MaiCoin Digital Asset Weekly, Nov 1

Commentary

Digital Assets ended the week +4%, down from an intra-week WoW high of +20%. Gains this week were very broad based with 88% of the top 200 Coins and Tokens ending the week up. Trading this week was the most active week of trading on record. President Xi Jin Ping’s announcement drove volume last Saturday to a historic single day total of US$137B across the space. For the week, trading finished at an average of US$100B, +60% vs the previous week.

China was the focus of headlines this week after President Xi Jin Ping’s blockchain comments drove a 15% single day rally in Digital Assets last Friday. Chinese related Coins and Tokens were amongst the week’s strongest with NEO +52% and Tron +25%. Bitmain (Chinese miner) backed BCH +30% gained with China concepts despite reports of very messy management infighting. Miner fund raising was another big story this week with reports that Chinese miners Bitmain and Caanan were both planing IPOs in the US.

Outside of China, top stories included: 1) Bakkt reporting increased engagement with institutional clients, 2) Canada OKing a listed BTC fund for retail investors, 3) Genesis announcing US$870M in 3Q crypto loans, 4) Russia exploring a massive BTC mining facility and 5) Coinbase and Deribit suffering end of week flash crashes.

Last Friday’s +15% BTC jump (intraday high vs low was obviously larger) was the 8th largest single day price move over the last 2,200 days (table below). Looking back at 20 of the largest single day price gains over the past 2,200 days, they tend to be followed by a period of consolidation and then another move higher. 68% of these big, double digit, single day price moves were followed by additional gains over the following 50 day period. The median gain is ~32% (implies $11,400 for this rally). BTC is currently consolidating just north of the 200 day moving average ~ $9,000. There’s fairly significant resistance at the $10,000 level were a lot of volume has traded over the previous 3.5 months. If we can break above that, then there’s a decent chance we can follow the pattern set over previous large, single day rallies and test Fibonacci 78.6% resistance at ~ $11,800 (chart 6).

Thoughts

China comments drive positive October Close

BTC ended the month largely inline with historic seasonality. October 2019 closed ~+11%, bouncing after 3 months of consecutive declines. As highlighted previously, gains in BTC tend to be backend loaded with October, November and December typically 3 of the most consistent and largest gains of the year.

The bulk of annual highs over the previous 5 years are also really tightly clustered (into a 21 day period) and skewed heavily toward the end of the year. 4 of the previous 5 years the annual high has either come in early Jan or late December.

News

Charts

Chart 1. WoW %
- NEO +52% one of the most liquid China Concept Coins leads gains

Chart 2. WoW % — Major Thematics
- BTC, Exchange Tokens and Big Caps were the best this week

Chart 3. Price performance
- Chinese projects the bulk of the top gainers this week
- BCH. China based Bitmain is the largest holder of BCH
- BNB. Binance is the largest exchange out of China
- TRX. Founder Justin Sun and most of the team is from China

Chart 4. This time last year…
- BTC and BNB prices still the highest ever for this point in the year

Chart 5. Average Daily Volume — By Month
- Volume up across the board in most Digital Assets
- Most trading at 3 to 5 month highs

Chart 6. Support and Resistance
- Think from both a volume and Fibonacci perspective ~$10,000 is a fairly significant resistance level. If we can break above that, then ~$11,800 is probably the next level.

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