CoinLoan Weekly: Thanksgiving rally, LTC's surge, predictions of antifragility
The first day of the week pulled BTC below $15,700, but a swift recovery pushed it back to $16,250 on Tuesday, November 22. Continuing its ascent, the coin kept climbing until it hit a 7-day high of $16,753.63 on Thursday, November 24. As volatility subsided, BTC traded tightly around $16,500 for the next three days. Monday, November 28, sent it back below $16,250.
The initial slip came amid fears about Genesis Global Capital becoming collateral damage in the FTX unraveling. Subsequently, BTC appeared to stabilize on the Fed's likely retreat from its policy of hawkish interest rate hikes. Currently, CME FedWatch shows roughly a 70% probability of a milder 50-basis-point increase. Reflecting improving sentiment, The Crypto Fear and Greed Index finally broke out of the extreme fear range into fear on Saturday, November 26.
As of this writing, BTC is changing hands at $16,232.84, with a 24-hour loss of -1.9% and a 7-day loss of -0.4%.
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ETH gained slightly more vigor as it finished further in the green. After tumbling from $1,175, the price bottomed out at $1,082.89 on Tuesday, November 22, and reversed with gusto. ETH jumped above $1,175 on Wednesday, November 23, and $1,200 the next day. Growth resumed over the weekend, with a 7-day high of $1,222.44 on Saturday, November 26, and ceased on Monday, November 28.
On Wednesday, November 23, ETH edged up ahead of the Fed's minutes, following BTC and equities. Yet the Thanksgiving Day gains were modest as it barely rose over $1,200. On Monday, November 28, a transfer of 73,224 ETH to Binance increased the selling pressure. Typically, whale transfers to CEXs indicate an intention to sell the crypto or use it in derivatives trading.
As of now, ETH is worth $1,172.17, with a 24-hour loss of -3.5% and a 7-day gain of +2.4%.
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XRP showed less choppiness and stronger resilience as it climbed after Monday's drop from $0.39. It touched $0.351515, bounced to $0.375 on Tuesday, November 22, and headed further upward. Friday, November 25, took it to a 7-day high of $0.418217, followed by weekend trading above $0.40. In the early hours of Monday, November 28, XRP revisited the $0.38 level.
XRP's growth was stoked by speculation of a settlement in the SEC vs. Ripple case. Some members of the XRP community echoed the optimism of David Gokhshtein, who reiterated his confidence in the defendant's victory. Meanwhile, Rahul Advani, Ripple's APAC policy lead, commented on the FTX fall, emphasizing the need for "real utility" and "greater regulatory clarity" based on a tailored risk-based approach.
As of now, XRP is trading at $0.385170, with a 24-hour drop of -4.9% and a 7-day rise of +5.7%.
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Litecoin soars to 6-month high
Last week, Litecoin stood out against a sea of red, rallying as most cryptocurrencies tumbled in the wake of FTX's meltdown. On Wednesday, November 23, LTC rocketed to $81.61, the highest peak since May. This buoyancy may stem from an upcoming change in Litecoin's supply dynamics.
In eight months, the underlying blockchain is due to undergo its third mining reward halving, slashing the amount by 50% to 6.25 LTC per block. Like Bitcoin, it relies on the proof-of-work (PoW) consensus algorithm and has a fixed supply of 84 million tokens.
Both previous LTC halvings — on August 26, 2015, and August 5, 2019 — followed a similar bearish-to-bullish pattern switch in the preceding months. The run-ups included bottoming out, breaking out of a lengthy downtrend, and leading BTC higher. Usually, forward-looking traders tend to price in such events ahead of time.
As momentum builds up, crypto analysts are discussing potential price targets. For example, DonAlt suggests a surge above the current all-time high of nearly $400 in May 2021, with a first higher target level between $160 and $200. He also predicts that LTC could outpace other altcoins during market bounces and lower drops in correction phases.
Meanwhile, veteran trader Peter Brandt has confirmed the formation of a double-bottom pattern – a classic reflection of a significant change from a preceding downtrend. It has allowed LTC to outrun ETH this month, gaining 65% against it.
According to a November 23 tweet by Santiment, an on-chain analytics firm, the latest price jump also accompanied a substantial increase in large wallets. The number of addresses holding between 1,000 LTC and 100,000 LTC coins reached a 7-month high. Over 14 days, these wallets grabbed over $43 million worth of LTC.
Recently, Litecoin has processed its 135,000,000th transaction in "over 11 years of continuous, immutable, uncensorable, flawless uptime." The subsequent halvings are expected every four years until 2124.
Analysts expect the market turmoil to make crypto stronger
The FTX fiasco has cast a black cloud over the industry, potentially threatening the future of mainstream adoption. Yet amid the doom and gloom in the crypto market, some investors look on the bright side.
While whales have lightened their BTC holdings over the past month, two other cohorts — shrimps (holding less than one BTC) and crabs (holding up to 10 BTC) — have focused on aggressive accumulation. According to Glassnode data, these groups have shown all-time high balance increases over the past month. Meanwhile, some high-profile analysts expect an upside to the crisis.
The crisis is "cleansing a lot of bad players."
Tom Lee, a Fundstrat managing partner, maintains a bullish stance on BTC's long-term future. Not only does this hedge fund veteran expect the industry to recover, but he also hints at its antifragility. In a recent CNBC interview, Lee suggested this bear phase could make the crypto market stronger. Thus, despite a "terrible" year for investors, we may soon see cryptocurrencies taken to a new level.
"Nobody has made money in crypto in 2022, but it's not that different than 2018. If we look back at that crypto winter when Bitcoin went from $17,000 to something like [$3,200] or so, that was the time that some of the best projects were created. So I think that it's an important moment for the industry. I think it is cleansing a lot of bad players […]”
Someone adding BTC to their portfolio in 2017 would have gained 40% today without rebalancing. "So, does Bitcoin still make sense for someone to have some sort of ballast? Yes". Lee also drew parallels with the 2008 financial crisis, when stronger TradFi firms emerged after the weaker ones had imploded.
"In no world is Bitcoin going away."
Billionaire Mike Novogratz, CEO of investment firm Galaxy Digital, is confident that BTC and ETH are here to stay. Speaking on CNBC's Squawk Box, he suggested the market should recover, albeit slowly.
So far, the fallout is still spreading, and "there's a lot of daisy chain effect" due to the sheer scale of FTX and the preceding downfall of Three Arrows Capital. "It's going to take a few weeks for people to [...] even get their balance back," Novogratz said, acknowledging the crisis of confidence. Instead of "V recovery," he expects "a grind out of rebuilding trust" that will force centralized companies "to do things differently."
"Separate the signal from the noise."
Mark Cuban, a billionaire investor and entrepreneur, is also sticking with crypto. In last week's interview for TMZ Sports, he urged the public to "separate the signal from the noise," noting that the mistakes made by big industry players did not affect "the underlying value of the applications."