Daily News | BTC And ETH Halt 3-Day Rally, Major Week Ahead Amid US Q3 GDP And Tech Giants Earnings Reports

Fundamental & Technical Outlook

👓 Macro

As of this writing, Bitcoin (BTC) and Ether (ETH) were changing hands at $19,394 and $1,349, or up 1.02% and 2.77% in a 24hr period, respectively**. BTC and ETH had risen 2.76% and 6.32% between Friday and Sunday. This came as a continuation of the positive trajectory brought about by Wall Street’s best week since June.**

On Friday, all three major U.S. indices ended the week on a positive note with the DJIA (+2.47%), SPX (+2.37%) and Nasdaq (+2.31%). Notably, Bitcoin and Ether’s correlation with the S&P 500 has risen to 0.29 from 0.2 three days ago.

Major catalysts to look out for this week in the U.S. center on earnings reports from Apple (AAPL), Alphabet (GOOG), Amazon (AMZN), and Microsoft (MSFT) as their performance will undoubtedly affect the Nasdaq composite index which currently correlates with BTC and ETH at an alarming 0.35 and 0.47, respectively. Also, US Q3 GDP will be released on Thursday.

Another major topic will be the ramification of export restrictions on semiconductors to China. On Sunday, Taiwan Semiconductor Manufacturing Co. (TSMC), suspended the production of advanced silicon for Chinese startup Biren Technology in compliance with the latest U.S. policy. The timing of the export controls issue coincides with general investor anxiety over a potential recession, high inflation, and ongoing supply chain constraints.

In China, participants are still digesting the implication of new Chinese leadership and PBOC’s fixing policy guidance, with the latter implying that the central bank may start to loosen its tight grip on the CNY fixing. The recently delayed economic data from China was released earlier today which saw its Q3 GDP grow 3.9% Y.o.Y, rebounding from almost stagnant growth in Q2 (0.4%) when Shanghai was still in lockdown, although still far below the official target of around 5.5%.

In Japan, the Yen (USDJPY) currently hovers at 148, down slightly from 150 last week, which is the lowest against the dollar since the year 1998. This week's volatility is set to continue, with the government’s efforts to curb rapid depreciation running counter to the Bank of Japan’s ultra-loose monetary policy.

To avoid (or embrace) volatility, traders this week should look out for:

• Monday: Purchasing Mangers’ Index (PMI) for Eurozone & US
• Tuesday: US Consumer Confidence, Earnings reports from Alphabet and Microsoft
• Wednesday: Bank of Canada Interest Rate Decision
• Thursday: US Q3 GDP, ECB Interest Rate Decision, Earnings reports from Apple and Amazon
• Friday: Bank of Japan policy decision, University of Michigan consumer sentiment

🟠 BTC Weekly Timeframe

Key Level: Monthly resistance level of 19,858 (Monthly High of Dec. 2017)

The bullish engulfing candle indicates we’ll see a retest of the 38.2% (19,792) weekly Fibonacci Retracement level this week. Notably, the monthly resistance level of 19,858 (Monthly High of Dec. 2017) sits slightly above the 38.2% level.

BTC Weekly Resistance zones

1. 19,667 - 19,858
2. 19,991 - 20,356
3. 20,516 - 20,885

BTC Weekly Support zones

1. 19,144 - 18,648
2. 18,472 - 18,143
3. 17,974 - 17,700

BTC Daily Timeframe:

Key Note: the 78.6% (19,369) Fibonacci level derived from the bullish rally between Sep. 7 - 12 serves as an anchor point to break away from the low volatility accumulation period seen between September and October.

BTC’s 3-day ascent has broken the opening price of the previous bearish rally from Oct. 18 - 20, which implies this week's outlook has turned to the upside.

But before the bulls should have any hopes of seeing BTC trend higher, first BTC will have to find more solid support between the 23.6% (19,441) and 38.2% (19,287) Fibonacci Retracement levels measured from the bullish rally.

Notably, the 78.6% (19,369) Fibonacci level derived from the bullish rally between Sep. 7 - 12 is sandwiched between the aforementioned levels and serves as an anchor point to break away from the low volatility accumulation period seen between September and October.

BTC Daily Resistance zones

1. 19,619 - 19,700
2. 19,700 - 19,858
3. 19,977 - 20,125

BTC Daily Support zones

1. 19,441 - 19,287
2. 19,287 - 19,163
3. 19,163 - 19,040

🔵 ETH Weekly Timeframe

Key Level - Monthly resistance level of 1,428 (Monthly High of Jan. 2018)

Likewise to BTC, the engulfing candle of last week indicates there will be a retest of previous resistance levels. In the case of Ether, an important level to pay attention to is 1,428 (Monthly High of Jan. 2018).

Notably, the monthly resistance level is sandwiched between the Fibonacci Extension levels (1,402 - 1,443) measured from last week.

There’s also the weekly resistance level of 1,391 (Weekly Close of Jan. 18, 2021) to set up an alert to, although the strength of this level is relatively weaker.

ETH Weekly Resistance zones

1. 1,379 - 1,391
2. 1,402 - 1,428
3. 1,433 - 1,456

ETH Weekly Support zones

1. 1,313 - 1,305
2. 1,276 - 1,264
3. 1,263 - 1,241

ETH Daily Timeframe

Key Note: 1,375 (Closing Price of the Sep. 19 Daily Candle) serves as a key indicator to gauge whether Ether can break away from the low volatility accumulation period in the past month.

ETH paints a much clearer path than BTC in terms of breaking the previous bearish rally from Oct. 18 - 20, implying a continuation of the uptrend is to be expected this week.

Likewise to BTC, ETH bulls should be wary of a short-term decline to within the 23.6% (1,342) and 38.2% (1,324) Fibonacci Retracement levels measured from the 3-day ascent, in order to find support before a continuation to the upside.

A key resistance level to watch out for is 1,375 which was also the closing price of the Sep. 19 daily candle.

ETH Daily Resistance zones

1. 1,267 - 1,379
2. 1,385 - 1,391
3. 1,392 - 1,402

ETH Daily Support zones

1. 1,342 - 1,334
2. 1,324 - 1,313
3. 1,310 - 1,297

📌 The topic of the Day: Dogechain Up 377%

Dogechain (DC), an EVM-compatible layer-2 blockchain based on Polygon, was created by Dogecoin enthusiasts to extend the technical capabilities of the wildly popular memecoin by adding smart contract capabilities.

The two projects are only related by namesake, though the community itself claims to be Dogecoin diehards.

But since being launched in August, Dogechain saw its value collapse by a whopping 90%.

Over the weekend, following the overall market movements led by Bitcoin and Ether, Dogechain saw a crazy rally from Thursday’s daily close of 0.0003768 to the current price of 0.0016822, representing 377% of gains in less than 4 days.

On Saturday, the Dogechain core team initiated a discussion to burn between 50% and 80% of the total unreleased supply of DC tokens to pump up the price even further.

This goes without saying, for traders who’d like to ride the wave, beware of macro factors that can make or break the overall movements of the cryptocurrency markets, which are usually led by Bitcoin and Ether which in turn correlate highly with TradFi, particularly the NASDAQ tech-led index.

🗒 Happenings of The Week (Oct. 21 - 23):

Notables This Week:

• 📣 The European Commission announced a DeFi-focused report to be released this week. This is a supplementary finding to EU’s comprehensive Markets in Crypto-Assets regulation (MiCA) which focuses on centralized entities, namely service providers and stablecoin issuers.

• 📣 New amendments have been added to the UK’s Financial Services and Markets bill that raises the bar for the nation’s crypto regulatory framework which gives the authority to government agencies to ban unauthorized service providers on top of stablecoin regulation provisions.

Oct. 22 - 23

• 📣 NFT project Azuki auctioned eight Golden Skateboard NFTs which will be redeemable for physical skateboards ranging between bids of 200 ETH ($271K) to 309 ETH ($420K). The floor price for Azuki’s anime-inspired NFT avatars was 11.5 ETH ($15.6K) as of Sunday.

• 📣 Brokerage app Robinhood is looking to expand its compliance team ahead of its release of a self-custody wallet. The platform was fined $30 million in August for failing to comply with anti-money laundering (AML) and cybersecurity regulations.

Oct. 21

• 📣 MakerDAO is set to move forward to transfer 1.1 billion (33%) USDC into Coinbase Custody to earn 15 million USDC in annual institutional rewards. Recently ****MakerDAO partnered with Monetalis to allocate $500 million of its stablecoin reserves into short-term US treasury and investment-grade corporate bonds.

• 📣 Argentina's national tax authority (AFIP) crackdown on an underground crypto mining farm led to 40 arrests. ONG Bitcoin Argentina, a non-profit organization that works closely with the agency, issued a statement declaring that “crypto mining in itself is not a crime when it adheres to local laws.”

• 📣 Polkadot co-founder Gavin Wood steps down as CEO of Parity Technologies Ltd. Back in June, Governance version 2 (or Gov2) went live to further decentralize the blockchain's decision-making.

• 📣 Interpol announced it will offer online police training in its own metaverse bureau. The initiative may be linked to technology research firm Gartner which estimated that one in every four people will spend at least an hour a day in the metaverse to work, study, shop and socialize by 2026.

• 📣 Messaging app Telegram is soon to launch a username marketplace on The Open Network (TON) blockchain. The username auction platform will be akin to Ethereum Name Service. TON is developed by open-source developers and is a continuation of the abandoned Telegram Open Network due to pressures from the SEC.

• 📣 Y Combinator members-only OrangeDAO launched an accelerator program that features a $25,000 grant and mentorship with web3 venture capital firm Press Start Capital. OrangeDAO raised $80 million in funding led by NEAR and Algorand in August.