It’s Still Bitcoin Season

Price dips during a bull market reveal the difference between newcomers and seasoned crypto investors. While Bitcoin’s (BTC, Tech/Adoption Grade “A-”) correction from a new all-time high last week shook some weak hands out, HODLers — long-time crypto holders — knew it was nothing more than a small short-term event.

This was reinforced quickly as major assets held key support levels with conviction and even began regaining momentum over the weekend.

In the case of the No. 1 crypto by market cap, Bitcoin tested its support near $63,000 before bouncing off to trade around $64,000 today.

You can see this in the BTC/USDT daily TradingView chart below, which shows BTC trading above its 21-day exponential moving average (EMA) — the solid red line — which is acting as strong support.

The next main resistance level is near $67,000. If Bitcoin can successfully break through and retest it as support, it can easily make its way to $70,000 from there. But first, we’ll be looking to see if BTC can make a daily close above $65,500. If it can, it’ll create a base for a continued push toward $67,000 ... and beyond.

There may be volatility this week, though, as President Biden  signs his Infrastructure Bill into law today. We — along with the rest of the crypto community — will be watching carefully to see how the markets react to it ... and its controversial crypto provision.

But there is good news fresh off the press: Senators Ron Wyden (D-Ore.) and Cynthia Lummis (R-Wyo.) plan to revise that crypto provision to exclude individuals developing blockchain technology from having to report information about their users to government agencies.

This finally gives decentralized finance (DeFi) builders a room to breathe. The previous suggestion was insensible and impossible to implement, as decentralized applications (dApps) are permissionless by design, which means that they can’t collect information on users anyway.

So, the overall sentiment is bullish. And that’s without taking into account the recent release of the Taproot upgrade for Bitcoin. This is the first significant upgrade in four years, bringing smart contracts and more privacy to the Bitcoin network.

We’ve already seen what the launch of a successful upgrade can do for price action with Ethereum (ETH, Tech/Adoption Grade “A”) earlier this year. There’s every reason to expect Bitcoin to experience a similar boost from Taproot.

Speaking of ETH, the No. 2 crypto by market cap reached a bottom of its trading channel and bounced from there, as you can see on this ETH/USDT daily TradingView chart:

Exchange inflows of ETH are at the four-month low as investors continue to move their ETH to wallets or lock it up in smart contracts. This means that we are nearing supply shock. If this trend continues, the natural laws of supply and demand mean it can positively influence the mid-term and long-term price of ETH.

Which Season Are We In?

No, it’s not the altseason just yet. When it comes to altcoins, most of them are still waiting for Bitcoin to do its thing before moving.

That said, tokens from Terra’s ecosystem did well over the past seven days. In fact, they fared better than any other ecosystem.

We can expect to see the altseason stirring once Bitcoin has rallied ... and slowed. Once that happens, altcoins will be able to take the lead.

But altseason isn’t the only seasonal shift we’re looking out for. Google searches for non-fungible tokens (NFTs) are at an all-time high, with Asians showing the most interest. Also, the floors of some NFT projects are getting swept — i.e., people are buying the cheapest NFTs of some of the most promising projects, which may again raise the price and interest for them.

These are just hints that may mean that we might enter the new NFT season soon.

In a more light-hearted development, cat meme-tokens are becoming more popular … with their founders and investors now calling for “cat season.”

It would be a nice break from the dominance of dogs. Meow.

Notable News, Notes and Tweets

•  Galaxy Digital earned over half a billion dollars in Q3! Income for the Q4 currently stands at $400 million.

•  One of the largest mining firms in the U.S. wants to raise $500 million in debt to buy Bitcoin and mining machines.

•  BitGo — a digital asset trust and security company — holds $64 billion worth of crypto in custody.

What’s Next

Considering that BitGo held only $16 billion in custody last year, a jump to $64 billion shows how incredible the institutional appetite for crypto has grown over the past year. Obviously, there’s an increasing need for institutional-grade safe-keeping to match that interest.

That institutional appetite has helped push assets to incredible new heights in this bull market. And this rally isn’t over just yet as we’re still in Bitcoin season. First, we get to see what BTC can do. And after, we can look to the altcoins to lead the way as they take over for the altseason.

But don’t get tunnel vision. Large-cap cryptos aren’t the only assets worthy of your attention. There’s a growing appetite for metaverse projects and NFTs. Even cat meme tokens may generate growing levels of interest.

Am I recommending you go out and get exposure to these sectors? Not necessarily. What I am suggesting is that you keep an eye on emerging trends. Do your research to see how they’re developing and if any projects are worth a closer look.

And of course, keep checking back with Weiss Crypto Daily for the latest crypto updates.

Best,
Marija Matić

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