 December 8, 2020  Everything you need to make sense of the crypto markets and beyond Sponsored By:  By the CoinDesk Markets Team Edited by Bradley Keoun If you were forwarded this newsletter and would like to receive it, sign up here. Bitcoin (BTC) -1.8% $18,825 Ether (ETH) -2.8% $575 (Price data as of Dec. 8 @11:48 UTC) TODAY:
Price Point Bitcoin was lower for a second day, dropping below $19,000 after bulls failed to push prices past the psychological $20,000 threshold.
"The overly confident market has been dampened," the Norwegian crypto-market analysis firm Arcane Research wrote Tuesday in a report.
In traditional markets, European shares slid, led by travel-related companies, and U.S. stock futures pointed to a lower open, as investors worried over the impact of rising coronavirus cases. The pound weakened for a third day as optimism over a Brexit breakthrough faded, according to Bloomberg News. Gold was little changed at $1,863 an ounce.
Market Moves One theme comes up repeatedly in conversations with crypto insiders: just how fast the industry is moving. Even jaded pros are sometimes astonished (and annoyed) at how much new information they have to process each day.
Contrast that dynamic with the pace of progress in the U.S. stock market, where lately economic stimulus seems to be the only real thread in the news. There are reports of proposed stimulus bills from Congress, speculation over who might benefit most from stimulus and analysis on whether the stimulus is already priced in. Even last week's disappointing report on U.S. jobs growth served to drive up stock prices, based on the topsy turvy logic that the prospects for more economic stimulus had increased.
Bitcoin prices have stagnated around $19,000 since surging last week to a new all-time high, yet the industry developments show no signs of slowing. Monday alone brought news of the cryptocurrency exchange Bittrex looking to list tokenized versions of stocks like Apple, Amazon and Tesla and an announcement by the digital-asset fund Arca of new custodial support for a tokenized U.S. Treasury-bond fund. On the regulatory front, G7 finance ministers during a closed-door virtual session reportedly discussed the need to implement new rules for digital currencies, perhaps looking to slow things down.
There's certainly been no slackening in the pace of newcomers from traditional finance nudging into the crypto space or simply commenting on the bitcoin craze.
On Monday, a unit of Wells Fargo, the giant (and, at least for the past several years, beleaguered) U.S. bank, published a seven-page report devoting a full page to bitcoin.
"Cryptocurrency investing is a bit like living in the early days of the 1850s gold rush," according to the report from the Wells Fargo Investment Institute. "As we roll into 2021, we'll be discussing the digital-asset space more – its upside and downside."
That's an explicit indication that even more attention is coming the way of cryptocurrencies, not less, as the calendar year rolls over.  Chart created by the Wells Fargo Investment Institute and included in a report published Monday for wealth-management clients. It shows bitcoin's price (in red) versus gold (gold) and the Standard & Poor's 500 Index of U.S. stocks (gray). But it turns out that bitcoin itself isn't moving particularly quickly, at least by the historical standards of the underlying blockchain network. And that might be a bullish indicator.
On Monday, First Mover dug into one cryptocurrency fund's analysis of whether bitcoin has climbed too far, too fast, or if the rally is just getting going. (ICYMI: Projected growth in the blockchain network suggests a price of $51,611 to $118,544 in five years, as valued under Metcalfe's Law.)
Another firm, Coin Metrics, which specializes in blockchain data analysis, noted in a recent report that it tracks a measure known as "1-year active supply." This is the proportion of total bitcoin supply transferred over the blockchain network over the past year.
"As BTC price rises, an increasing amount of dormant supply typically starts to become active as long-term holders sell or move their BTC," Coin Metrics wrote, using the trading symbol for bitcoin. "Conversely, when BTC price is low for extended periods of time, 1-year active supply percent tends to drop as investors hold through crypto winters."
Recently, the 1-year active supply percentage appears to have ticked up slightly, climbing from a low of 36.5% reached in early September. But the metric is still below 40%, and well off the 59% reached in early 2018, in the wake of bitcoin's last bull run to nearly $20,000.
That might indicate there's little appetite among bitcoin holders to take profits just yet. And it means that newcomers might have to pay up if they want to get in. - Bradley Keoun  The percentage of bitcoin transferred across the blockchain network in the past year (green line), superimposed on the number of bitcoin transferred (red line). (Coin Metrics)
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Bitcoin Watch  Chart showing bitcoin addresses in accumulation. (Glassnode) Bitcoin is on the offer this Thursday morning alongside losses in the European stock markets.
The top cryptocurrency is trading well below $19,000, representing more than a 2% drop on the day, having faced multiple rejections near $19,400 in the past 48 hours.
Risk sentiment has soured with fading prospects of the U.K.-European Union trade deal; major European indices are down 0.3% and futures tied to the S&P 500 are pointing to a negative open.
Bitcoin's repeated failure to keep gains above $19,000 and evidence of investors liquidating at current levels is forcing some analysts to reassess bullish positioning.
"We are leaning bearish here and beginning to unwind some long exposure in bitcoin and DeFi selections," said Patrick Heusser, a senior cryptocurrency trader at Zurich-based Crypto Broker AG. "The reasoning is on some technicals and how the spot market is structured, with large orders at around the lifetime high."
The pullback could gather steam if risk aversion in global stock markets worsen, giving a lift to the safe-haven U.S. dollar. That's because the cryptocurrency's price moves have roughly mimicked those of global equity markets, while moving in the opposite direction from the dollar index, since the March crash. The 40% rally seen in November came alongside impressive gains in global equities and a sell-off in the U.S. dollar. As such, it is too early to say that bitcoin has become resilient to a potential sell-off in equities – or a rebound in the dollar.
The global macro trade of sell-dollars-and-buy-everything-denominated-in dollars is still very much active. If the dollar bounces due to stock market sell-off or any other factor, the cryptocurrency could suffer a notable price pullback.
Support is seen at $18,500 (Dec. 5 low) followed by $18,000 (psychological hurdle), and $16,200 (50-day SMA). Resistance is located at $19,400 (Sunday-Monday high), $19,920 (record high). - Omkar Godbole
What's Hot
 Looking Back, Moving Forward: Crypto's Most Influential in 2020
Each year since 2014, CoinDesk has identified the crypto community's "most influential" members. The community needed influencers to spread awareness, build confidence and set precedents for the digital currency industry to reach its full potential.
These evangelists broke through all the white noise and ushered in a new wave of enthusiasts into the space. To recognize their contributions, CoinDesk launched its "Most Influential" franchise to highlight individuals who moved the needle.
Over two days on Dec. 7-8, a special CoinDesk Live series looks back to the first list and takes stock of the industry's progress, and zooms forward to reveal CoinDesks' seventh Most Influential list to recognize the latest pioneers who helped take the industry forward. Watch CoinDesk Live: Most Influential 2020 on CoinDesk.com, YouTube and Twitter on Dec. 7-8.
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 The latest CoinDesk Monthly Review compares bitcoin's November 2020 rally with the asset's market and network performance three years ago and looks at some metrics on the progress toward the launch of Ethereum 2.0. Download the free CoinDesk Research November 2020 Review.
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