A summary of market performance and the factors driving the markets over the last month, reflecting the general crypto market sentiment, on-chain data, DeFi, Bitcoin, and altcoin market.



General Overview 


Market cap 

Since the start of October, the cryptocurrency market's capitalization has decreased at first from $343B level to $324B on October 7th, which was a decrease of 5.41%. But since then, we have seen the start of another bullish period and continuous growth. The market reached $405.4B on the 28th, which was an increase of 25% from the 7th of October. Since then, a pullback has been made of around 5.23%, but the valuation came again to the similar levels ending October at around $400B.

(Click the image for higher resolution)
Source: TradingView

The valuation has formed a rising wedge and has now fallen back to its lower level, testing it for support. The downfall we’ve seen on the 29th of October has made a September 1st high test and found support there. If the valuation can make a higher low if it manages to find support on the triangles lower level, it would be a bullish sign. If a breakout is made below the level, it could indicate that the rise from the start of the month ended and is entering a bearish period.

 

Bitcoin dominance 

Bitcoin’s dominance has been on the rise since the start of the month, as expected, and came from 58.92% on October 1st to 64.2% on the 31st. This is a continuation of the increase that started on the 13th of September when it ended its five-wave move to the downside.

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Source: TradingView

On the 4-hour chart, we can see that it reached the upper horizontal level around which the previous 2nd wave from the descending move has been forming and was serving as support. This is why not the level serves as resistance and has caused a rejection, but this minor pullback is likely a temporary one. The wave structure implies that this is a lower degree impulse out of the higher degree five-wave move. It could have ended as a three-wave correction to the upside, but considering that the prior decrease was most likely the C wave now, a five-wave move to the upside would be expected.

 

Altcoin capitalization 

The total market cap excluding Bitcoin has also experienced an increase since the start of the month. Still, unlike in the case of the total market cap, including Bitcoin, it hasn’t exceeded its September 1st high. This means that Bitcoin has been leading the market’s growth in the previous period compared to the alts, which correlates with its rising dominance. 

(Click the image for higher resolution)
Source: TradingView

On the 4-hour chart, we can see that the valuation formed an ascending channel, unlike the total market cap, which made a rising wedge. On the 1st of October, we saw a slight spike above its upper level but soon felt to its support, forming a higher low at $128.7B. Since then, it reached $151B, which was an increase of 17.38%, after which another pullback to its support was made on the 30ts of October. Now it is sitting slightly above its support level after it failed to make a higher high. Still, we will see if this could be the start of a breakout to the downside or another establishment of support before further uptrend continuation.

 

On-chain data 

BTC: All Exchanges Netflow

In October, we saw more days of outflows than inflows of Bitcoin in a ratio of 20:11. This was bullish and correlated with the price increase. October 2nd was the highest day of outflows and was a negative 28.429 and is the highest Netflow this year.


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Source: CryptoQuant

 

As you can see from the chart, the price continued to rise after that coming from $10,571 where it was sitting at the time. Since then, another cluster of negative Netflow around the 16th of October when another spike was made and was a negative 17.777. On those days that the inflow was higher, the Netflow's highest point was on October 9th and was around 6726. The month ended with another significant negative outflow of 8536. 

This removal of Bitcoin from the exchanges is looked at as a bullish sign. It usually indicates that the market participants are getting ready to hold Bitcoin in the upcoming period.

 

Bitcoin: All Exchanges Reserve

Looking at the Bitcoin held in exchange reserves, which follows exchange wallets, has been showing a declining trend, which correlates with the negative outflow we have seen on the previous chart.

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Source: CryptoQuant

This is the continuation of the decline we have seen since the start of August and indicates that investors have been continuously accumulating Bitcoin since it was sitting around $11,729, especially after it decreased to $10,000.

 

Market Data

Market-Value-To-Realized-Value Ratio (MVRV)

This ratio increased with the price and came up from 1.43 on October 1st to 1.792 on the 31st, which was its highest point. Below 2 is considered the undervalued zone, but since it is getting close to its equilibrium level, we can say that it's getting close to its fair value.


(Click the image for higher resolution)
Source: CryptoQuant

On this chart, an interesting comparison can be made with last year. In June of 2019, the price was sitting on the same levels, but then the MVRV ratio spiked to 2.167 on the 26th, exactly where the price is now. This indicates that the current rally is a more sustainable one, although we can see a pullback as the ratio approaches the 2 marks.

 

Miner Data

Miners’ position index

Miner’s position index has been mostly above its 0 level, which means that the majority of miners have been selling their Bitcoin in October. The highest peaks have been on October 7th when it reached just over 3, the second-highest was on October 16th when it was 2.82, and the third one was on October 28th when it came up to 2.51.


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Source: CryptoQuant

These three peaks in conjunction with highs lows of -1.22, -0.82, and -0.52 have formed a triangle whose support is currently being tested on the -0.39 level. This could indicate that the miners are consolidating and are getting close to harmonizing their positioning. Worth saying is that the price continued to increase in this period, which means that even with increasing miners selling pressure, the demand has been stronger and is a bullish sign.

 

Miners pool outflow

Looking at the miners’ pool outflow chart, we can see that the outflow peaked on October 7th, reaching 4,564, which is the highest point in a while. This was when the price of Bitcoin picked up its bullish momentum again, rising from $10,670. The next significant peak was on October 16 when 4,036 Bitcoin went out from pools, and again shortly after, the price started increasing.


(Click the image for higher resolution)
Source: CryptoQuant

 

Bitcoin

Technical Analysis

On October 2nd, Bitcoin's price fell to the $10,385 level from $10,894 on which it was traded on October first. This low turned out to be the lowest point of the last month as from there, we have seen an increase of 35.61% measured to its highest spike at $14,082 made exactly on the 31st of October. A pullback has been made since then, with the price currently being traded around the $13,500 level.


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Source: TradingView

On the 4-hour chart, we can see that this rise is an impulsive five-wave upward movement that began on September 23 but is a lower level impulse from the five-wave movement that began on September 8. 

As the price reached its last year's highs, first the one made in July and then the higher one made on June 26th, 2019, rejection has been seen and now a retest of the July's high for support. This support establishment is likely to continue in the following period as we are likely seeing the 4th wave out of the Minute count developing. 

This 4th wave could bring the price of Bitcoin back to the $12,000 area where the previous resistance was broken, for a retest of support. However, the price could maintain above last July's high level and, from there, continue moving to the upside to develop the 5th wave. 

In the upcoming period, since the price has attempted to break the last year's high, we are likely to see further sideways movement as the 4th wave develops, but after it ends, a further increase would be expected. The target for the ending point of the 5th wave would be somewhere around $15,000-15,000 since the 3rd wave was the one that got overextended.

 

Fundamental Analysis

Hash Rate 

Since the start of the month, we have seen the continuation of the increasing hashpower. The total hashpower made its new all-time high when it came to 148.485M on October 18th, but a sharp decline in hashpower has been made since then.


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Source: Blockchain.com

The valuation has decreased from its all-time high to 107.644 in just 13 days and is currently sitting on the levels on which it was back in June. This is definitely a bearish sign, although this type of action occurred right after the halving when the hashpower fell from 121M terahashes per second on May 12th to 90 on May 27th. This decrease in mining power hasn't been reflected in the price, although it might in the upcoming period.

 

Velocity

Looking at the Bitcoin velocity chart, we can see an ascending trend that dates back from the 21st of August when it was sitting at 19.57. This measurement of the rate at which BTC is circulating in the economy has reached 25.469 on October 31 and is still in an upward trajectory.


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Source: CryptoQuant

It appears that the velocity has been slowing down slightly from the October 21st when the price of Bitcoin reached $12,782 as the rate of increase got slower. However, the velocity is still increasing, which could be interpreted as a sign of confidence.

 

Altcoins

Out of the top 10 cryptos, the best performing one in September was ChainLink, with an increase of 51.14% from its lowest point on the 8th of October when it was traded at $8.54 measured to its highest at $12.9 on October 24th. But on October 31st, it was traded at $11.17, which was only higher by $1 from its October 1st levels of $10.17, making a month-over-month return of 9.74%.

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Source: TradingView

Next, in line with the best performing alts among the top 10, is Litecoin, with an increase of 34.25% from its lowest point. The third is DOT with an increase of 30.74%, and the following are BCH 29%, ADA 25%, ETH 24.2%, BNB 22.74%, and EOS 15.65%. Ripple was the worst performing with an increase of just over 13%. 

Worth noting is that most of these altcoins have retraced back to the levels around October 1st, while EOS has fallen slightly below it since the start of November.

 

DeFi

Decentralized finance has been slowing down in the total value locked, especially compared to the rapid growth experienced in Q3 this year. Even so, the TVL in DeFi has made its new all-time high the previous month, reaching the $12.482B level on October 25th.

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Source: DEFI PULSE

Looking at the chart above, you can see that since then, we had seen a decline in TVL with the valuation currently sitting at $10.91B level, which is lower than since the start of the month, but now lower than at its lowest point on the 8th of October when it was $10.4B. 

Uniswap continues to dominate the market and has experienced an increase of around 4% from the last report and is currently 23.70% with $2.59B in locked assets. Next in line is MakerDAO, with around $2B, while the third is WBTC at $1.61B. 

Uniswaps highest returning yields are for ETH-DAI, which is 27.1% yearly or 0.7% daily, while its ETH-USDT pool brings an annual yield of 21.22%. In comparison, Harvest gives higher returns for these pairs. On the Harvest platform, an annual yield of ETH-USDT is 30.99% and 30.98% for ETH-DAI, while its highest yield of 465.98% is for FARM-USDC.

 

Conclusion

The month of October has been showing new efforts in the market's growth; however, this momentum slowed down near its completion. The prices of the majority of the coins are back to their October 1st levels eliminating all the gains made so far. 

Bitcoin has taken the spotlight from the altcoins as it continued testing its significant levels from last year's high but failed in breaking the resistance on those levels. Fundamentals are bullish, which is why we could expect to see the continuation of these efforts for price advancements, but the potential of the market cooling off before that is high. 

DeFi space has brought back in the background, but a new all-time high was made, which is still a good sign. The interest might have fallen, but the current pools' high yields could bring back the excitement to the market. 

In the first half of November, we could see a pullback in the bullish sentiment. After the market establishes some support, another continuation of its upward movement in the second half of the month.


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