Next week of positivity or is "calm" returning?

Thought of the week

Markets that experience high volatility for several weeks in a row, leading to positive price trends without “pauses”, usually experience a major correction sooner or later. After this correction, prices can remain well above the “starting values”, but every upward trend is limited in time. Hedging should therefore be considered at all times, even in negative price trends!

Digital Asset News

With Bitcoin halving imminent in just a few months, Michael Saylor, co-founder of MicroStrategy and well-known Bitcoin advocate, believes that demand for BTC could increase up to tenfold by the end of 2024.

During a speech at the Australia Crypto Convention 2023 on 10 November, Saylor was asked to give his prediction for Bitcoin and the crypto ecosystem over the next four to five years.

In his response, Saylor first gave an overview of the period between 2020 and 2024, noting that Bitcoin has now evolved from an “unregulated offshore asset” to an “institutionalised mainstream app”.

Saylor went on to suggest that BTC will become a “mature mainstream asset” by the end of 2024, highlighting key supply and demand dynamics that he believes will soon come into play:

“I think the next 12 months are going to be very important. Because demand [on a monthly basis] should double, triple or maybe even increase tenfold, somewhere between two and ten. […] and the supply available for sale will be halved again in April.”

Michael Saylor is a major investor himself and naturally has a vested interest when he reports favourably on Bitcoin – this fact should always be taken into account when his “opinion” is quoted.

Attorney John Deaton, who represents XRP investors, believes it is unlikely that the expected fine of USD 770 million for Ripple will be successful in the legal dispute between Ripple and the SEC. He bases this prediction on various factors that could influence the court’s judgement.

Deaton first emphasises the importance of the US Supreme Court’s ruling in the Morrison case, which effectively limits the SEC’s jurisdiction to securities sales within the United States. This gains significance as Ripple’s sales of XRP in the United Kingdom, Japan, Switzerland and other regions are subject to their own procedures. In addition, XRP’s legal standing in these jurisdictions strengthens Ripple’s position.

For example, regulators such as the Financial Conduct Authority (FCA) in the UK and the Financial Services Agency (FSA) in Japan have not categorised XRP as a security. This categorisation is crucial as it allows XRP sales to continue lawfully in these regions and poses a challenge to the SEC requiring repayments of global transactions.

Furthermore, Deaton emphasises that the case against Ripple is not based on fraud, but on a regulatory dispute. So the chances for Ripple are much better than they were a few months ago!

Influential asset manager BlackRock is apparently not only planning a “direct” Bitcoin ETF, but also wants to launch a similar vehicle for Ethereum. BlackRock’s plans for a spot Ethereum ETF have now been confirmed, according to a so-called 19b-4 filing submitted to the US Securities and Exchange Commission (SEC) on 9 November.

Stock exchange Nasdaq filed the corresponding 19b-4 form with the SEC on behalf of the $9 trillion asset manager for a proposed ETF called “iShares Ethereum Trust”.

This move signals BlackRock’s intention to expand its ETF ambitions beyond Bitcoin. On 9 November, it was also announced that BlackRock had registered the company iShares Ethereum Trust in Delaware. This was the first indication that an application for a spot Ethereum ETF could be imminent. BlackRock and other financial institutions have expressed increasing interest in crypto ETFs in recent months.

James Seyffart, ETF analyst at Bloomberg, noted that at least five firms are in the running to receive Securities and Exchange Commission approval for a spot Ethereum ETF.

These include VanEck, ARK 21Shares, Invesco, Grayscale and Hashdex.

Digital Asset Market

From a chart perspective, Bitcoin is trading around the newly formed annual high between ~$38,500 and ~$36,500. Due to the increased volatility, the trend channel has now also widened significantly. Due to the “missing” setbacks, which have not materialized for weeks, it is not possible to classify the long-term trend.

At the moment, any narrative seems right to justify investments and to shift capital towards altcoins, which are subsequently rising sharply as they have an unusually high volume.

The next price targets in case of positive development: ~$37,900, ~$38,750, ~$40,250
The next price targets for negative performance: ~$36,000, ~$35,300, ~$33,850

Currently, if an increased risk is to be taken, Bitcoin offers entries around smaller support zones after minor setbacks. However, altcoins that have not yet experienced a major rise are likely to offer much more lucrative entry points, although appropriate risk management is always necessary, as setbacks typical of the cycle should also be factored in.

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