Daily market commentary from 21.10.2020

An overview of what is happening in the crypto markets, summarised daily by Crypto Finance AG Senior Trader Patrick Heusser in the market commentary.

Market commentary

Good Morning!

It is very tough for me to read the current state of the market. Whenever this happens, I try to do a quick recap of recent events and then position them in the current price pattern.

OKEx debacle

Let’s start with the OKEx debacle. We saw Bitcoin (BTC) reacting to it, but only to a mild degree (down roughly 0.5%). Then we had the OKB coin, which lost around 30% within two days. It has in the meantime recovered roughly half of its losses and is trading at around $5.

Shortly after that, we heard central bankers speaking fairly positively about CBDCs. This is not a bullish case for bitcoin per se, but it helps to keep the narrative of upcoming mass adoption alive.

US election

With the election in the US fast approaching, certain fiscal promises are being made, and politicians are trying to win votes by pushing the FED to print more money. This definitely has a lagging effect on the price of BTC.

Maybe the BTC treasury holding announcements by Microstrategy and Square are still fresh in the minds of some traders, and maybe even in the minds of some C-level executives, who are now asking themselves if they should also invest some money/reserves into BTC.

Strange Rotation

Then a strange rotation happened yesterday with Ethereum (ETH) being sold for BTC. In fact, not only ETH was being sold, but also several other smaller tokens, especially in the DeFi sector. Is there a greater rotation from altcoins into bitcoin taking place? This might be related to the point above (Microstrategy and Square). If some of the “traditional” corporations start to diversify their reserves, it will be bitcoin and not any other cryptocurrency.

When I step back and look at my summary, I feel bullish for bitcoin, and see higher prices for at least the next two months. I also think that we will see greater volatility over the same timeframe. Some of the above mentioned events are not (yet) resolved or decided. The market can still take unpredictable turns. I am happy to discuss these points and any other factors you see as relevant to the current price discovery.

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About the author

Patrick Heusser

Patrick Heusser is Head of Trading at Crypto Broker AG. Prior to joining the company, Patrick worked as an Interest Rate Trader at UBS and held various positions in the IRCC (interest rate, commodity and foreign exchange trading) in London, New York, Singapore and Zurich. Patrick is an expert in trading and risk management. He also gained experience in other areas, such as building start-up companies. Patrick has a degree in banking from a business school. He has also taken various courses in technical chart analysis.

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