Cryptocurrency Analysis

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Technical Analysis of BTC/USD for May 31, 2021

Crypto Industry News:
The difficulty of mining bitcoin has seen a significant decline. Along with it, the hash rate dropped to levels that had not been observed until recent reports from China in the context of mining.

The on-chain data shows that the mining difficulty on the network has been adjusted to 21.05 trillion at a block height of 685,440. That equates to a 16% drop from the recent high of May 13.

The average Bitcoin block production interval has already increased to 11.8 minutes between May 13, the date of the last correction of mining difficulties, and May 21, when the Chinese Council of State announced its desire to crack down on Bitcoin mining and trading in the country.

This interval was 18% faster than the 10 minutes per block assumed by the Bitcoin network. Additionally, the average hash rate between May 13 and May 21 has already dropped to around 147 EH / s. Following a comment from the State Council of China on Friday last week, the seven-day moving average hash rate remained relatively stable at 150 EH / s.

Some miners have started the migration process from the provinces of northern China to the Sichuan hydropower node. The power plants there are limiting supplies to energy-intensive industries, including bitcoin mining farms, due to the delay in the rainy season. As a result, there was a sharp increase in the demand for electricity by the general public, which should have been prioritized.


Technical Market Outlook:
The BTC/USD pair has broken through the short-term trend line support around the level of $36,106 and keeps going lower. The market still trades under the supply zone located between the levels of $43,1459 - $41,794, so bears are still in full control of the market and only a strong breakout above the level of $41,096 (38% Fibonacci retracement of the last wave down) would temporary change the outlook to bullish. The next target for bears is May 19th low seen at the level of $29,701. The volatility is subdued and the momentum is now negative.

Weekly Pivot Points:
WR3 - $58,682
WR2 - $52,643
WR1 - $41,961

Weekly Pivot - $35,513
WS1 - $25,163
WS2 - $18,359
WS3 - $7,655


Trading Recommendations:
Even despite the recent correction 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 $70,000. 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 on the daily time frame chart (daily candle close below $30k).







Sebastian Seliga
Analytical expert
InstaForex Group © 2007-2021

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Bitcoin inflows turn negative

US wants to collect fees from taxpayers who trade cryptocurrency. Perhaps, this was brought by the sudden boom in the crypto market. In any case, the Department of Treasury submitted a proposal that asks crypto exchanges to report to the Internal Revenue Service (IRS).

The bill requires banking and financial institutions to report large cryptocurrency transactions, in order to curb money laundering and tax evasion. Such a move is believed to make crypto transactions more transparent.

Analysts are convinced that the reason why the US government and tax office suddenly drafted a law is because investors have obtained huge profits from the crypto market. Until 2014, the question of whether cryptocurrencies should be treated for tax purposes as property or as currency was not even raised. From 2013 to 2015, fewer than 1,000 taxpayers reported profits from cryptocurrency trading.



Now, the crypto market has swelled, and according to the latest data from Glassnode, the recent bearish trend appears to be changing. There is also a high chance that Bitcoin will consolidate around $ 40,000 soon.

But over the past week, Bitcoin inflow has turned negative, which suggests that investors are leaving the exchanges. Perhaps, this is a sign that they no longer want to trade cryptocurrencies, and are transferring their assets to much safer storage. However, having fewer coins available for selling means that there is a higher chance of market growth. Hence, when inflows are bearish, outflows are bullish.

Back on April 22, Bitcoin inflow was positive. And on May 17, it reached a 14-month high of 10.628 BTC. But selling pressure increased that time, so prices fell to $ 30,000. Now, the balance on exchanges is down by 7,597 BTC, so it is at 2.53 million. Only an increase in outflow will to restore market confidence and return the cryptocurrency to a bullish path.



But since buyers are still not very active at $ 36,200, there is a high chance that Bitcoin will continue to drop, most probably towards $ 31,000. Then, a lot will depend on it as a break below the level will further sink the quote towards $25,800 and $21,600. Bitcoin will turn up only if the quote goes above $41,100. Such will set off a jump towards $46,700 and $52,000.





Jakub Novak
Analytical expert
InstaForex Group © 2007-2021

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Technical Analysis of ETH/USD for May 31, 2021

Crypto Industry News:
In an interview at the StartmeupHK virtual conference held in Hong Kong, Buterin said that while proof of stake is "still in its infancy and less battle tested" than the current proof of work model, it could ultimately reduce chain energy consumption by up to 10,000 times.

Comments come at a time of rampant criticism of Blockchain technology for its environmental impact - including from some former supporters. Tesla founder Elon Musk recently entered into a discussion about stopping Bitcoin payments, saying he cannot encourage the use of fossil fuels by mining Bitcoin. In other threads, he also called on Dogecoin to increase performance on several key indicators.

Buterin responded directly to these scalability comments in a blog post on his website describing the problems of trying to scale by simply adjusting parameters around the block size.

Ultimately, Buterin seems to agree with critics on the need for Blockchain chains to adopt newer, more efficient models - especially as the chain is growing and becoming a widely used computing network.


Technical Market Outlook:
The ETH/USD pair has bounced from the technical support located at $2,201 and is heading towards the upper channel line again. The market still trades inside of the main descending channel and the breakout above the upper channel line is the most important breakout for the bulls right now. The bears are still in full control of the market and the next target for bears is seen at the level of $1,729, $1,633 and $1,544. The nearest technical support is still seen at the level of $2,201.

Weekly Pivot Points:
WR3 - $4,688
WR2 - $4,131
WR1 - $2,922

Weekly Pivot - $2,341
WS1 - $1,141
WS2 - $579
WS3 - $181


Trading Recommendations:
Ethereum has lost more than 50% of the recent gains from the lows of March 2020 and now is currently in the counter-trend corrective cycle. The next long-term target for bears is seen at the level of $1,728 (61% Fibonacci retracement of the last wave up) and $1,420 ( January 2018 swing high). The up trend is resumed when the level of min. $3,000 is clearly violated.







Sebastian Seliga
Analytical expert
InstaForex Group © 2007-2021

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Bitcoin prices continue to decline, $10,000 per coin may be expected soon



Bitcoin prices slightly traded upward over the weekend, but today, it has already collapsed leveling all of Sunday's progress with this movement. Thus, at the moment, Bitcoin is in a downward movement and is trading around the level of $34,000 per coin which is very close to the significant level of $30,500.

After almost two weeks since the last collapse of bitcoin quotes, we can already confidently state that bitcoin has not managed to recover sharply. This means that the current prices, which many crypto analysts find very attractive, are not the same for investors, retail and large. At this time, the market does not believe that Bitcoin will resume growth right from its current positions. Moreover, an appropriate fundamental background is also needed. And it remains so now that it is more likely to see a fall to $10,000 than an increase to $50,000.

Recall that the main drivers of bitcoin sales are and have been in China recently. First, there were power outages in some regions, where many mining farms were concentrated, then several regulatory authorities of the People's Republic of China decided to ban financial organizations from providing any services related to cryptocurrencies, and finally, there was information that the country's authorities could completely ban mining. Naturally, such a news background does not contribute to the strengthening of bitcoin. There is also news from the U.S. requiring the transfer of information in any bitcoin transactions worth $10,000 to the Internal Revenue Service. With this, Bitcoin may lose one of its most attractive features – anonymity. In addition, Elon Musk regularly comments on the cryptocurrency, causing an increase in volatility in the markets.

In general, we believe that at current prices, bitcoin is no longer particularly attractive for investors. Now the market will wait for bitcoin to sink even lower, so they can buy it at the lowest prices. And it may sink further to $10,000 per coin. Recall that after the strong trends of 2013 and 2017, the quotes inevitably fell by 80-90%, which will most likely be the same at present.



In technical terms, bitcoin attempted to quickly and abruptly resume its upward movement after a strong fall, but now it is already clear that there are much fewer buyers on the market than sellers, and the notorious institutions themselves are in no hurry to invest in "digital gold". Trading currently takes place around $ 34,000 per coin. And soon, BTC quotes may drop back to the level of $30,500, where the fate of bitcoin for the coming weeks or months will be decided.




Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

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Elliott wave analysis of Bitcoin for Maj 31, 2021



Bitcoin peaked in wave 3 with the test of 64,895 and the ongoing correction is wave 4, which ideally will complete near the 61.8% corrective target seen at 27,169 just to be followed by a new strong impulsive rally in wave 3 towards 91,780 as the ideal target for wave 5 of III. It's possible that wave 5 of III becomes an extension and in this case we will be looking for a rally towards 129,919.

However for now we should stay focused on wave 4 of III that still has a bit more downside to cover before it's complete and wave 5 is ready to take over.


Trading recommendation:
Buy Bitcoin close to 27,169 for the next strong rally towards 91,780 and maybe even higher.




Torben Melsted
Analytical expert
InstaForex Group © 2007-2021

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BTC analysis for May 31,.2021 - Potential for the rally towards $40.200

Technical analysis:



BTC has been trading upside in recent 10 hours, which is good sign of upside momentum.


Trading recommendation:
Watch for potential buying opportunities on the pullbacks with the downside targets at $40.000 and $43.100.

Stochastic oscillator is showing fresh bull cross and potential for the rally towards $40.000.





Petar Jacimovic
Analytical expert
InstaForex Group © 2007-2021

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Investors can earn as much as 7% yearly in USDC



Stablecoins, such as the USD Coin (USDC), are gaining more and more attention. Their popularity is further fueled by the engaging statements from Circle Internet Financial Ltd., one of the leading companies in the crypto world and the one who is behind USDC. According to Circle, investors can earn as much as 7% yearly in USDC, which is ten times higher than the profit on a 1-year Treasury bill. Obviously, such an offer is very attractive to investors, especially to those who are enraptured with the big gains in the crypto market. Aside from that, Tether (USDT) and USD Coin (USDC) are more stable than other cryptocurrencies who are prone to strong price fluctuations.



John Griffin, a professor at the University of Texas, likened investments in Stablecoins as putting money in a bank.

Circle's program works as follows: when investors open a "digital-dollar account", the money will be converted into USDC and interest is paid in US DC. Returns are generated by Circle lending digital dollars to a network of institutional investors who are willing to pay the interest rate for access to additional funds.

Circle CEO Jeremy Allaire said the service will be available first in the United States and Switzerland.

Other Stablecoin providers are posting similar offers. On May 26, Gemini announced that investors can get up to 7.4% profit yearly through a program called Gemini Earn. The Gemini token is also pegged to the dollar, and its reserves are held with State Street Bank and Trust, the largest financial custodian in the world.





Andrey Shevchenko
Analytical expert
InstaForex Group © 2007-2021

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Litecoin Reversal Far From Being Confirmed!

LTC/USD moves sideways in the short term trying to accumulate more energy before developing a bullish reversal. The pressure remains high that's why we still have to wait for confirmation before jumping into a long position.

The price rallies at the moment of writing approaching strong and critical resistance levels. Only a valid breakout above these levels could really indicate a potential broader growth. LTC/USD could increase further if the price of Bitcoin increases.


LTC/USD SYMMETRICAL TRIANGLE!


Litecoin moves within a symmetrical triangle, an upside breakout could indicate more gains. The price has taken out the resistance represented by the downtrend line and now is traded at 184.61 above the weekly pivot point (173.20).

The bias remains bearish as long as it stays under the downside 50% Fibonacci line and below the triangle's resistance. A valid downside breakout from this triangle could signal a new drop towards the S1 (137.40) and down to the descending pitchfork's lower median line (LML).


LITECOIN OUTLOOK!
LTC/USD could increase in the short term after failing to reach and retest the weekly S1. Closing above 181.20 former high could signal a further growth towards the 50% Fibonacci line, around the $200 psychological level.

Jumping, closing, and stabilizing above the R1 (206.51) may announce a larger growth in the coming weeks. Its failure to retest the lower median line (LML) could announce a potential growth towards the median line (ML)





Ralph Shedler
Analytical expert
InstaForex Group © 2007-2021

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Ether will surpass Bitcoin soon

There has been growing talk in the cryptocurrency community recently about the capitalization of ether and bitcoin. Many altcoin supporters say that it will surpass the world's first cryptocurrency, and there are a number of reasons for this, which we will discuss in this article. Indeed, demand for ether is gradually increasing, while confidence in bitcoin has been undermined among investors since the largest market drop in May this year.

The relative stability of ether in the overall cryptocurrency flow has once again drawn attention to the idea that the second-largest digital token could one day overtake bitcoin in market value. Bitcoin is currently more than twice the size of ether, but the gap has narrowed by about $350 billion after the biggest sell-off seen in the middle of this month. While bitcoin showed the worst drop in its history, the sale of ether was not as large as many feared. This suggests that investors are seriously reviewing their attitude to this trading instrument, especially given its recent growth.

Fans of the ether refer to the popularity of the altcoin and its platform for creating decentralized online services based on the blockchain, working on the basis of smart contracts. This platform also gave life to DeFi services. An important advantage is that the ether does not stand still, and constant updates and increasing the efficiency of the network can allow it to become the number one in the field of cryptocurrencies very soon. Innovations are not taken away from the air. Soon, an update is expected that will increase the efficiency of the platform, make it faster and reduce fees.



Ether is likely to surpass bitcoin at some point in the future as it will be better and faster as it is filled with innovation and is of significant interest to developers," said Tegan Kline, co-founder of Edge & Node, a blockchain software company.

Even Cathie Wood, who hasn't quite decided on which side to take along with experts from Goldman Sachs Group Inc., recently also highlighted the potential of ether. In a broader sense, interest in virtual currencies has long gone beyond bitcoin alone, whose share of $1.6 trillion in the total cryptocurrency value has dropped to 42% from about 70% in early 2021.

As I noted above, in a recent Goldman Sachs report, one pundit wrote that bitcoin's pioneering advantage seems fragile, adding that there is a high likelihood that it will eventually lose its crown as the dominant digital store of value in favor of another cryptocurrency, with a higher value. In this regard, ether is the most likely candidate to outperform bitcoin.

Another advantage of ether is that its annual emissions are limited, which allows us to consider it as a store of value. A shortage of ether with a gradual increase in demand will also push prices to new highs.



As for the technical picture of ETH, a clear corridor has been drawn in which the altcoin is trying to consolidate its positions after the largest sale from the level of 4,300. As long as trading is carried out above the level of 2,260, we can talk about the accumulation of positions by large buyers. Their more active actions will become noticeable in the event of a breakout of the resistance of 2,900, which will open a direct road to a maximum of 3,400. If the pressure on ether increases and we see a breakthrough of support at 2,260 again, then most likely, at the level of 1,750 there will be only a temporary stop in ether. More active buyers will postpone their return to the market to the level of 1,540, which I advise you to focus on in the event of a decline in the trading instrument.





Jakub Novak
Analytical expert
InstaForex Group © 2007-2021

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Altcoin market stuck in narrow range amid bitcoin problems and central bank criticism: forecasts

The cryptocurrency market experienced another drop in bitcoin quotes last week, which dragged all the altcoins with it. Over the weekend, the situation again managed to stabilize, the players began to buy back the fall in crypto asset quotes, but in general, the situation has not changed. Major coins continue to fluctuate in their individual ranges, showing no real growth. This is indirectly evidenced by the total capitalization of the crypto market, which again rolled back to the level of $1.68 trillion.

Despite the upcoming network update and great appeal, ethereum is also stuck in the range of $2,200-$2,600. The cryptocurrency is testing the $2,585 mark from time to time, but it has never risen higher over the past few days. Judging by the horizontal charts, the ETH/USD indicators are close to this mark and, given the negative feedback from China, they can overcome it. With this development, ethereum can reach the figure of $2,800, where, having consolidated, the price can storm the mark of $3,000. This scenario is quite likely, taking into account several reasons. First, the narrow dynamics of price changes remain positive (+2%), which indicates greater support for the bulls, which outperform the bears. Secondly, the main altcoin is one of the few assets that can show a movement that differs from the general mood of the market due to its own advantages. At the same time, it is possible that ETH will not be able to gain a foothold above the $2,600 mark. In this case, the cryptocurrency will continue to fluctuate in the conditioned range of $2,200-$2,600, waiting for the momentum and accumulation of critical volume to overcome the psychological threshold.



The Ripple token is also close to overcoming an important milestone. The cryptocurrency again crossed the $1 mark, having risen in price by 14% per day. At the same time, daily trading volumes fell to $5 billion, which can be attributed to the general decline in interest in the cryptocurrency market. In the coming days, the token will continue to move upward and try to reach the $1.2 mark, from where it can move to the more difficult $1.4 mark. However, such a scenario can only take place if the news background is relatively calm. The increased volatility of bitcoin and the entire market contributes to a very painful reaction to any manifestations of negativity. In this case, XRP/USD indicators may retest the support level around $1.



Litecoin indicators are stuck in the swamp of their own insolvency. The cryptocurrency is quoted at around $184, having risen in price by 2% over the day. Despite the positive dynamics of price changes over the past few hours, the only reason for altcoin's optimism is the acceptable price for the entry of new players. In the coming days, the cryptocurrency will try to get to $200, but there are no prerequisites for the fact that the asset will be able to break through a difficult boundary.



The state of the cryptocurrency market is easily explained by the news background, which has become negative on an ongoing basis. Everyone speaks out about the dangers and problems of crypto assets. For example, the CEO of JPMorgan said that he advises everyone to stay away from operations with digital coins. British bank Starling has temporarily suspended the ability for its customers to transfer deposits to cryptocurrency platforms. And rumors of tighter regulation of coins in the United States sound increasingly threatening. Criticism and isolation of the cryptocurrency market are becoming a trend that, ironically, was launched by Tesla. It was Tesla that first suspended the sale of its products for bitcoins, and also criticized the asset for excessive energy consumption. Based on this, the market will need time to adapt and turn the situation in its favor. This will take some time, and then increased volatility and uncertainty will be the companions of the market in the coming weeks.




Artem Petrenko
Analytical expert
InstaForex Group © 2007-2021