Cryptocurrency Analysis

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Technical Analysis of BTC/USD for 08 February 2021

Crypto Industry News:

According to Glassnode, the average hash rate of the Bitcoin blockchain (BTC) - the total processing power devoted to mining - has reached a new all-time record of over 176 EH / s.

The increase in hash rate can be explained by the increase in the price of bitcoin itself. Miners receive BTC as a reward for mining new blocks. The more a coin costs, the higher the miners' income. Therefore, as the price of BTC rises, miners are encouraged to contribute more to the overall computing power of the network.

Another factor is transaction fees - the second revenue stream for miners. Basically, as trading volumes increase - as they tend to increase in bullish periods - transaction fees also rise. Combined with the price of bitcoin, this further increases the profitability of mining.

As CoinGecko data shows, the rise in the BTC price to USD 38,000 coincided with Friday's hash rate jump. Currently, bitcoin costs around $ 38,600, while its network hash rate has dropped below 165 EH / s, which therefore means that 165 quintillion (18 zeros) hashs are computed every second across the Bitcoin network. By comparison, the hash rate of the network was around 120 EH / s in early 2020 - an increase of nearly 50% in just one year.

However, an increase in the hash rate does not accelerate the discovery of new blocks. This is because the speed of one block per 10 minutes is hard-coded into the Bitcoin blockchain and has remained largely the same for the past 12 years.

To maintain this rate, the Bitcoin network automatically adjusts its difficulty on a regular basis. Thus, even if there is a huge surge in computing power, the process of discovering new blocks will just be proportionally more difficult.


Technical Market Outlook:
The BTC/USD pair has made a new local high at the level of $40,924 in form of a Doji candlestick. Nevertheless, the price was rejected from $40,000 and is currently trading around the level of $38,600. If the level of $40,924 is clearly violated, then bulls might rally straight back to the recent local high located at $42,000 and even break higher towards new ATH. Please notice, the momentum on the RSI indicator is strong and positive, so the bulls are doing their best to resume the up trend.

Weekly Pivot Points:
WR3 - $51,306
WR2 - $46,193
WR1 - $42,645

Weekly Pivot - $37,209
WS1 - $34,108
WS2 - $28,930
WS3 - $25,324


Trading Recommendations:
The bulls are still in control of the Bitcoin market, so the up trend continues and the next long term target for Bitcoin is seen at the level of $50,000. Any correction or local pull-back should be used to open the buy orders. This scenario is valid as long as the level of $30,000 is clearly broken.





Sebastian Seliga
Analytical expert
InstaForex Group © 2007-2021

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Technical Analysis of ETH/USD for 08 February 2021

Crypto Industry News:

PayPal CEO Daniel Schulman said the existing financial system is outdated and that his company will be investing a lot of money in blockchain and digital currencies. Schulman explained:

"We all know the current financial system is antiquated, and we can envision a future where transactions are completed in seconds, not days. A future where transactions should be cheaper to execute and a future that enables all people, not just affluent, being part of the digital economy. We are investing heavily in our new cryptocurrency, blockchain and digital currency business unit to help shape this more open future. "

The new cryptocurrency business unit is expected to be launched later this quarter. The CEO also revealed that customers will be able to use cryptocurrencies to pay for goods and services at 29 million PayPal sellers worldwide. This service is expected to go live before the end of this quarter.

Schulman said he hopes to launch its first international exchange in the next few months, and also expects to integrate cryptocurrencies with Venmo later this year. It also found that anyone who signed up for crypto uses their app twice as often as before.

PayPal announced in late October that its more than 300 million users would now be able to buy, store and sell Bitcoin and other digital assets through their PayPal accounts. The decision resulted in a sharp rise in BTC prices at the time.


Technical Market Outlook:
The ETH/USD pair has hit the level of $1,745 and $1,755 which were the projected target levels for ETH after the triangle pattern breakout. After those levels were hit, the market reversed quickly towards the technical support located around the level of $1,478 and bounced. Despite the deep pull-back the up trend is being continued and the level of $1,755 might be hit again soon. The momentum is positive and market conditions are now bouncing from the oversold levels on the H4 time frame chart.

Weekly Pivot Points:
WR3 - $2,306
WR2 - $2,035
WR1 - $1,838

Weekly Pivot - $1,545
WS1 - $1,349
WS2 - $1,062
WS3 - $860


Trading Recommendations:
The up trend on the Ethereum continues and the next long term target for ETH/USD is seen at the level of $2,000, so any correction or local pull-back should be used to open the buy orders. Please notice, the up trend starting to go vertical, so the volatility will be higher than average. The bullish scenario is valid as long as the level of $830 is broken.






Sebastian Seliga
Analytical expert
InstaForex Group © 2007-2021

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Forecast and trading signals for Bitcoin on February 8

Bitcoin, H1 chart


Bitcoin continues to trade upwards in the H1 chart, however, it is unlikely that the quotes will manage to break above the current high. But even though the cryptocurrency is far from overcoming the uptrend line, a rebound from it will definitely trigger a continued bullish movement. At the moment though, quotes have gone below the critical line, which somewhat increases the chance that Bitcoin will begin trading downwards soon. To add to that, the cryptocurrency is near its all-time highs, so the market will need new reasons to update them. Hence, the uptrend line is the most important right now, as overcoming it will enable players to pull BTC down, which is ideal since the cryptocurrency has been rising in price for quite a long time already.

In an earlier article, it was mentioned that short positions should be opened once the trendline is broken. But since this scenario did not happen, it was not necessary to trade shorts over the past day. Instead, traders continued to trade long positions in BTC, as a result of which price bounced off of 37721. Now, players can look forward to further increases towards 39936.


Bitcoin, M15 chart


Both linear regression channels moved downwards in the M15 chart. But in the H1 time frame, there is a signal to buy, which means that there is still a chance that Bitcoin will resume trading upwards in the next two days.

In another note, news emerged that many central banks view cryptocurrencies as a threat to the stability of the financial system. They believe that the cryptocurrency market should be tightly controlled and regulated, arguing that it is mostly used to carry out illegal activities. However, in one of the studies conducted at the very beginning of the cryptocurrency boom, experts found out that most illegal transactions use the US dollar more than with all cryptocurrencies combined. Thus, most likely, the heads of the central banks, Ministries of Finance, as well as governments, simply want to control what is beyond their control. They continue to constantly criticize cryptocurrencies in order to reduce demand for them. For example, Andrew Bailey, the head of the Bank of England, has recently joined a cohort of critics, who said that a truly stable and strong cryptocurrency has not yet been created. Bailey believes that as long as cryptocurrencies are not regulated by anything or anyone, they cannot be considered a stable means of payment and full-fledged currencies. Aside from that, he claims that cryptocurrencies were not created to facilitate and reduce the cost of transfers and payments. Yes, they will certainly develop, but only those that will later be tied to fiat money, such as digital currencies like the euro or pound. In any case, demand for cryptocurrencies will continue anyway, and since governments and central banks have not yet found a way to control its circulation, there is a high chance that price will continue to soar in the future. It must not be forgotten though that all cryptocurrencies are very volatile, and its rate is entirely dependent on traders who do not need fundamental information to trade in the market.

Anyhow, there are two trading ideas for February 8:

1) Although bulls have lost control of the market, the upward trend continues. Therefore, it is best to continue opening long positions in BTC/USD, especially after a rebound from the uptrend line. Its targets will be $ 39936 and $ 41,286, while the take profit level is $ 2900. Longs may also be set up after a rebound from $ 37721.

2) Bears are trying to seize the initiative in the market, however, they still lack the strength to move past the trend line. But if it is overcome, then it is ideal to sell to $ 36534, a break below which will bring BTC/USD to $ 34840 and $ 33398. In such a case, take profit as soon as the quote reaches $ 2,400.


Explanations for illustrations:

Support and Resistance Levels - targets when opening long or short positions. Take Profit levels can be placed near them.

Kijun-sen and Senkou Span B lines - lines in the Ichimoku indicator that are transferred from the H4 time frame to the H1 time frame.

Support and resistance areas - areas from which the price has repeatedly bounced off.

Yellow lines - trend lines, trend channels and any other technical patterns.




Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

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Bitcoin soars above $ 40,000



According to recent reports, Bill Miller, an experienced hedge fund manager, intends to become an investor in the Grayscale Bitcoin Trust.

In fact, his flagship fund, the Miller Opportunity Trust, has already filed an amendment to the US Securities and Exchange Commission in order to be able to invest in Bitcoins. It is said that if the investment garners more than 15% of the company's assets, Miller will not add additional investments.

The Miller Opportunity Trust is jointly managed by Miller and Samantha McLemore.

As of December 31, 2020, the fund has assets worth $ 2.25 billion.

This suggests that the investment in GBTC could become as high as $ 337 million.

Against this background, Bitcoin soared above $ 40,000.

Clearly, the growth was fueled by increasing interest from institutional money such as Bridgewater Associates and Miller Opportunity Trust.

To add to that, on Friday, QCP Capital said private gold holders are switching to BTC.

Because of this, there is a chance that BTC could reach $ 85,000 in the future.






Andrey Shevchenko
Analytical expert
InstaForex Group © 2007-2021

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Ripple without pump is not interesting

The volatility of the XRPUSD pair has not been encouraging since Friday. The quotes were within the dotted sideways of 0.4222 to 0.4532 for the last three days, and at the end of the last trading session, they came out of it down. However, the decline was short-lived. The movement going down was stopped by the mirror level of 0.3914.

At the time of writing, the price is testing the strength of the 0.4222 border, which so far works as a resistance. If the rebound goes down from it, it will turn out to be true, the technical reference point going down will be the mirror support of 0.3914.

However, despite the prerequisites for a decline, it is not necessary to make a final conclusion about the movement of XRPUSD going down. Although the trading range is narrow, the proto-trading level of 0.4222 is a situation of uncertainty. This means that there is a possibility of growth, but also with a small margin of movement up to the dotted resistance of 0.4532.



Against this background, transactions with this cryptocurrency pair do not look very interesting yet. Unless you go to the thirty-minute timeframe and track there which side of the level of 0.4222 will form the final consolidation of XRPUSD. But here, as they say, the taste and color of the timeframe and the strategy of a friend may not be there.





Ekaterina Kiseleva
Analytical expert
InstaForex Group © 2007-2021

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Elon Musk's tweet allowed Dogecoin to temporarily hit the top 10 by cryptocurrency capitalization

The genius, billionaire, playboy, philanthropist, and conqueror of Mars from Twitter, Elon Musk has once again shown his ability to influence the stock markets. The head of Tesla and SpaceX gave a whole stand-up concert of memes dedicated to the comic Dogecoin cryptocurrency over the weekend. However, apparently, Musk himself underestimates the power of his own jokes and tweets. Indeed, after the publication of several memes, the value of digital currency skyrocketed and for some time even broke into the top 10 cryptocurrencies in terms of total capitalization.



Thanks to Elon Musk's posts, the value of Dogecoin has increased by almost 50%. After Sunday tweets from the head of Tesla and SpaceX, the digital asset has risen in price from $0.043 to $0.087. The cryptocurrency not only temporarily found itself in the top ten but also almost renewed the historical maximum of prices set on January 29. The main irony is that the previous record for Dogecoin quotes was also set using a tweet from Elon Musk. As of February 8, 2021, the total capitalization of the meme cryptocurrency is $9.1 billion.

Comparing the current growth of quotes for cryptocurrency and a similar case that occurred on February 4, you can see a certain decline. After one tweet from Musk a week ago, the value of Dogecoin soared 1.5 times and consolidated itself in a safe zone. The effect of the tweets posted over the weekend showed the price of a digital asset to rise within 50%. It would seem quite evident that the "strength" of Musk's tweets is gradually declining. However, this is a misleading impression. After all, the rise in prices for cryptocurrency this weekend began with similar indicators of the value of the crypt on February 4. On the contrary, the new growth in Dogecoin prices started from the indicators set just last week. Taking this into account, one can note a massive demand for an asset, dictated by the will of one person. The piquancy of the situation is added by the fact that the top 10 in terms of capitalization includes a comic cryptocurrency, on the coat of arms of which a dog flaunts, the Shiba Inu breed. Despite this, the digital asset is showing a massive surge in growth, although it is still infinitely far from the leaders of this market.





Artem Petrenko
Analytical expert
InstaForex Group © 2007-2021

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Snoop Dogg becomes Snoop DOGE. ETH hits all-time high. BTC breaks $40K

The BTC price has almost hit a new record high, settling at $40,500. The leading cryptocurrency rose by more than 7% this weekend, approaching its all-time high of $42,000, recorded at the start of January 2021.



Last week, Elon Musk provided active support to cryptocurrencies, tweeting about digital coins, including BTC. On top of that, Musk shared memes about dogecoin, boosting the cryptocurrency.

Many experts have lashed out at the tweets. They believe that this causes sharp fluctuations of digital coins. Many regulators have also stated that high volatility of cryptocurrencies can lead to a complete loss of funds, warning investors to abandon risky investments. In the light of recent events, demand for e-cash skyrocketed both among private investors and hedge fund managers, causing additional risks in case of the price decline. Nigeria's central bank has ordered banks and other financial institutions to close all accounts engaged in cryptocurrency trading. According to the regulator, this poses threats to the financial system of the country. According to the bank's announcement, it was a necessary measure that would help save Nigeria's population from risks related to cryptocurrency trading. Another reason for blocking clients' accounts was the fact that digital coins are used for money laundering and terrorist financing.

As for bitcoin trading, a breakout at 37,900 and a retest of this level will indicate the strengthening of the cryptocurrency. The price may test the annual high and even reach a new one if trading is above 37,900. Then, everything will depend on support for the new historic highs. However, I would like to warn investors against buying bitcoin at the highs, since it is possible that a significant correction will begin in the near future, namely in the spring of this year. Similar correction occurred at the beginning of 2018. If BTC is below 37,900, it may plunge even further. In such a case, the closest support for the price will be the 33,300 area. Below this level, strong bullish activity may be observed only in the 28 900 range.



Dogecoin

An interesting story happened with dogecoin last week. Musk's tweet about dogecoin boosted its price to a new all-time high. Recently, the market capitalization of the token have soared to $10.5 million for a brief moment. As a result, the coin entered the top 10 cryptocurrencies by market capitalization.

In a few hours, American rapper Snoop Dogg joined Musk in tweeting a meme about Shiba Inu, mentioning @elonmusk. Consequently, the price of dogecoin only surged.



Ethereum

There is also good news for buyers of ether. The Chicago Mercantile Exchange (CME) officially launched a futures contract on ether today. The decision came in the middle of January 2020. Trading in ether futures went live on Sunday, with the February contract registering an opening price of $1,669.75. At the same time, the price in the spot market was approximately $1,600. The world's first ether futures will become a good investment tool that will help attract even more institutional investors. Consequently, it will only increase the market capitalization of the second largest cryptocurrency.

As for the technical analysis of ETH, the digital coin consolidated above the 1441 range. The main task for byers was to keep the instrument above the new support of 1484. If the price breaks through the resistance level of 1760, which is also the historic high, it may well rise to the psychological level of 1800 and 1850.



Demand for ether will only increase. Many investment funds will perceive ether as a new investment instrument with a high deflationary potential after adding the futures. This will make ether even more attractive compared to other cryptoassets.




Jakub Novak
Analytical expert
InstaForex Group © 2007-2021

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Bitcoin Eyes New Historical Highs!

BTC/USD has become strongly bullish again after passing above the former highs!

Bitcoin is flirting with the 40,000 psychological level after ending its minor retreat. The rate came back down only to retest the static support, an obstacle, before resuming its major uptrend.

Technically, it indicated that its corrective phase was over and that buyers could take the lead driving the rate at least until the 41,986 all-time high. Also, fundamentally, it remains strongly bullish, so further growth should not be a surprise.


BTC/USD BUYERS IN CONTROL!


Breaking above the 38,769 level confirmed bulls' power and announced that BTC/USD could climb above the 41,986 historical high. The price slipped lower to retest the Pivot Point (37,409) before trying to take out the resistance represented by the upper median line (UML) and by the R1 (42,480).

Passing above the former high signals strong bulls. Still, BTC/USD could move sideways in the short term accumulating more bullish energy before violating the upper median line (UML) and the R1.


BITCOIN TRADING TIPS!

Closing above the 38,664 high represented a long signal. The temporary retreat could help us to go long as well. Also, the rate's incapacity to reach the lower median line (LML) indicates an upside breakout through the upper median line (UML). Such a breakout to a new higher high could bring a new long opportunity.

Personally, I believe that the upside scenario is safe as long as BTC/USD is located above the pitchfork's median line (ML) and above the S1 (33,820).

If the upward movement continues, the R2 (46,069) and the R3 (51,140) could be used as targets.




Ralph Shedler
Analytical expert
InstaForex Group © 2007-2021

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Futures launch on Chicago Stock Exchange caused Ethereum to rise

The first week of February turned out to be very fruitful for the cryptocurrency market. All major digital currency has shown significant growth, which has not been stopped by worries in the global financial markets. However, for one cryptocurrency, February could be a truly defining month. We are talking about the altcoin Ethereum, which showed rapid growth in 2020.

Even though Bitcoin is only visible somewhere on the horizon, Ethereum is showing stable growth. The cryptocurrency had certain drawdowns in price in the middle of last week, and experts feared a significant drop in the price of ether amid news about the launch of futures. Market participants were embarrassed by the digital asset's network activity, which did not show the necessary growth dynamics, which could negatively affect the balance of supply and demand.



However, on the night of February 8, the Chicago Mercantile Exchange launched Ethereum futures trading and the worrisome rumors somehow died down. After a slight drop in price to $1,490, the ether indicators began to creep up. By Monday morning, the price of the main altcoin is already holding at $1,635. Recall that the historical maximum of Ethereum is $1,760, and there is every reason to believe that this barrier will soon be overcome. The new product has appeared on the Chicago Stock Exchange under the ticker ETH, and New York Digital Investment Group and Genesis are among the companies providing liquidity for Ether futures.

Ethereum will significantly increase its total capitalization, because, in addition to the launch of futures, altcoin shows excellent activity on crypto markets and is actively rising in price. Don't forget that on February 4, the transaction fee on the Ethereum network exceeded $20, rewriting the record set on January 11. Moreover, in just less than a month and a half in 2021, the price of Ethereum increased by 139%.




Artem Petrenko
Analytical expert
InstaForex Group © 2007-2021

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Trading Signal for BTC/USD for February 08 - 09, 2021: Key level $43,625



The Bitcoin registers strong rises after the news that Tesla has invested 1,500 million dollars in this cryptocurrency, and also plans to accept this digital currency as a means of payment, according to Bloomberg. Prices for the digital asset rose to a record high above $ 44,000 after the news.

At the moment, it is trading near the Murray +2/8 resistance zone, this level is key as it is a strong resistance zone, we expect BTC / USD to consolidate below this level.

If Bitcoin trades below $ 43,750, we have a good selling opportunity with targets at the +1/8 Murray zone ($ 40,625).

The eagle indicator is very overbought, a technical correction is imminent in the next few hours to the 21 SMA around $39,317.

If the BTC / USD bounces in the zone of the uptrend channel, it will be a good point to buy as the sentiment of this cryptocurrency continues to remain bullish, and its medium-term goal is $ 51,500.


Support And Resistance Levels For February 08 - 09, 2021

Resistance (1) $45,879
Resistance (2) $47,738
Resistance (3) $50,834

Support (1) $42,184
Support (2) $40,146
Support (3) $38,746




Dimitrios Zappas
Analytical expert
InstaForex Group © 2007-2021