● Joe Biden declared winner of 2020 Presidential Race: A look at post-election market trends
● Bitcoin and Ethereum Falter as DeFi market shows signs of life
As always, thanks for joining us with today’s edition of Overbit Insights. At the time of writing, former Vice President Joe Biden has been declared the winner of the U.S. 2020 Presidential election, by most news outlets. The final ratification of the U.S. president will be through the Electoral College (electors voting on December 14th), and final certification by the U.S. Congress on January 6th, 2021. Notwithstanding any unexpected events, the new president of the United States will be sworn in on January 21st, 2021. Given the position of the U.S. in the global financial markets, this tumultuous election can be linked to quite a few ongoing trends in finance, which we’ll cover below.
The first of which are the recent upward moves displayed by some of the G-10 currencies, such as the Japanese Yen, the Euro, and the Great British Pound. All of these, and more, displayed strength leading up to and through the U.S. election, moving up a percentage point or two. None of these currencies have cleared their local resistances, though, so this upward movement is still considered a minor swing amongst a macro trend of mostly stable, if not decreasing prices. It seems Goldman Sachs believes this macro, downwards trend will continue, at least in the case of the Euro, after removing the EURO from its list of G-10 currencies expected to outgain the dollar in the coming months earlier in the week.
The post-election movements don’t seem to be constrained to forex markets, either. Leading up to the election, gold (XAU) took a downward spike towards the $1860 level. However, gold has swiftly recovered since then into the $1950 region - the highest it’s been in over a month. Evaluating all of these trends on a macro level, it seems that the U.S. election and its associated craziness weighed on the U.S. dollar quite heavily, bringing up all markets traded against it like the G-10 currencies and XAU.
Closing out with the digital side of the markets, we look back on quite a good week for the cryptocurrency markets. After starting the week at $13,200 and $378 for Bitcoin and Ethereum, respectively, the two market leaders have seen a massive jump upwards throughout the week. BTCUSD topped outright at $16,000 on most exchanges, and ETHUSD stopped right before $470 - a nearly 20% gain for the two coins. It’s a bit early to tell if this was a local high for either pair or just a simple correction, as they have both retraced about 10% since hitting these highs.
There is a reassuring sign coming from the altcoin market, specifically the DeFi tokens, that this won’t be the end of the cryptocurrency run, though. On Friday and Saturday, 6 and 7 November, there was a massive rally across the board. Compound, Sushi, Uniswap, Aave, Core - you name it. All of these (and more) saw upwards of 50% gains within a single 48 hour period. One of the pinnacle DeFi tokens, yearn.finance (YFI) even shot up over 2x from the bottom, jumping from $7400 to $17000. Whenever we see the cryptocurrency market’s leaders like Bitcoin and Ethereum moving in tandem with the rest of the market, it’s more often than not a bullish sign.
Thanks again for reading this week’s edition of Overbit Insights. As we said in recent editions, it certainly seems like the closeout of 2020 is ramping up in terms of volatility. Here at Overbit.com, we’ll always do our best to keep you up to date and hopefully ahead of the curve amidst all the market madness.