Welcome to the 61st issue of the Broker’s Beat. This week, we discuss Bitcoin’s rush towards an ATH during the recent test of the $58K resistance level, while we anticipate the Taproot upgrade, which should bring a lot of good news.
BY THE NUMBERS
“Latest data shows the leading global Bitcoin hashrate now resides in the US as a result of China’s crackdowns on mining.”
“Bitcoin mining pool AntPool announced that it would be ceasing IP access to mainland China on October 15.”
Source: Bitcoin Magazine
“Bitcoin mining company MintGreen to deliver innovative low-carbon mining waste solution to heat City of North Vancouver, BC.”
“The Russian Ministry of Energy is looking to introduce special electricity tariffs for cryptocurrency miners following a migration of the industry into the country from nearby China.”
“In line with the recent anti-crypto policies of the Chinese government, Bitmain has excluded the country from receiving shipments of its mining machines. The company has had a long presence in China and offers “alternative solutions” to long-term clients.”
Bitcoin has picked up the pace on the charts and we’re starting to retest previous high resistance levels. BTC spot price has increased from $54.6K to test $58K between Oct. 10 to Oct. 14, 2021. The crypto market has started to recover to its past high levels above $55K in mid-April. Let’s take a look at the charts to study Bitcoin netflow movement across wallets as it varies with the price action.
The chart above shows the netflow of BTC across wallet exchanges and we can see an increase in Bitcoin wallets from -0.6K to 6.6K BTC between Oct. 10 and Oct. 12, 2021. This indicates that there was an excess of BTC inflow than outflow and fewer traders were willing to hoard their BTC bags. Traders preferred to sell their BTC in exchange for alt coins purchasing.
On the exchanges inflow chart, BTC inflow value doubled in its value from 15.2K to 30.3K as BTC spot price increased between Oct. 10 and Oct. 14. An increase in the amount of BTC transferred into all exchanges’ wallets from external wallets signifies that there was a high demand for alt coins and lesser demand for BTC. More traders were willing to sell their BTC and purchase alt coins.
The Bitcoin mining network saw a recent drop in its hashrate value from 138m TH/s to 141m TH/s between Oct. 10 2021 and Oct. 13, 2021. Mining operations have picked up in other countries outside China, where it used to be very predominant. Now, countries like the US and even Russia have begun to see more miners troop in and set up mining rigs for operation.
Energy consumption rates have exceeded 160% increase in the Irkutsk region of Russia due to the amount of miners that have relocated from China after the crypto ban. The Russian Ministry of Energy is looking into generating electricity tariffs for crypto miners. Globally, Russia accounts for 11% of cryptocurrency miners, behind Kazakhstan and the US.
Reports revealed that the US contributes more than a third of the global hash power for BTC mining. A combination of factors are the reason for this. The China crackdown event and the concurrent rapid development of crypto mining establishments in the US are the major reasons for this.
With Bitcoin testing major resistance levels at $58K today, it is very possible that we see a retest of previous all-time highs at $64K if BTC is able to break $60K. We only saw Bitcoin test $64K once in mid-April; hence, shooting past this level is great for the crypto space and would signify huge things to come. Let’s take a look at some vital fundamental analysis that can potentially boost the market in the bullish direction.
The Bitcoin taproot upgrade is slated for November 2021 and this can only mean great things for the market. This is the first major upgrade to the BTC network since four years ago and it will introduce smart contract functions to the BTC network. When we look at other smart contract-enabled cryptocurrencies like Ethereum and ADA, we can almost tell how important the taproot upgrade will be to BTC. It will be very interesting to see how this goes and we believe that this may be the catalyst that’s needed to boost BTC price above $100K.
Reports suggest that the Bitcoin maxis may have to wait further for the approval of a Bitcoin ETF. We have seen similar delays in the past, including the last bull market in 2017 where it was widely spoken of and still got delayed. According to recent analysts, it is possible that the SEC postpones this approval further until 2022. However, as more institutions and big companies continue to adopt cryptocurrency, we believe that we’re getting closer to ETF futures approval.
In anticipation of $820M BTC options expiry tomorrow, experts have set a price target of $58K. Like we mentioned earlier, if this does play out we can expect a break upwards of $60K and beyond which is very good for the crypto market.
Ethereum is now starting to gain the attention of institutions like ArkInvest as it rises to test $3.8K today. ETH has the potential to reach $10K by the end of the year if BTC price rises to $100K as proposed by experts. The Ethereum London hardfork that was introduced in the summer means that Ethereum is now deflationary. This will continue to increase the demand of ETH and reduce its supply, even as more institutions continue to acquire massive amounts of ETH. Ethereum will be switching over to proof-of-stake from proof-of-work through ETH 2.0 upgrade which will allow holders to earn passive income by staking ETH. Mark Cuban is bullish on Ethereum, stating that the cryptocurrency has the ‘most upside’ for investment returns on crypto. We’re confident that Bitcoin will be testing $60K in the coming days or weeks and a lot of media will cover this bullish news.
That’s all for this week! If you have any questions about what we talked about here or would like to explore trading with us, let’s get the conversation started.
The Secure Digital Markets Team