Daily Market Update - November 19, 2020

Bitcoin’s appeal as an alternative store of value asset is strengthening, according to analysts at Germany-based investment bank Deutsche Bank.

“There seems to be an increasing demand to use bitcoin where gold used to be used to hedge dollar risk, inflation, and other things,” Jim Reid, managing director, head of global fundamental credit strategy, said, according to ZeroHedge.

Bitcoin has long been considered by supporters as digital gold, due to its limited, predictable supply and use case as a store of value outside banking influence.

While bitcoin has gained 144% this year, gold is up 22%. Both assets seem to have benefitted from the inflation-boosting monetary and fiscal policies launched by central banks and governments across the globe to contain the economic fallout from the coronavirus pandemic.

The cryptocurrency has rallied over 25% this month alone despite hopes for a swift global economic recovery on potential coronavirus vaccines and improved risk appetite in stock markets. Gold, however, has lived up to its reputation as a haven asset by falling 1% so far this month.

The divergence between gold and silver on the one hand, and bitcoin on the other, is one of the oddities of this month, according to Reid. U.S.-based drug makers Pfizer and Moderna announced encouraging results for their experimental coronavirus vaccines earlier this month, triggering a rotation of money out of gold and other haven assets and into risk assets.

Reid told Bloomberg earlier this month that coronavirus vaccines are equivalent to global fiscal stimulus. Christian Nolting, global chief investment officer at Deutsche Bank Wealth Management, said inflation could rise moderately in 2021 and 2022, boding well for stocks and gold.

The crypto market cap stands at $495B to start the day after reaching yearly highs of $515B yesterday. $BTC saw an overdue market correction during America’s morning session, after reaching its 2020 ATH yesterday at $18.4k with tested support levels at $17,500. 

What we’re seeing:

  • Traded volumes at ~48B globally. During the three hour sell off, $BTC dropped 3% to $17,680 levels and has since been trading within a $350 range (bound between $17,600 and $17,900). Trading at neutral RSI levels and middle of Bollinger bands currently.

  • With this move we saw 122m long $BTC contracts and 87m short $BTC positions liquidated to add to the volatility.

  • $BTC outperforming all alts with $BTC dominance improving 65.7% to 66.1% overnight

  • $ETH/BTC has dropped 9% now over the past six days from 0.029 to 0.0265 levels on the lower Bollinger bands

  • $ETH/USD down 1% overnight from $483 to $480 levels with a $40 traded range yesterday during the volatility on the $BTC side. 

Alts and DeFi watch:

  • All of the top-10 large cap alts in the red around with dips ranging from 2% to 4%

  • Largest drop came from $XRP which fell 4% after seeing a strong push this week, which had it gain as much as 15% before peaking at 0.3085 levels. Currently trading at 0.030

News that caught our eye:

  • Binance Holdings Limited has sued Forbes Media LLC for defamation Wednesday over a story last month that purported to reveal regulatory evasion tactics employed by the global cryptocurrency exchange. Whether this does more harm than good will be left to be seen.

  • South Korea bans privacy coins Monero ($XMR), Zcash ($ZEC), and Dash ($DASH)

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