being said, November 5th likely saw the move’s completion, with a downturn currently in progress. This is expected to continue in the following days, but only in terms of a corrective move before a further uptrend continuation can take place, potentially leading the market to highs unseen since mid-August, especially for cryptos such as Ethereum (ETH) and Binance Coin (BNB). 

Bitcoin’s on-chain data supports the notion of bullish price action, as clear signs of accumulation were demonstrated throughout the previous period. Bitcoin’s network stats are still looking strong, and the fact that Altcoins improved their positions in the previous week further points to bullish sentiment. 

The week ahead likely heralds a degree of bearishness, but an overall bullish price action could be expected afterward.  

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

Author

Nikola is a trader and a market analyst, working with funds, brokers, and research firms over the years. He started learning about the financial markets in 2015 and entered the crypto market in 2017. Regarding his analytical outlook, his preferred tool is Elliott Wave Principe. Being a Sociologist by vocation, he approaches price action analysis from the angle of collective consensus and crowd psychology.