Cryptocurrency Analysis

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India to criminalize bitcoin ownership. Central Bank of Norway urges its citizens not to join bitcoin hype



The number one cryptocurrency in the world has started a new round of correction, and, from our point of view, this round was logical and should be stronger than the previous ones. The problem for bitcoin right now is that the fundamental background for this cryptocurrency has deteriorated dramatically. If in January-February, market participants were ready to carry money to cryptocurrency exchanges to buy any number of coins simply because Elon Musk or Tesla does so, now many investors believe that bitcoin is already too expensive to buy at current levels. As we have already said, no asset can rise in price forever. And such an asset as bitcoin may well fall by 80-90 percent at any time. So why buy it now at $55,000-$60,000 per coin, if you can wait for the next drop and buy it much cheaper?

This may be the logic of large investors and institutions. Moreover, it was reported last week that miners no longer believe in further growth of the bitcoin in the current cycle and are ready to get rid of their stocks. As we said earlier, the sale/purchase of a relatively small number of coins (up to 10,000) can cause a 1% change in the exchange rate. Thus, if all the miners rush to sell bitcoin, the rate can sink very seriously. Moreover, the fall of bitcoin will cause a chain reaction in the markets and a "domino effect". Small traders and investors will definitely start to immediately get rid of their stocks, fearing to lose profits. Only institutions and large investors who can afford to keep bitcoin in their portfolios for many years can resist its fall.

Meanwhile, authorities in India want to completely ban the mining, storage, transfer, and trading of digital currencies. According to Reuters, a bill is already under development that would criminalize all of the above transactions with bitcoin or its counterparts. If this bill is passed (and there is no doubt about it), then all owners of cryptocurrencies will receive about 6 months to liquidate their assets. Thus, India may become the first country with a large economy to completely ban the circulation and storage of cryptocurrencies. However, many experts have already stated that this will not affect the owners of cryptocurrencies themselves because a piece of code can be stored anywhere, and how the Indian government is going to track the movement of bitcoins and interpret the transfers of "digital money" in foreign accounts is not yet clear. The main thing is that some countries are slowly beginning to declare war on bitcoin.

At the same time, the governor of the Central Bank of Norway, Oystein Olsen, said that bitcoin is "too unstable and expensive", and also urged the people of Norway not to use bitcoin as a means of storage and payment. Olsen does not believe that digital money can displace fiat money, which is controlled by central banks. "The main task of the central bank, as well as its currency, is to ensure the stability of money and the system, and bitcoin does not perform these functions," Olsen said in an interview with Bloomberg. Also, the governor does not believe that bitcoin will pose a threat to central banks.




Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Bitcoin pulls back towards $50,000.

In our recent posts about Bitcoin we warned bulls to be very cautious despite the new all time highs. Price was making new higher highs but the RSI did not. This was a clear warning for bulls that the momentum was weakening. In a previous analysis on Bitcoin we also mentioned that as long as price was trading above $56,000 short-term trend would remain bullish and that price should not break out of the bullish channel.



Blue upward sloping lines - bullish short-term channel

blue line - bearish divergence

BTC/USD has broken out of the bullish short-term channel. Bulls were warned. Price is now making lower lows and lower highs as it approaches the $50,000 level. Here we find the first short-term support area and next at $43,000.



Blue line - bearish divergence

In the Daily chart above we can clearly see the bearish divergence by the RSI as price was making higher highs. Bulls need to be very cautious as we might see a bigger than normal correction in cryptocurrencies over the next couple of months. Price has broken the lower red trend line and is vulnerable to reaching the $43,000-$45,000 level. Major Fibonacci support is at the 38% level or $39,850. Buying dips currently might be very risky as we could be at the beginning of a bigger correction. Traders need to be cautious and patient for a bottom to be formed and a reversal confirmed, before calling a low.




Alexandros Yfantis
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Ethereum breaks below $1,600 approaching our first target

Ethereum has broken below the support neck line of $1,700 and as we mentioned in our last analysis, price was back testing the break down area. A rejection off the resistance of $1,700 that was once support, would lead to a new lower low and eventually towards $1,500.



Green line - trend line support (broken)

Red line- resistance

Red rectangle - neckline support

Blue lines - expected size of decline if price breaks neckline

ETH/USD is trading at $1,568 and short-term trend is bearish. The first warning signal to bulls came when price broke the upward sloping green trend line. The second warning signal and most important bearish signal so far came when price broke below $1,720-$1,700 support area. Then we gave $1,500 as short-term target. Yesterday price back tested the resistance that was once support and is moving lower towards our first target. So far price has fallen as low as $1,544. If that level is broken, we should expect Ethereum to continue lower towards $1,500 and $1,430. Resistance at $1,700 remains key for the short-term trend. As long as we trade below it, price is vulnerable.





Alexandros Yfantis
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

BTC analysis for March 25,.2021 - Strong selling pressure and potential for test of $47.500

Further Development



Analyzing the current trading chart of BTC, I found that sellers entered stronlgy on the last rally as I warned yesterday, I still see downside movement towards $47.500.My advice is to watch for selling opportunities on the rallies with the downside target at the price of $47.500.I see no any sign of reversal, which is another indication for the further downside continuation.


Key Levels:

Resistance: $53.150

Support level: $47.500




Petar Jacimovic
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Trading plan for Bitcoin for March 25, 2021



Technical outlook:

Bitcoin bulls might be back after printing lows around $51,500 mark today, and are looking poised to push higher above $61,780 mark to complete the overall trend that had begun since $3,850 lows in March 2020. Probability of another high remains until prices stay above $43,000 lows, but please kindly note that the crypto might produce a meaningful corrective drop thereafter.

Bitcoin is seen to be trading at day's high around $52,700 levels at this point in writing as bulls remain poised to push higher above $61,780 in the near term. Also note that a sideways consolidation between $45,000 and $55,000 remains possible before breaking higher. Immediate support comes in at $43,000 mark, while resistance is intact around $62,000 levels respectively.

The larger trend from $3,850 lows registered in March 2020 might be close to terminating/completing with one more high above $61,780 levels. A pullback thereafter could drag prices back towards $40,000/42,000 levels before resuming the uptrend. If prices drop below $43,000 from here, the next support is seen towards $37,000 levels, going forward.


Trading plan:

Remain long with stop @ $43,000, target above $62000.

Good luck!




Oscar Ton
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

The new hype from Tesla did not help Bitcoin



What happened today is what we personally expected in the last week. Bitcoin has started a new round of corrective movement and has worked out the critical Kijun-sen line, which lies at the level of $52,300. It is believed that the $52,300 support is the first important support on bitcoin's way down. If the bulls fail to keep the "digital gold" above this level, the quotes will most likely fall to the second support area, which is located near the levels of $43,000 and $44,000. As we have already drawn the attention of traders in our recent articles, each subsequent upward momentum of bitcoin was weaker than the previous one. This suggests that the upward trend is either completed or nearing completion. It has already been mentioned that the year of the upward trend for bitcoin is a lot. Previously, the cryptocurrency did not show any longer upward trends, ergo, it is quite possible that the time has come to start the fall.

Bear in mind that the value of bitcoin is determined only by the faith of investors and traders in it. As long as the participants of the cryptocurrency market believe that bitcoin will continue to grow, they buy it, and this provokes growth. But when the markets start to think that there will be no further growth, they begin to slowly get rid of it, which naturally provokes a drop in quotes. Many cryptocurrency experts try to support the demand for bitcoin using various tricks, and sometimes outright misinformation. It has previously been mentioned that if a person owns bitcoin for an amount exceeding a million dollars, then that person's forecasts about the growth of the value of bitcoin to $100,000 per coin or to $1,000,000 per coin can be safely ignored. It is simply because this person is interested in making the cryptocurrency continue to rise in price. Given recent research, moving just 10,000 coins can cause the value of a bitcoin to rise or fall by 1%. This means that the bitcoin exchange rate does not need much to show a strong fall or growth. Therefore, all crypto millionaires and billionaires are naturally interested in keeping the hype as long as possible and try to maintain it informatively as long as possible.

This is roughly what Elon Musk has been doing in recent weeks and months, who had previously been fined by the US Securities and Stock Market Commission for comments that he had no right to voice. But Musk was not intimidated by this story, and in 2021, he continued to comment. However, it is no longer Tesla shares, but bitcoin, simultaneously investing money in it. The latest information came from Tesla, which introduced the ability to buy its electric cars using bitcoins and immediately announced that it was not going to transfer cryptocurrency to fiat immediately after each transaction. At the same time, it is difficult to believe that this statement is honest and frank. If bitcoin starts to fall, everyone will transfer the cryptocurrency to fiat as quickly as possible to avoid monetary losses. This time, the markets responded with purchases of bitcoin against the background of the news from Tesla, but they did not last very long. Today, it is necessary to keep an eye on the level of $52,300. Its overcoming will mean the preparedness of the markets for new sales of BTC to the levels of $43,000-44,000 per coin.




Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Bitcoin Decline Expected!

Bitcoin shows exhausted signals in the short term. Its drop under the immediate uptrend line signals that BTC/USD could develop a corrective phase. Technically, the price was somehow expected to decline after failing to approach and reach the 61,788 all-time high.

You should know that Bitcoin's potential drop may bring sharp declines on altcoins as well. A corrective phase on BTC/USD could be natural and normal after the major upwards movement.

The current decline, retreat, could help the buyers go long on Bitcoin again. Most likely we'll have a great buying opportunity after this drop.


BTC/USD CORRECTION PHASE SIGNALED


BTC/USD plunged through the uptrend line and below 53,221 static support after a new rejection from the descending pitchfork's upper median line (uml). The price increased a little to test the Pivot Point (57,045) and the upper median line (uml) before dropping deeper.

Technically, the price was expected to decline after several false breakouts through the upper median line (uml). The current breakdown through the uptrend line and below 53,221 triangle's support announces more declines ahead.

It is trapped within a minor down channel between the upper median line (uml) and the upside 50% Fibonacci line, so it could move and approach fresh new lows as long as it stays inside of this pattern.

Bitcoin may register a sharp drop, sell-off if it drops and stabilizes under the 50% Fibonacci line, and below the S2 (49,685). This scenario could lead the price towards the median line (ml) or lower to 41,986.


BITCOIN FORECAST!

The current breakdown through S1, 53,221, and below the uptrend line represents a selling opportunity with the first target at S2 (49,685).





Ralph Shedler
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Technical Analysis of ETH/USD for March 25, 2021

Crypto Industry News:
Ethereum co-founder Vitalik Buterin believes that NFT can be applied to socially important purposes such as charities and public goods funding, but not when the technology is still seen as "a largely profitable casino anyway. wealthy celebrities. "

The manifesto author Ethereum said helping celebrities like Elon Musk to increase their bank balance by another million dollars through the NFT had little social value. However, he believes that with the right level of support and coordination, non-exchangeable tokens can have a significant impact on other areas of society.

In a blog post titled "The Most Important Scarce Resource is Legitimacy," Buterin stated that public attention and resources are often allocated to whatever most people consider legitimate. It's a game theory term that Buterin defines as:

"Higher order acceptance pattern. An outcome in some social context is legitimate if people in that social context widely accept and play their part in making that outcome a reality, and each person does it because he expects everyone else to do the same. "

In short, people act in a coordinated manner if they perceive that everyone else will do the same, and especially if it brings them personal benefit. The NFT market, which has hit half a billion dollars in the past few months alone, is also influenced by the ever-changing forces of mass public perception.

"Which NFTs are attractive to buy and which are not is a matter of legitimacy," wrote Buterin.


Technical Market Outlook:
The ETH/USD pair has broken out of the short-term descending channel and hit the level of 61% Fibonacci retracement of the last wave up located at $1,541. The next target for bears is seen at the level of $1,455 and $1,438. The weak and negative momentum confirms the short-term bearish outlook for ETH. Only a strong breakout back above $1,648 and then above $1,729 would terminate the sell-off and put the bulls back into control again.

Weekly Pivot Points:
WR3 - $2,051
WR2 - $1,965
WR1 - $1,890

Weekly Pivot - $1,807
WS1 - $1,707
WS2 - $1,636
WS3 - $1,545


Trading Recommendations:
The longer term up trend on the Ethereum continues despite the local counter-trend corrections. When the correction is terminated, the next long term target for ETH/USD is seen at the level of $2,100. The key long term technical support is seen at the level of $1,412, so only a weekly candle close below this level will invalidate the bullish scenario.






Sebastian Seliga
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Technical Analysis of BTC/USD for March 25, 2021

Crypto Industry News:
E-car maker Tesla has begun to accept bitcoin, according to information released yesterday on Twitter by Elon Musk. This is a new milestone in the cryptocurrency adoption process.

"Tesla only uses internal and open source software and supports Bitcoin nodes directly," added Musk in another reply. "Bitcoin paid to Tesla will be kept as bitcoin, not converted to fiat currency."

The tweets appeared shortly after some Twitter users began noticing bitcoin support as a payment option in the company's US stores for its electric car models.

Musk commented that bitcoin payment is available in the US for now. "Bitcoin payment option available outside the United States later this year," he added.

You can now buy models from the manufacturer's extensive electric vehicle fleet (Model S, Model Y, Model 3 and Model X) with BTC.


Technical Market Outlook:
The BTC/USD pair has hit the 61% Fibonacci retracement located at the level of $52,213 and made a new local low at the level of $51,451 (at the time of writing the article). If bulls want to rally above the short-term trend line resistance seen around the level of $58,223, they need to break through the levels of $53,290, $54,012 and $55,810 first. The momentum is now weak and negative, which supports the short-term bearish outlook. The longer term trend is still up and intact and any breakout above trend line will be considered as bullish with a target at $60,000 and above.

Weekly Pivot Points:
WR3 - $68,853
WR2 - $64,700
WR1 - $61,327

Weekly Pivot - $57,323
WS1 - $54,318
WS2 - $49,983
WS3 - $46,876


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 $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 $41,125 is clearly broken on the e daily time frame chart.






Sebastian Seliga
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

What helped Bitcoin - the level or Elon Musk?

Only the lazy people did not write today as Elon Musk announced the possibility of buying Tesla electric cars for bitcoins. Indeed, the hype news supported the main cryptocurrency, but we should look deeper here.

For short-term forecasts and trading positions, technical analysis remains the best tool in any market. Quotes are pushed by large players and the appearance of strong price levels on the charts indicates that they are defending their positions. For mere mortals or small speculators, these observations allow you to see both the entry point to the transaction and to assume the direction of the price.

Well, let's look at the chart. In yesterday's review, it was noted that bitcoin has reached the level of support for the upward trend 29241,46 - 43033,38 - 58340,66 from January 27. And today, it quite technically bounced up from it. This means that the upward trend is not broken and the main cryptocurrency has a chance to grow.

But let's take a closer look. On the four-hour chart of BTC USD, you can see that there is a horizontal support of 53980.77 (marked with a red dotted line) at the intersection with the upward trend support. This means that the rebound point is a double strong support level, which the big players would still protect from a breakdown. And Elon Musk, with his short-term hype, only gave confidence to buyers.

What's next? From a technical point of view, the BTC USD has a small power reserve to the level of 58340.66 (the maximum from February 21). And there is a resistance line at the local downward trend of 61759,10 - 59869,35 - 53225,61 from March 13. And if this border at the intersection of resistance levels can be overcome, BTC USD will have a chance to return to the historical maximum.



As for the long-term prospects of bitcoin and digital currencies, there are also interesting opinions here. While some central banks are working on their own cryptocurrency, on the contrary, others do not leave skepticism, especially in relation to bitcoin.

So, the manager of Norges Bank, Oystein Olsen from Norway, said that bitcoin will not be able to become a means of payment, because it is very expensive, resource-intensive and unstable.

But the Bank of Norway does not believe that new technologies have potential. Simply, according to the regulator, they are not of much use. At the same time, he continues to work on his own project of the Central Bank's Digital Currency (CBDC). A report on how the development is progressing is due to be released in April.

A representative of the Norwegian regulator noted that users should be able to quickly make payments in Norwegian kroner. At the same time, CBDCs should not affect credit intermediation in the private sector.

In parallel, China is working on the creation of a digital yuan, and the Federal Reserve Bank of Boston (USA) promised to publish the results of its study on the digital dollar in the summer of 2021.




Ekaterina Kiseleva
Analytical expert
InstaForex Group © 2007-2021