Cryptocurrency Analysis

[IFX_Selena]

The calm before the storm. JP Morgan experts lower their forecasts for bitcoin and expect an influx of new institutions.



Bitcoin has been trading very sluggishly for the last four trading days. Does it seem those market participants simply do not know what to do next? Either to fix the profit and provoke a collapse of quotes or to wait for the influx of new investors. Perhaps, if bitcoin had always traded with the same volatility as in the last four days, it could have cost just the same predicted $ 100,000 per coin, as it would immediately attract the attention of even more institutional traders. However, the last four days look more like an exception. Digital gold is right below the $ 60,000 level and just below its absolute highs near the level of $ 61,700. We still expect that the cryptocurrency will strongly adjust in value. Our goal is $ 43-44 thousand for the "cue ball" coin. We once again draw the attention of traders that each subsequent round of the upward movement is weaker than the previous one. From our point of view, this means a weakening of the "bullish" mood. And if so, profit-taking is inevitable.

Meanwhile, analysts at JP Morgan said that the real volatility of the most popular cryptocurrency is decreasing. They note that this figure is significantly lower in the last six months than in 2017. From the point of view of JP Morgan, this may attract new institutional investors in the near future, which will help the "cue ball" to continue growing. It is reported that in the first quarter of 2021, the demand for bitcoin from institutional investors fell compared to the previous quarter. Many Wall Street managers refused to invest in bitcoin in the first quarter due to its excessive volatility.

At the same time, not all investors are skeptical about bitcoin and other cryptocurrencies. The well-known billionaire in the cryptocurrency segment, Mark Cuban, recently revealed the contents of his cryptocurrency investment portfolio. It turned out that about 60% of the portfolio consists of bitcoins, 30% - ethereum, 10% - other crypto assets. The billionaire did not announce the value of the entire portfolio. Also, as part of the podcast, Cuban said that he believes bitcoin is the best alternative to gold, and ethereum is the most money-like cryptocurrency. He regretted that he had only started investing in ether four years ago, and not much earlier.

Returning to JP Morgan, the bank's experts also announced a new long-term forecast for bitcoin. In their opinion, in the long term, the cryptocurrency will grow to $ 130,000 per coin. Earlier, the bank's analysts predicted the growth of "digital gold" to $ 146,000 per coin. The decline in the forecast was due to the fall in gold prices. Experts believe that the current price of gold may attract some investors instead of buying bitcoin. Also, the bank's specialists said that bitcoin is practically not correlated with all other markets, which makes it an excellent tool for risk diversification. The bank's specialists also noted that the volatility of the cryptocurrency has been decreasing in recent weeks.



In technical terms, bitcoin was on the verge of breaking the $ 52,300 level for several days, but in the end, the bulls still held the initiative in their hands and a new round of upward movement began. However, at the moment, buyers cannot overcome the level of $ 60,000. We need a new influx of investors and that all the old ones refuse to sell off in the near future. We still allocate two important supports for the "cue ball" - $ 52,300 and $ 44,000. Overcoming any of them can provoke a strong downward movement.




Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

China proposes to ban the mining of cryptocurrencies



While the Indian authorities are pondering whether to impose a complete ban on the production and use of bitcoin and other cryptocurrencies on their territory, China has proposed to ban mining. However, we are talking only about one region of China, namely, Inner Mongolia. The authorities of the region noted the high consumption of electricity used in the production of cryptocurrencies. Thus, to fulfill the plan to preserve energy resources, according to the economic plan of China, they are going to adopt legislation that will prohibit mining and the construction of new farms for the extraction of "cue ball". It is reported that there is no question of a complete ban on cryptocurrencies in the region. There is also no information about the potential limitations of the cryptocurrency sphere in the rest of China.

At the same time, crypto experts and analysts continue to speculate whether the number one cryptocurrency in the world will be able to overcome the $ 60,000 milestone in the near future. Many believe that this is quite possible, as the fundamental background for bitcoin has improved over the past week. First, Joe Biden and Congress approved the allocation of another $ 2.3 trillion under the stimulus program, of which about $ 500 billion will be distributed among the US population as "helicopter money". Experts believe that part of this amount can get to the cryptocurrency market, thus increasing the demand for bitcoin. Secondly, many note the activities of the company Tesla, which allowed its customers to pay for cars with bitcoins. Experts believe that these two factors will contribute to the further popularization of bitcoin and push the quotes up. However, some point out that as the US economy recovers, which is growing at a high rate, thanks to regular, voluminous stimulus programs from the US government, more and more investors will want to leave bitcoin as a crisis investment tool and return to traditional stocks and bonds. Skeptics also believe that the market has already stopped responding to every message about the popularization of bitcoin with new purchases. If a couple of months ago, one tweet by Elon Musk could lead to an increase in bitcoin by 5-10 thousand dollars, now the news about the integration of cryptocurrency into their activities by such whales as Visa, Paypal, Morgan Stanley, and others does not cause such a violent reaction in the market.

We believe that the last thing to expect now is a sideways movement. Bitcoin is a hype tool and does not like long delays at its highs of value. It can drop by 50-75% and spend a couple of years trading in a relatively narrow side channel at these new levels. However, it is very difficult to imagine a movement in the sideways direction of about $ 60,000. To do this, the market needs to come to a state of equilibrium and accept the current value of the "cue ball" as fair. There shouldn't be a massive influx of new investment, however, there shouldn't be a massive sell-off. Given the fact that there are a huge number of retail and small investors in the market who do not have the opportunity to keep bitcoin on their balance sheet for many years and are focused on getting the maximum possible short-term profit, we believe that such a scenario is unlikely. Given the fact that bitcoin has not been able to continue growing for almost 3 weeks, we would conclude that a correction is still brewing. At the same time, no one is immune from the new strong growth of bitcoin, which can be provoked by large institutional investors.




Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Technical analysis for Bitcoin

BITCOIN



Bitcoin failed to break through the border of 60,000.00 again, and so, this level continued to be unsurpassed. It is still the most important for the bullish traders, followed by the maximum extremum (61,633.80), and then the next psychological level (65,000.00). Currently, a downward correction is made to the support levels of the daily Ichimoku cross (57,017.81 - 55,979.80). The psychological level of 55,000.00 has now strengthened the final line of the daily cross (54,645.46). Once the daily Ichimoku gold cross is broken and the price consolidates below, it will allow us to consider the further downward pivots (daily cloud), whose support (50,250.93) is joined with 50,000.00, and the weekly short-term trend (46,954.56) as downward targets.



The downward movement caused the key levels in the smaller time frames to be broken. As a result, they now serve as a resistance and combine forces in the area of 58,464.47 - 58,677.48 (central pivot level + weekly long-term support). A consolidation above this area can change the balance of power in the smaller intervals and confirm the rebound from the reached support levels in the bigger time frames. Here, the further upward targets are set at 59.198.14 - 60,475.47 - 61,209.13.


Ichimoku Kinko Hyo (9.26.52) and Kijun-sen levels in the higher time frames, as well as classic Pivot Points and Moving Average (120) on the H1 chart are used in the technical analysis of this instrument.





Evangelos Poulakis
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Trading Signal for BITCOIN for April 02 - 05, 2021: Strong Resistance $60,084



The Bitcoin on Friday is trading below the psychological level of 60.00, after having touched the resistance of 60.084, at this level the BTC has left a triple top, if a correction is confirmed it should trade below 58,500.

Since the Bitcoin, is above the SMA 21 and within its uptrend channel, it is likely that the upward force continue to prevail, and push it to the area of +2/8 Murray, located in 62,500.

Conversely, a break below the 21 SMA around 58,500 will signal a correction for Bitcoin, targeting the 200 EMA around 54,136.

Some analysts predict that Bitcoin this April could hit 100,000.

For example, the data analysis firm Ecoinometrics has the theory that Bitcoin (BTC) only takes a couple of months to double in price. To verify this, he developed a model that allowed him to compare the current growth trajectory of the value of the cryptocurrency with previous cycles starting from each halving.

Backing up this fundamental data with technical analysis, as long as BTC remains above the 21 SMA and 200 EMA, the medium-term outlook will continue to be bullish, hence the odds of BTC reaching 100,000 until the end of the year is not a far-fetched idea.


Support And Resistance Levels For April 02 - 05, 2021
Resistance (1) $59,521
Resistance (2) $60,235
Resistance (3) $61,048

Support (1) $58,708
Support (2) $57,180
Support (3) $56,466




Dimitrios Zappas
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Ethereum Rejected From New All-Time High!

Ethereum is trading lower at 2,015 after failing to reach the 2,144 historical high in the most recent attempt. Still, the decline could be only a temporary one as the bias remains bullish despite a minor decline.

The crypto stands far above critical support levels, so it could resume its major uptrend after ending the current retreat. ETH/USD declines as the price of Bitcoin is trading in the red in the short-term.

ETH/USD LOSES ALTITUDE!


Ethereum is located right below 2,040 former historical high after its failure to reach and retest the first warning line (WL1). The immediate downside target is seen at the pivot point (1,965).

A valid breakdown below it could signal a further decline towards 1,900 and 1,800 psychological levels. Technically, the bias is bullish as long as the price stands above the pivot point, a false breakdown could bring a new long opportunity.

Actually, we'll get a great buying signal if ETH/USD breaks above the first warning line (WL1).


ETHEREUM FORECAST!

Buy Ethereum if the price stays above the pivot point and if it makes a valid breakout above the first warning line (WL1). It could print a continuation pattern between right below the WL1.

The R1 (2,255) could be used as an upside target if ETH/USD continues to increase after the current decline.





Ralph Shedler
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

BTC analysis for April 05,.2021 - Breakout of the rising channel and triangle. Potetnial for more downside movement towards $55.000

Further Development



Analyzing the current trading chart of BTCd, I found that sellers are in control as I expected last week due to the breakout of the rising channel.

My advice is still to watch for selling opportunities on the rallies with the downside targets at $55.000 and $51.000.

Stochastic oscillator is near the oversold zone but with the fresh bear cross, which is sign that sellers are still active.





Petar Jacimovic
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Bitcoin forecast for April 5, 2021



1. How to make money on cryptocurrencies?

To consistently make money on cryptocurrencies, you need to trade only on proven trading systems. How to check the trading system? You can check it by making a quality test on history. What is a quality test and how to do it:

- Testing time - last year. In order for the test results to be objective, a sufficiently long testing period is needed. One or two months is not enough. If you test Bitcoin during a strong upward trend, it will most likely be positive. It will still be a plus where you don't buy. But when the flat starts, the whole picture will change dramatically. Therefore, you need to test at least 1 year of history, the test should contain at least 100 transactions, then the test can be called good. It takes such a long period to capture different phases of the market - flat trend, seasons, periods of holidays. And it is advisable to do a test of the last year, since later periods may not be so useful due to market volatility.

- Real test. You need to test the way it would be in real trading. "Do not see the future." This means that you should not look at the chart ahead before opening a trade. Since the psyche is capable of deceiving us, if it will be seen that the deal is unprofitable, the trader can simply not include this deal in the test. And the test results will thus be distorted.

- Excel spreadsheet. A well-done test only makes sense if its results are well-documented. Do not rush anywhere while doing the test. A quality test saves you money. Therefore, in the table, enter all the data necessary for the analysis of the transaction: the price of entry into the market, the price of exit from the market, the volume of the transaction, the result in dollars, the result in points.

- Test analysis. This is the most important stage, as it will show the effectiveness and prospects of your trading system. Analyze how your deposit has changed, and build a capital curve. Calculate the main statistical indicators of the trading system: profit factor, Sharp coefficient, recovery factor, etc. Keep in mind that the test is an ideal condition, the results during trading can be twice as bad, that is, the system must have a margin of safety.

- Test check. And the last important step is to check your test after a while. After one or two months, when the first test is a little forgotten, retest the same section of the history. Then compare both tests. If there are few differences, then the testing can be considered over. And if the tests are very different, then you need to figure out why. Maybe the trading system is too complex and the rules are ambiguous. Then such a trading system needs to be improved.


2. Analysis of Bitcoin futures volumes from the Chicago Mercantile Exchange (CME).

During the holidays, bitcoin did not move upward (image at the beginning of the article). The side correction begins again. Perhaps we will see a picture of the end of 2017 and the beginning of 2018. First, a trampling at the top, and then a deep correction. So far, we can confidently talk about the absence of a trend and the beginning of a corridor in the market. Consider the levels of maximum horizontal volumes from the Chicago Mercantile Exchange. These volumes show the activity of major players.

1.04.21 – Maximum horizontal volume level (POC - Point Of Control) - 59515
2.04.21 – Maximum horizontal volume level (POC - Point Of Control) - 60555

The point of control went up, but the price failed to stay at this height. On the weekend, a correction began, and the price fell below both levels of the POC. The bears won the market, and in this situation, from the point of view of volume analysis, it is necessary to sell.


3.Trend analysis.

Trend trading is more stable and easier for the trader. The long-term trend is easier to determine, and trades opened on such a trend have a greater profit potential. These forecasts use an exponential moving average to analyze the trend:

The long-term trend - EMA 1152 (blue) on the H1 chart, which is similar to EMA 48 on the D1 chart;
The medium-term trend - EMA 288 (red) on the H1 chart, which is similar to EMA 48 on the H4 chart;
The short-term trend - EMA 48 (black) on the H1 chart.



The upward trend is broken. The price has fallen below the EMA 48 and the EMA 288. The short-term and medium-term trends are already looking down, the long-term one is still up. There is no directional movement in the market, the trends look in different directions. In such a situation, you can consider both purchases and sales, from the point of view of trend analysis.


4. Japanese candlestick analysis.

Market analysis using Japanese candlestick analysis is the third step in this trading system. Let's analyze yesterday's daily candlestick:



Yesterday's candlestick is white, it closed upward. Candlestick configuration - Hammer pointing up, long lower shadow. Today, it is worth buying in terms of the Japanese candlestick analysis.


5. Conclusions. Statistics.

Volume analysis - SELL.
The long-term trend - BUY.
The medium-term trend - SELL.
The short-term trend - SELL.
Japanese candlestick analysis - BUY.

General conclusion: On April 5, 2021, you can buy and sell bitcoin in the short term, as different types of analysis give different forecasts, the market is flat.

Only statistics can show the effectiveness of any trading approach. According to these forecasts, transactions are made on a separate account and open statistics of these transactions are provided. Transactions are made on four instruments: Bitcoin, Ethereum, Litecoin, and BCH/USD, which are analyzed similarly.


Statement:


Today, I do not open new deals, as there is uncertainty in the market.

The risk per transaction is not more than 1%, this approach is safe. The Stop Loss for this system is set behind the low or high of the day, depending on the direction of the transaction. The profit is given the opportunity to grow without restrictions, since I do not set a take profit. I accompany the transaction by moving the Stop Loss beyond the extreme points of the upcoming sessions.

Since trading is conducted on daily charts, this recommendation is relevant throughout the day.

Trade on the trend, and you will gain profits!





Maxim Petrov
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Ethereum forecast for April 5, 2021

1. Volume analysis of ETH/TUSD from Binance

The analysis is based on the traded volume data from the Binance exchange on the daily chart. The analysis is carried out based on the footprint-profile theory. According to the theory, the movement of the level of the highest traded volume intraday can indicate the likely direction of the trend. The highest trade volume is the level with the largest number of transactions carried out. That is, it is the level of major market players. Accordingly, if the highest traded volume goes up, it indicates an upward trend. Otherwise, if the level goes down, it indicates a downward trend. Chaotic movements signal that the market is trading flat.

3.04.21 – the level of the highest traded volume (POC – PointOfControl) – 2097.14
4.04.21 – the level of the highest traded volume (POC – PointOfControl) – 1988.67

The POC has moved down. The price is above the POC. The market is correcting sideways. You can enter long and short positions.


2. Long-term trend analysis

A trend is your friend. Many traders know this saying but do not know how to use it. The answer is simple: to trade only with the trend. Thus, your trades will be more profitable and less risky. According to the classic Dow theory, there are three main trends:

long-term
medium-term
short-term

These trends should be analyzed before you enter the market. That is what we are going to do it right now.

The long-term trend is the daily trend. In this case, trades are conducted in the daily time frame and are held for several days. The analysis of the daily trend is made with the help of the 48-period exponential moving average. If the daily candlestick closes above EMA 48, it will indicate the upward trend. You should enter long positions. Otherwise, if the daily candlestick closes below EMA 48, then it is the downward trend and you should enter short positions.



The price is above EMA 48. It is a long-term upward trend. Therefore, you should consider buying the instrument.


3. Mid-term trend analysis

The mid-term trend is the trend on the 4-hour chart (H4). In this case, we will also turn to EMA 48. If the candlestick closes above EMA 48 on the H4 chart, it will indicate the upward trend. Thus, you should enter long positions. Otherwise, if the candlestick closes below EMA 48 on the H4 chart, it will indicate the downward trend. Consequently, you should enter short positions.



The price is above EMA 48. It is a mid-term upward trend. Therefore, you can enter long positions.


4. Short-term trend analysis

A short-term trend is the trend in the H1 time frame. Moreover, it can show an entry point into the market. We turn to EMA 48 again. If the candlestick closes above EMA 48 on the H1 chart, it will indicate the upward trend. Thus, you should enter long positions. Alternatively, if the candlestick closes below EMA 48, it will indicate the downward trend. Consequently, you should enter short positions.



The price is in line with EMA 48. It is a short-term sideways trend. Therefore, you can open both long and short positions. The long-term trend, the mid-term trend, and the short-term trend are not in line.


5. Japanese candlestick analysis

A classic Japanese candlestick analysis is applied to the daily time frame. The daily candlestick is analyzed.



The white daily candlestick has closed upward. Its low is below the low of the previous candlestick. It is a Hammer candlestick pattern, headed upward. The upward trend is highly likely.


6. Conclusion

Volume analysis – BUY/SELL.
Long-term trend analysis – BUY.
Mid-term trend analysis – BUY.
Short-term trend analysis – BUY/SELL.
Japanese candlestick analysis – BUY.

Conclusion: You can enter long and short positions on April 5, 2021.


7. Statistics

To analyze how effective this approach is, the data on completed transactions is tracked. The forecast is made for four instruments: Bitcoin, Ethereum, Litecoin, BCH/USD.


Statement:


I am still holding a trade in Ethereum. It has been moved into the breakeven.

A Stop Loss for new trades is placed beyond the daily extreme point. We do not set a Take Profit because we will continue to move a Stop Loss above the extreme points of the upcoming sessions.

Since trading is carried out on daily charts, this recommendation is relevant throughout the day.

Trade with the trend and you will generate profits!




Maxim Petrov
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Trading plan for Bitcoin for April 05, 2021



Technical outlook:

Bitcoin remains poised to head higher above $61,780 mark going forward but probabilities remain for a drop towards $54,000 levels first before resuming higher again. The crypto had dropped through $56,400 levels yesterday and might be vulnerable for yet another dip towards $54,000, which if fibonacci 0.618 retracement of the recent rally between $50,390 and $60,000 respectively.

Bitcoin is seen to be trading around $57,700 levels at this point in writing and remains poised to complete the correction by dropping through $54,000 mark. The next upside target could be seen above $65,000 levels in the next several weeks. Immediate price support is seen at $50,000, while resistance comes in at $62,000 levels respectively.

The overall uptrend in Bitcoin remains very much intact but prices need to stay above $50,000 mark. A break below $50,000 will open doors for a test of $43,000 lows and also up to $39,000 before finding support again. At this point, bulls have an upper edge as they remain in control with bottom line as $50,000 mark.


Trading plan:

Buy @ 54,000/54,500, stop @ 49,000, target @ 65,000

Good luck!




Oscar Ton
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Miners are making record profits in March



Bitcoin began a new round of corrective movement, once again failing to overcome either the important psychological level of $60,000, or the previous absolute maximum around the level of $61,700. As we have said many times, from our point of view, bitcoin is already overpriced. In the case of cryptocurrency, it is very difficult to apply the concept of "fair value", since bitcoin has no fair value. However, if it existed, it would clearly be much lower than the current values. Moreover, we once again draw the attention of traders to the fact that each next round of growth is weaker than the previous one. Therefore, we believe that the upward trend is weakening and is already on the verge of completion. So, either a strong correction, or a total fall, as has already happened, at least twice. The nearest target for correction is the level of $52,300.

However, as long as bitcoin continues to be at its maximum value, miners continue to earn gigantic amounts. Of course, if you count them all together. Bitcoin miners earned $1.75 billion in March, of which about 10% were transaction fees. Miners' income increased by 29% compared to February, which, in principle, is not surprising, since it was in March that bitcoin set its new value record. Thus, it is not a matter of increasing production capacities, it is an increase in the value of the bitcoin itself. Also, experts note a strong growth in shares of mining companies.

Meanwhile, experts of the bitcoin network say that bitcoin could set a new value record in the first two weeks of April. This is because the computational complexity for mining bitcoin coins has increased again. Thus, bitcoin is becoming more and more difficult to mine, which may affect its value, experts say. The forecast is $68,000 per coin until mid-April. It is also reported that mining companies continue to buy equipment for bitcoin mining, as they expect its further growth in the long term. Thus, the fundamental background for bitcoin is now extremely ambiguous and contradictory. On the one hand, enough factors speak in favor of its strong fall (this is a possible ban on cryptocurrencies in India, and reports of overheating of the bitcoin market, possible sales of their coins by retail investors, news from Tesla, Visa, and Paypal). At the same time, many market participants are not going to give up and continue to actively support the demand for the world's number one cryptocurrency. As always, the market will judge everyone. However, we believe that the situation on the bitcoin market is heating up and the "X" hour is coming.



Technically, Bitcoin was on the verge of breaking the $52,300 level for several days, but in the end, the bulls still retained the initiative and a new round of upward movement began. However, buyers are still unable to overcome the level of $60,000. Thus, the number one cryptocurrency in the world now vitally needs an influx of new investors, otherwise, most of the market participants may consider that the current value of BTC is this maximum and begin to get rid of it. We still highlight two important supports for the bitcoin - $52,300 and $44,000. Overcoming any of them can provoke a strong downward movement.




Paolo Greco
Analytical expert
InstaForex Group © 2007-2021