Cryptocurrency Analysis

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Technical analysis of Bitcoin

BITCOIN


May was dominated by the bears, who took a break in the last week of the month. As a result, bitcoin continues to remain in the zone of attraction formed by the accumulation of levels in the region of 37,297 - 35,594 - 34,354 (monthly Tenkan + monthly Kijun + the final line of the weekly cross). The breakdown of the zone and the continuation of the decline will eliminate the weekly golden cross and open the way to the final border of the monthly golden cross of the Ichimoku cloud (27177). If the bulls manage to limit the current downward correction of the higher time frames by the supports achieved, then they will have to restore their positions through the following important resistances - 41,432 (monthly Fibo Kijun + weekly Kijun + daily Fibo Kijun) - 44,615 (daily medium-term trend) - 47,235 (weekly levels + daily Fibo Kijun).



Bulls performed an upward correction on H1 and are currently fighting for the most important levels of 36,000 - 36,215. Work and positioning above the levels, as well as an upward reversal, will give preference to strengthening the mood of the bulls. The resistance of the classic Pivot levels serves as upward benchmarks within the day, these are 37,934 - 39,282 - 41,217. The loss of support for key levels (36,000 - 36,215) and a reliable consolidation below will change the current balance of power in the lower halves in favor of the bears. At the same time, the main task for the bears will be to overcome the supports of the higher halves (35,594 and 34,354).


In the technical analysis of the situation, the following are used:

higher time frames - Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels

H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)





Evangelos Poulakis
Analytical expert
InstaForex Group © 2007-2021

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Trading Signal for BTC/USD (Bitcoin) for June 01 - 02, 2021: Buy above $34,400, Symmetrical triangle



In the early trading hours of the American session, BTC / USD (Bitcoin) is trading within the symmetrical triangle according to a 4-hour chart, showing a consolidation signal after the fall in May to nearly $30,000. Now we notice that BTC is ready to challenge again the psychological level of $50,000.

On the other hand, Nikolaos Panigirtzoglou, JPMorgan strategist and Bitcoin expert said: The longer-term signal remains problematic as it has not yet shortened. Price drops to the $26,000 level would still be needed before the longer-term momentum.

In the medium term, Panigirtzoglou sees a fair value for Bitcoin in the range of $24,000 to $36,000. Analysts believe that the May crash in Bitcoin has severely weakened institutional demand, which is likely to keep prices at this level for now.

In view of these discouraging factors for BTC, from a technical point of view, we expect the $ 30,000 floor, confirmed by a double bottom, to give support for BTC to stay above this level. On this condition, the crypto asset will be able to break again the downward pressure zone of $50,000 and thus reach the goal of $75,000 by the end of the year.

Our recommendation is to continue buying BTC, if it makes a technical bounce at the 21 SMA or the bullish line of the triangle, around $34,555. Provided that it breaks and consolidates above the symmetrical triangle, we can buy BTC with targets at the 200 EMA at around of $46,946.


Support and Resistance Levels for June 01 – 02, 2021
Resistance (3) 40,059
Resistance (2) 39,282
Resistance (1) 37,934

Support (1) 34,652
Support (2) 32,551
Support (3) 31,369




Dimitrios Zappas
Analytical expert
InstaForex Group © 2007-2021

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Cryptocurrency market analysis on June 1, 2021



The wave counting of the 4-hour chart of bitcoin still suggests an increase in quotes. After the cryptocurrency quotes fell by more than $30,000, two upward waves were already built. Thus, I assume that at this time, the construction of a new three-wave structure has begun, where waves a and b are already present. If this is true, then the increase in prices will continue with the current levels in the framework of the assumed wave c with the targets, positioned above the expected peak of wave a. That is, above the $42,000 mark. However, at the moment, bitcoin quotes are moving up with great difficulty. Affected by the lack of a good news background, which has always been of great importance for the cryptocurrency. Thus, I consider an alternative option to build tools of complex corrective structures, which will be horizontal or close to such. It is already clear that the instrument is in a triangle, which means a very limited range of movements of the main cryptocurrency.

The news background for bitcoin remains rather negative. There is, of course, news that inspires a little optimism in the hearts, but there are really few of them. Recent major news has come from China and the United States, where the authorities have set out to severely restrict mining and uncontrolled operations with bitcoin and other cryptocurrencies, which greatly reduces the demand for the asset. I believe that it is this news that prevents bitcoin from developing at least a corrective increase within the wave counting presented above. However, for example, in Argentina, there has recently been an increase in mining capacity and, in fact, an increase in the number of miners themselves. Inflation in Argentina is very high, reaching 50% per year. Thus, the national currency depreciates almost twice every year, as well as the savings of the country's residents. In search of protection from inflation and taking advantage of low electricity prices, local residents began to actively buy mining equipment and mine bitcoin, since even the latest drop in its quotes still makes it very profitable to mine and then sell it.

It should also be noted that Argentina has a law that prohibits local residents from buying foreign currency in large quantities. Thus, the population does not have the opportunity to protect themselves from inflation by buying a more stable currency. Therefore, bitcoin and other cryptocurrencies for them are really a good way to make money and partly win back the depreciation of the local currency. However, one positive news from Argentina is clearly not enough for bitcoin to continue its growth. Recently, many central banks have issued statements warning investors that they could lose everything on bitcoin transactions. The cryptocurrency itself was also sharply criticized, which is overly volatile and speculative, and is also rarely used for its intended purpose, that is, as a means of payment.

Based on the analysis, I believe that the three downward wave structure is complete. The current wave counting indicates a possible rise within wave c, I continue to recommend buying bitcoin for each MACD upward signal with targets located around $42,500. An unsuccessful attempt to break through the 61.8% Fibonacci level could lead to a new decline in bitcoin, but I more hope that in the coming year, the cryptocurrency will build complex corrective structures and will not resume the upward trend.





Chin Zhao
Analytical expert
InstaForex Group © 2007-2021

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XRP gives its first signs of strength

XRP has broken out of the short-term bearish channel and is now challenging once again the major short-term resistance area of $1.06. As long as price is below this level there is still danger of moving lower towards $0.65.



Red lines- bearish channel

Blue lines- Fibonacci retracements

Red rectangle- resistance

XRP/USD has reversed at the 61.8% Fibonacci retracement and bulls are now trying to break above key short-term resistance depicted by the red rectangle area. Breaking above $1.06 will open the way for a push higher towards $1.20 at first and maybe towards $1.45. Support at $0.78 is key. Breaking below it will open the way for a move towards $0.65.





Alexandros Yfantis
Analytical expert
InstaForex Group © 2007-2021

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Miners reduce bitcoin mining volumes



Over the past day, bitcoin has shown a desire to rise in price, but it ended the day with a minimal gain of only $500. For Bitcoin, a movement of $500 in any direction is the same as a cryptocurrency standing still. Thus, at the moment the quotes have failed to correct against the last round of the fall, even by 38.2%. From our point of view, this indicates a very weak interest in bitcoin at this time among all market participants. That is, despite the fact that many crypto experts talk about the attractive price values of bitcoin, no one is in a hurry to buy it again. Therefore, the trades continue to take place around the levels of $36-37 thousand per coin.

Meanwhile, it became known that the hash rate of the Bitcoin network continues to fall. This means that the computing power spent on mining coins is reduced. Simply put, there are fewer active mining equipment that are currently working on bitcoin mining. This was last seen in China's Xinjiang province, when there were several accidents in coal mines, which resulted in power outages, due to which many mining farms did not work. But now, there are no problems with electricity in the largest mining areas, and the hash rate all falls equally. This suggests that a certain part of the miners have stopped mining bitcoin at this time (perhaps switched to other cryptocurrencies). As of May 30, the hash rate dropped to 124 EH/s, and on May 13 it was 171 EH/s. Experts note that miners incur various kinds of costs, including electricity costs, room rent, equipment cooling and maintenance. Thus, if bitcoin drops in price greatly, it becomes unprofitable to mine it. Therefore, some miners can really switch to other digital assets or simply turn off their equipment until better times. It should also be noted that due to the desire of the Chinese authorities to ban mining and seriously tighten the rules for regulating the cryptocurrency sector, many miners and financial platforms began to leave China. Naturally, they will need some time to transport equipment to another country, to connect everything, configure and start up again. Thus, the drop in the hash rate of the bitcoin network is partly due to innovations in China, which forced the miners to "close the shop". In theory, Bitcoin can resume growth when most of the miners leave China and settle in other countries. But the point is also that the mining of miners by itself does not greatly affect the bitcoin rate. The question is, after all, what part of the production the miners sell, and what they keep for themselves, in anticipation of a more attractive rate.



In technical terms, bitcoin made an attempt 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 are in no hurry to invest in "digital gold". Moreover, there is now an outflow of miners from the bitcoin network. Thus, we still believe that bitcoin has a much better chance of a new fall than a resumption of growth. If bitcoin quotes manage to gain a foothold above the 38.2% Fibonacci level - $41,000, then this will slightly increase the likelihood of further growth in digital gold, but traders still need to get to this level.





Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

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Ethereum Exhausted Again!

Ethereum is dropping right now after failing to approach the immediate resistance levels. It could drop to test and retest the immediate support levels before jumping higher again. The selling pressure remains high in the short term despite the most recent bounce.

Bitcoin is under pressure as well, so a further drop registered by BTC/USD could force the altcoins to decline. Technically, a temporary decline could help us to catch a new upwards momentum.

The bias is bullish in the short term, despite the current decline. An upside breakout through the immediate obstacles could bring new opportunities.


ETH/USD TEMPORARY DECLINE?


Ethereum failed to reach the 50% Fibonacci level and the weekly R1 (2,842.67) in the current attempt signaling a potential decline towards the weekly pivot (2,461.20).

The price action develops a triangle pattern. A valid breakout from this pattern may bring us a great trading opportunity. An upside breakout could really announce a bullish reversal, a strong swing higher in the coming period.


ETHEREUM OUTLOOK!
A false breakdown with great separation through the weekly pivot point (2,466.09) or below the uptrend line could bring a new buying opportunity. Also, a major bullish engulfing printed on these levels could signal a bullish momentum.

A great buying opportunity could be signaled by an upside valid breakout from the current triangle, through the R1 (2,842.67), and most importantly, above the 3,000 psychological level.

The upside scenario could be invalidated by a drop and stabilization below the immediate uptrend line.





Ralph Shedler
Analytical expert
InstaForex Group © 2007-2021

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Bitcoin: the main reason for the collapse and the chances of recovery

Bitcoin continues to consolidate, and the technical picture on the daily chart has not changed significantly compared to yesterday. Therefore, the forecast given on Monday has not lost its relevance.

But on the 4-hour time frame, the technical picture looks more interesting, giving information for thought. But we will look at it a little later.

In the meantime, it is worth dwelling on the reason for the recent collapse of the cryptocurrency market. Yes, we know that these were Tesla's claims to bitcoin because of its non-environmental nature, the ban of China. But few people talk about the third reason, which was probably the main one. And the above news factors are just triggers.

After the collapse of the market, opinions about the leverage factor occasionally and timidly slipped in the statements of experts. But today, another article showed that this topic still deserves attention.

Many experts cite leverage as one of the reasons for the collapse of bitcoin. It was those who bought digital coins using margin conditions that started liquidating positions after receiving negative news. It was as if they were swept away by the wave of the fall. And it was repeatedly mentioned earlier that it was speculators, not holders, who left the market.

In particular, one of those who cited this reason was the host of the podcast "The Wolf of All Streets", Scott Melker.

"Of course, there was a big cycle of negative news, but cycles of negative news always seem to kick in when the system gets off the hook," Melker said.

"At a BTC price of between $60,000 and $50,000, we saw liquidations on exchanges of nearly $10 billion, which at the time was about three times more than any previous liquidation. Then from $40,000 to $30,000, we saw another $10 billion [in liquidation] before the price went back to about $40,000. In total, this is about 800,000 traders who completely liquidate their accounts," he added.

But if leverage was the main reason for the Bitcoin market crash, then in May it was not mentioned in the conversation about the BTC drop. "Leverage was dropped from the conversation because it is the real answer. But nobody wants you to have a real answer," said Melker.

As for the other news, Melker believes that there was nothing really "new" about it. The same China "banned" bitcoin repeatedly, but this time the market collapsed.

Going back to the graph, which is the 4-hour time frame, after the market crash, recovery occurs, forming an equilateral triangle. It is an ambiguous figure in terms of direction. But the exit from it usually occurs impulsively.

If its upper side is broken, then, given the technical potential of development, BTC/USD will most likely be able to overcome the resistance of 41,980.24 and gain a foothold higher. If quotes break through the lower border of the triangle, the downside potential will send BTC/USD to support at 28,392.99.

As you can see, at least a double bottom, a triangle, local targets for bitcoin, and a wide frame of the range 28,392.99 - 41,980.24 remain unchanged at present.







Ekaterina Kiseleva
Analytical expert
InstaForex Group © 2007-2021

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Technical Analysis of ETH/USD for June 2, 2021

Crypto Industry News:
According to the May 31 report, there has been a significant increase in the use of OTC platforms since China announced its position on bitcoin mining and tightened restrictions on financial institutions and payment operators in the context of providing cryptocurrency services.

Exact volume figures are difficult to establish as Chinese OTC transactions are made on a peer-to-peer basis and use third party payment platforms. However, the exchange rate between the Chinese Yuan and the popular Tether stablecoin (USDT) is seen as a key measure of sentiment in the local cryptocurrency market - as demand for USDT increases during market downturns.

The USDT / CNY exchange rate fell by as much as 4.4% after the Communist Party's announcements, although since then it has recovered more than half of the losses. The recovery suggests that as markets began to consolidate, the peak of sales may have passed.

One of the fears driving China's tightening stance on cryptocurrencies seems to be capital outflows from stock exchanges. Bloomberg speculates that over-the-counter trading may not carry the same risk of losing capital as conventional exchanges. It has been suggested that regulators may not be so strict when dealing with this sector.


Technical Market Outlook:
The ETH/USD pair has broken through the upper channel line around the level of $2,505 and tested the local technical resistance seen at $2,638. The new local high during this move up was made at the level of $2,594. Nevertheless, as long as the price is still under the level of $2,914, 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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Technical Analysis of BTC/USD for June 2, 2021

Crypto Industry News:
Blockchain Bitcoin charges a fee for each transaction and distributes the proceeds to the miners. Charges increase when the demand for transaction processing exceeds the miners supply. On April 21, average fees hit a record high of $ 62.8 per transaction.

Conversely, charges go down when mining supply exceeds demand. The drop in fees suggests that bitcoiners are not as keen on trading as they were just over a month ago.

This could have something to do with the recent crash in the cryptocurrency markets, which saw the price of BTC drop from $ 60,000 to $ 36,000 in just a few weeks.

Bitcoin miners also seem to be less interested in processing transactions anymore. Mining difficulty - the amount of computing power needed to verify transactions in the network - fell by 16% on Sunday. This is the biggest drop in over a year. Mining bitcoin becomes easier as the overall computing power supporting the blockchain decreases.

Due to the overall cooling of the cryptocurrency market, fees on the Ethereum network have also dropped. According to CoinGecko data, global cryptocurrency market capitalization has fallen from last month's high of around $ 2 trillion to the current level of $ 1.6 trillion.

Lower prices, fees, and mining power appear to follow from government efforts to mine bitcoin in China, where most miners are based. The cryptocurrency exchanges Huobi and OKEx have already begun to restrict some transactions, and officials in Inner Mongolia are considering banning BTC mining altogether.


Technical Market Outlook:
The BTC/USD pair volatility has decreased significantly, but the bulls are climbing higher step by step. The momentum is still hovering around the neutral level of 50, but is not dropping lower and the price is still seen around the short-term trend line resistance. 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.

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

[IFX_Selena]

Some investors sell bitcoin at a loss



While bitcoin is trading ambiguously around $36,000 per coin, various studies show that institutional investors have severely lowered their level of interest in bitcoin, miners stop mining until better times, and retail short-term investors are selling bitcoin, as they do not believe in its growth in the near future. We have said several times before that small traders and investors are focused on quick profits and cannot afford to keep Bitcoin on their balance for years. Thus, now, when it became clear that the "bullish" trend is over and it will not recover soon, retail traders have begun to get rid of Bitcoin at any cost, sometimes at a loss. The corresponding technical indicators allow us to draw just such a conclusion. Despite the fact that retail traders do not own a large number of coins, there are a lot of them, therefore, in aggregate, they may have even more coins than institutional ones. This suggests that retail investors continue to have a significant impact on the bitcoin price. Plus, one should not forget that most of the coins (according to research) lie dead weight on their wallets. Out of the 19 million mined coins, about 15 practically do not move, so there are about 4 million coins in circulation. Thus, even any large sale or purchase of several thousand coins can lead to a serious change in the course. What can we say about those periods when the markets began to get rid of bitcoin en masse? Even the sale of 100,000 coins may be enough for the rate to drop by $10,000 or more. Also, many experts believe that not only bitcoin, but the entire cryptocurrency market will continue to fall, which is also not surprising at all. Despite the fact that the bitcoin dominance index has seriously decreased recently, it still continues to have a strong influence on the entire market and continues to pull its "counterparts" along with it. Thus, if we remove from the field of view all the forecasts of "experts" who are already expecting $100,000 per coin and more in 2021, then reality shows that bitcoin is waiting for a long period of consolidation and, possibly, a new fall.



Technically, bitcoin on a 4-hour timeframe not only failed to overcome the Ichimoku cloud, but also went into a kind of flat. In addition, we managed to form two trend lines at once, which squeezed bitcoin between themselves. Thus, in the near future the "spring" may straighten and the market will move with renewed vigor in one direction. The only question is, which one? If there is a breakdown of the lower trend line, the chances of a further fall will increase, at least to the level of $30,500. If the upper trendline is crossed, bitcoin will try to recover to the level of $43,852.




Paolo Greco
Analytical expert
InstaForex Group © 2007-2021