Week by numbers
The past week has seen a very strong move up in the cryptocurrency market. The price of Bitcoin, the largest cryptocurrency, rose by approximately 21%, while price of Ether, the second-largest cryptocurrency, increased by about 13%. The total market cap of other cryptocurrencies (excluding major stablecoins) increased by about 22%.
ETH/BTC ratio experienced a steep drop after a few days of gains, falling about 7% during the week. Bitcoin dominance, which measures Bitcoin’s share of the cryptocurrency market, rose by approximately 2%, mainly due to Ether's relative weakening.
Bitcoin dominance reached new highs this week, surpassing 61%. Conversely, the ETH/BTC ratio, which spiked after the U.S. election results, has almost fully retraced and is nearing its early November lows.
Among the tokens traded on the Kvarn X platform, the biggest weekly gains were seen in meme coins such as DOGE (+112%), PEPE (+104%), and BONK (+78%). Few losers during the strong rally were LDO (-16%), AAVE (-9%), and UNI (-5%).
A Historic Week for Bitcoin
For Bitcoin, the largest cryptocurrency, the past two weeks have been historic. Last week saw the largest single-week dollar gain in Bitcoin’s history (about $11,700 / 17%). Immediately following this, on Monday, November 11, 2024, Bitcoin achieved its largest single-day dollar gain ever (approximately $8,300 / ~10%).
From the moment the U.S. presidential election results began to clarify early Wednesday morning, Bitcoin’s price has increased by approximately 27% in just over seven days. This translates to an astounding $430 billion rise in Bitcoin’s total market capitalization in about a week.
To put this into perspective, Bitcoin’s market capitalization increased in a single week by an amount equivalent to its entire market cap at the start of 2023. From the bear market lows of less than two years ago, Bitcoin's market cap has more than quintupled, with one of those multiples achieved in just the past seven days.
Local Top Soon?
Anyone who has traded cryptocurrencies knows that in a bull market, the challenge isn’t so much making profits as it is taking them. When prices rise nearly vertically, it’s hard to find motivation to close positions, but it’s important to remember that steeper the rise, the sharper the corrections tend to be. In this bull market, we aim to highlight moments when it might be worth considering taking at least some profits.
From recent price movements, we have identified a few observations worth considering.
Bitcoin’s Four-Hour Chart Observations:
1. The past week’s historic rally has pushed the Relative Strength Index (RSI) to very high levels. On Monday, it reached a reading of 90, which is typically interpreted as highly overbought.
2. However, the pace of price increases has clearly slowed since Monday, visible as a “bearish divergence” in the RSI (price makes a higher high, but RSI forms a lower high).
Of course, neither of these necessarily signals a local top. In a steep bull market, RSI can remain overbought for an extended period, and any slowdown in a rally this rapid will naturally manifest as bearish divergence in RSI.
These signals suggest keeping an eye out for other potential indicators of a local top. One such indicator might be found in the behavior of the altcoin market.
Bitcoin vs. Altcoins:
The chart above shows that on Wednesday, November 13, 2024, Bitcoin reached a new high of around $93,500, surpassing Tuesday’s peak. However, the total market cap of cryptocurrencies excluding Bitcoin and major stablecoins (TOTAL2-USDT-USDC) formed a lower high compared to Tuesday. This suggests that the altcoin market as a whole has not fully kept pace with Bitcoin's rally.
If higher-risk altcoins begin to underperform relative to the lower-risk Bitcoin, it could indicate that cryptocurrency investors’ collective appetite for risk could be peaking. If this hypothesis holds, a local top in the altcoin market would likely soon be followed by a top in Bitcoin as well.
It’s important to note that this is based on just one day’s observation, and drawing any strong conclusions should be avoided. However, combined with Bitcoin’s high RSI and bearish divergence, it suggests keeping an eye out for a potential local peak. At the very least, investors might consider whether to open new positions witt Bitcoin sitting justl below its current high of $93,500 or wait for a potential breakout above this level, which would significantly boost confidence in the rally’s continuation.
Meme Coins on the Rise
As noted in the beginning of this newsletter, one striking feature of the past week has been the strong performance of meme coins. Many meme coins on the Kvarn X platform saw weekly gains of 50–100%.
Couple of observations about this meme rally:
DOGE posted an impressive gain of over 100%. Its rally is especially noteworthy given that it is the largest meme coin by market cap and, excluding stablecoins, the fifth-largest cryptocurrency overall. Going forward, DOGE is very likely benefiting from the establishment of the Department Of Government Efficiency (DOGE) under Elon Musk in the U.S.
PEPE surged sharply after Coinbase, the largest U.S. crypto exchange, announced its listing. Unlike other major meme coins, PEPE has already reached new all-time highs, while others remain far from theirs.
WIF will also be listed on Coinbase, similar to PEPE. However, it is worth noting that, unlike in PEPE's case, this news has not yet been sufficient to propel WIF's price beyond its all-time high observed in spring 2024. For this reason, we still remain somewhat cautious about its strength.
New Tokens on Kvarn X
Kvarn X offers one of the most extensive selections in Europe, continuously expanding its list of interesting cryptocurrencies and tokens. With over 160 different cryptocurrencies already available, our platform uses industry-leading trading technology to provide access to over 40 marketplaces and exchanges globally, selecting the best liquidity providers for our customers, from individual investors to institutions.
At the end of October, we expanded our selection by over 30 new tokens. Explore the latest additions on our website:
https://www.kvarnx.com/en/content/new-tokens-and-cryptocurrencies-for-october
Ideas for Building a Crypto Portfolio?
If you're wondering how to build a crypto portfolio or how to get started with crypto investing, we offer various theme-based examples in this section as ideas for constructing your portfolio. Please note that nothing in this newsletter constitutes investment advice or should be interpreted as an encouragement to make investment decisions.
Theme Idea: GameFi
GameFi combines gaming, blockchain, and decentralized finance. By integrating crypto tokens, players can own digital assets earned or acquired in-game, creating economic incentives.
Example of a GameFi-Themed Portfolio in Kvarn X:
- Immutable X (IMX)
- Gala Games (GALA)
- Beam (BEAM)
Stay tuned for more portfolio-building ideas in upcoming newsletters!
The material contained in the Kvarn Pulse is produced solely for the purpose of marketing communication. Any information conveyed through Kvarn Pulse should not be construed as an offer or an invitation to make any purchase or sale decisions, or as an encouragement to make investment decisions about any investment object. Copying or borrowing the content of the newsletter without Kvarn's express permission is prohibited. The information presented in the newsletter pertains to the situation prevailing at the time of writing, and the information may or may not have changed. Kvarn Capital Oy does not guarantee the accuracy or completeness of the information contained in the newsletter or referred to in the newsletter.
