Cryptocurrency Analysis

[IFX_Selena]

Trading plan for Bitcoin for July 20, 2021



Technical outlook:
Bitcoin has dropped beyond expectations as it prints $29,500 lows today. The wave structure remains constructive for bulls until prices hold above $28,600 mark, going forward. Bulls might be preparing to come back strong if $28,600 interim low holds well. A counter-trend rally could materialize soon towards $42,000 at least before resuming lower again.

Bitcoin is seen to be trading close to day's lows around $29,600 mark at this point in writing and is expected to find a bottom soon provided prices stays above $28,600 lows. Immediate support is seen around $28,600 mark, while resistance is around $36,000, followed by $42,000 levels respectively. A break above $32,500 would confirm that a meaningful bottom is in place.

Bitcoin has already carved meaningful bearish borders between $65,000 and $28,600 levels earlier. The crypto is expected to produce a corrective rally towards fibonacci 0.382 levels at least, which is seen around $42,000 mark. Bears might come back strong there after and push prices below $28,800 mark.


Trading plan:
Remain long, stop @ 28,000, target @ 42,000

Good luck!






Oscar Ton
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

BTC analysis for July 20,.2021 - Breakout mode in play and potential test of $20.000

Technical Analysis:



BTC has been trading downwards after the breakout of the tight consolidation. I see further downside movement.


Trading recommendation:
Watch for potential sselling opportunities on the rallies and the potential breakout of key support at $28,750.

Next bigger downside target is set at the price of $20,500.

Stochastic is in oversold area but with no evidence of any reversal....





Petar Jacimovic
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

BITCOIN Price Analysis for 20 July

Bitcoin drops below $30,000 as wider risk-off sentiment takes over
50% devaluation leaves investors wary about upside potential



Bitcoin has slumped below $30,000 following a global risk-off move on Monday as Covid-19 concerns are back on the table. BTC/USD had been stuck in a tight range for the month but had taken a slight negative bias over the last few days, leaving it just shy of the 5-month low of $28,843 it printed exactly four weeks ago. This level rests upon the 50% Fibonacci level from the $16,225 to 42,000 surge seen at the end of 2020, which is likely to offer some continued support in the short term.

It seems as though BTC/USD has been unable to pick up any positive momentum and the break below $30,000 could suggest a further pullback towards $20,000 given how the crypto seems to have been moving in $10,000 tranches. That said, I don't think there is a lot of rush in the pullback like we have seen on previous occasions, so it may be the case of small fluctuations that will ultimately bring the pair lower. If so, the 61.8% Fibonacci at $26,070 could be a good area to look out for support if the 50% level is taken out.

The rush to the safety of the US Dollar if risk-aversion continues could be a significant risk for BTC/USD which will be closely correlated to the weakness in other financial assets. The recent declines in the price of cryptocurrencies are also likely to be limiting further upside above $37,000 as the value of a coin fell over 50% in one month between April and May, making investors wary about the safety of their investment.




Jan Novotny
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Bitcoin and Ethereum. Cryptocurrency market trigger



The cryptocurrency market, after being in the $30,000/$36,675 side channel for a long time, is again testing its lower border for strength, frightening traders who were already scared during this time.

What could have provoked market participants to sell off?

The trigger in the face of the Chinese regulator, which has taken on not only mining farms, but also the crypto industry as a whole, scares everyone, as it is a strong lever to change the market trend.

As market fears have subsided, news emerges that US Treasury Secretary Janet Yellen has announced the convening of the US President's Working Group on Financial Markets to discuss the issue of stablecoins.

The news took place during Friday and weekends, which accumulated a lot of fear, as there is something to fear for.

Note that a stablecoin is a cryptocurrency coin, which value is tied to a specific physical asset, for example, the US dollar. The most famous stablecoin, which is also the first and largest in terms of capitalization, is Tether (USDT) from Tether Limited, which guarantees that the value of USDT is backed by 20 percent of the US dollar reserves held in their bank accounts.

Back in June, some experts, including the chairman of the Federal Reserve, expressed concern about such a developing class of assets, which could not only undermine the financial stability of traditional assets but can also force the collapse of the entire crypto market if USDT could not provide for itself in vain.

The point is that USDT, as a leading stablecoin, has concentrated almost 100% of currency pairs on crypto exchanges, and if something happens to Tether Limited, this will lead to a large-scale collapse in all crypto assets.

Now you understand that the news that the working group on financial markets has taken up stablecoins may initially scare traders, which may have led to a decline in the crypto market.

The first session of the working group under the auspices of Janet Yellen has already come to an end, following from recent data, a regulatory framework for stablecoins will be created within a few months.

The details of the recommendations have not yet been disclosed, nonetheless, there is a positive signal, and Janet Yellen's speech does not contain phrases about the ban, which is already good for the entire industry as a whole.

What happens on Bitcoin and Ethereum trading charts?

For the first time since June 22, the Bitcoin quotes dropped below $30,000, which is considered a critical moment for many traders. Pay attention to the daily chart of BTC, the psychological level of $30,000 has already been broken twice by the quotes, but the price has not been properly kept below. This suggests that there are a lot of buy orders in this area, which absorbs almost all volumes, making it impossible to change the clock component.

This absorption process cannot take place forever, therefore traders always approach this parity with caution and a share of panic.

There is no need to rush to conclusions, wait for the results of the day, since at the moment it is impossible to say with complete certainty that the side cycle of $30,000/$41,500 has completed its formation with the breakdown of the lower border and we are in for a long decline.

There is still a chance for a rebound, and if it does arise, then the strengthening of bitcoin is quite possible by 15%-20%.

Ethereum, following its older brother, is following a downward trajectory, but the local lows of May 23, June 22, and June 26 have not yet been broken by market participants, which may well lead to a reduction in the volume of short positions.

The strongest sell signal will come if the price is kept below $1,700 in the day. Otherwise, a regular rebound from the base is possible, by about 20%-25%.







Gven Podolsky
Analytical expert
InstaForex Group © 2007-2021

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Digital yuan and cybersecurity pressures bitcoin

The United States is seriously thinking about cybersecurity before the start of the Olympic Games in Beijing. Meanwhile, cryptocurrencies are approaching psychological lows and are again beginning to tickle the nerves of investors who were counting on a quick comeback after the market crash in May. Judging by what the chart is drawing now, bitcoin is more likely to hit $21,000 than return to $41,000. Let's get this sorted out.

Republican Senators Marsha Blackburn, Roger Wicker, and Cynthia Lummis have called on the U.S. Olympic Committee to ban American athletes from using China's new digital currency at the 2022 Beijing Winter Olympics. The arguments are very simple: espionage, cybersecurity, and data security concerns. "Olympic athletes should be aware that the digital yuan can be used to monitor Chinese citizens as well as those who visit China. As soon as you installed a digital yuan wallet on your smartphone, you immediately fell victim to the Chinese authorities," the lawmakers said. The letter to Susanne Lyons, chair of the US Olympic Committee, also said that the Chinese token, which will soon be released into circulation, could question the status of the US dollar as the world's dominant reserve currency.



The Chinese authorities have said many times that the new digital yuan will mainly be used for domestic payments. According to the latest data from the People's Bank of China, more than 20.8 million people have opened virtual wallets for these purposes. The Chinese Foreign Ministry has responded to these accusations by asking US lawmakers to find out what digital currency really is. "US politicians should stop mixing sports and politics, and stop inflating a non-existent problem due to the development of a new digital sphere in China," the ministry said in a statement.

"According to the latest reports, hackers who previously worked in the Ministry of State Security of the People's Republic of China participated in ransomware attacks on the United States, creating a real threat to cybersecurity. Everything was done for financial gain," the White House said. During his speech, US President Joe Biden accused Chinese statesmen of extortion and cryptojacking attacks. The allegations come as part of an investigation into which China's Ministry of State Security had a hand in a massive hacking of Microsoft Exchange email earlier this year, which compromised about 30,000 organizations using the service.

With the number of cyberattacks growing exponentially this year, much of the focus is now on ransomware attacks that target critical US infrastructure. The US government has already announced a new initiative to combat these types of digital crimes, including finding ways to prevent or track crypto payments during these attacks. It is also reported that it is planned to create a task force on this type of extortion.



As for the technical picture of bitcoin, against the backdrop of all this news, it again began to terrorize investors with its attempts to push through the minimum of June 21 in the region of $29,200 - the last hope of buyers for a rebound and return of the trading instrument to the high of $41,100. If we see a breakdown of $29,200 in the near future, then it is unlikely that something will stop bitcoin on the way to test the $25,700 minimum, and then the $21,600 area. Most likely, only there we will see a return to the market of large players and a set of new positions.

So far, there has been no serious movement of bitcoin on cryptocurrency exchanges, which indicates the nerves of steel investors. It will be possible to say that the situation has returned to normal only after the return of BTC to the level of $32,400 and gain a foothold above this range. Only after that, the upward correction will continue to the $36,000 area and it will be possible to talk about the resistance test at $41,100.





Jakub Novak
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

BTC broke through $30,000 mark and risks aggravating the downward movement

The systematic and consistent movement of the narrow range reached its logical result on July 20. The quotes of the BTC/USD pair broke through the key boundary of the horizontal line and continued the downward movement. The cryptocurrency is clinging to an important support level that was formed before the previous sharp market crash. The local task for BTC is to complete trading above the $29,800 mark, while the market continues to consolidate.

The main reason why it is vital for bitcoin to complete trades above the current support level is its interpretation by the market. The last powerful collapse of the crypto market, which occurred on June 22, ended at this point. For the market, the $29,800 mark became a kind of point of no return, where many investors set stops and put options. In other words, if bitcoin breaks through this boundary and ends the trading day below the current price range of fluctuations, it will significantly aggravate the sell-off among mid-term and short-term players. Given the gradual lifting of the ban on the sale of Grayscale shares, a quick breakdown of the $29,800 threshold can trigger a powerful bearish impulse, which will shift the BTC fluctuation range to the region of $20,000-$25,000.



The fall of bitcoin quotes below the horizontal support zone of $30,000 was the logical end of the constant bearish pressure on the market. Given the lack of positive news and the worsening sell-off, bitcoin quotes will continue the downward movement to $25,000, bypassing local support zones. However, as of 11:00 UTC, the cryptocurrency is confidently approaching $29,800 thanks to the positive dynamics of the price movement on the two-hour chart. Despite this, it looks like a daunting task to completely win back the fall in bitcoin.

Over the past day, BTC sank 5%, and the current daily trading volume of $24 billion continues to put pressure on the coin's quotes. The RSI indicator on the four-hour chart is above the 50 mark, which indicates a possible increase in interest in the asset. In the long term, this may become a signal to buy back the current price drop. At the same time, the MACD indicator continues to decline and gives bearish signals.



Even though BTC/USD shows resistance in the short term and buyers are trying to sell the asset beyond the safe zone, the situation is taking on a bearish color. Most likely, bitcoin will be able to complete the current trading day above the $29,800 mark, but this level will be broken over the next few days. The situation will worsen amid fundamental negative news. In the US, they continue to actively speculate on the topic of cryptocurrency regulation, and the prolonged price consolidation is alienating the retail audience. Do not forget about the historical context, according to which August is one of the worst months for the first cryptocurrency.

All this affects market participants, as evidenced by the fall in the price of bitcoin futures below the current spot price on some crypto exchanges. This indicates a loss of confidence and panic among investors. The Fear and Greed Index dropped to 19, which also increases the number of ill-considered and illogical actions on the part of investors. Ultimately, a combination of negative factors, multiplied investor skepticism and bearish pressure will shift the BTC fluctuation corridor to $23,000-$25,000.



However, there is still room for a rebound. When bitcoin reaches a fluctuation range of $23,000-$25,000, the drop in quotes will reach 15%-20%. These indicators are the entry point for new players who can stir up the market. An influx of speculators, retail traders, and institutions could trigger a surge in bitcoin buying and trigger a bullish breakout. However, such a scenario requires a positive news impulse, which is not observed in the market.

In the near future, we should expect a breakdown of $29,800, after which the coin will begin a sharp or smooth (depending on market behavior) movement to the fluctuation zone of $23,000-$25,000. The subsequent change in the BTC/USD quotes will depend on the news background, market sentiment, and the general level of interest in cryptocurrencies.







Artem Petrenko
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Trading Signal for Ethereum, ETH/USD, for July 20 - 21, 2021: Buy above $1,712



The price of Ethereum (ETH / USD) fell to the minimum of $1,712. This level was tested on June 22 and June 26. Now ETH has again reached this area, it could be forming a triple bottom technical pattern.

The psychological level of $ 2,000 has failed to offer support to Ethereum. The bearish force continued to push below this level until the price found support at 1712.

We should expect a consolidation above $ 1,700. If the price remains above this level, we believe that there could be a technical rebound with targets towards the 21 SMA. At this level, a bearish pressure line converges.

If Ethereum manages to break out of this bearish pressure line and consolidates above the 1,875 2/8 murray zone, there could be a bullish momentum to the 200 EMA (2,059) zone and psychological level.

At the fundamental level, cryptocurrency traders began to sell Ethereum and Bitcoin and other currencies due to fear of the continued rise in inflation that would prompt the FED to withdraw its quantitative easing programs. This fact keeps the market under uncertainty and could limit the rise of the Ethereum in the short term.

According to the chart, we have drawn three circles in the 1,712 area, which has rebounded on previous occasions. Will it be a good opportunity to buy again at these levels? We must expect it to remain above the 1,875 area of 2/8 of murray for a bullish move to the 200 EMA zone.

Our recommendation is to buy above 1,712 according to the triple bottom pattern, targeting 1,858 (21 SMA) and 2,058 (200 EMA).


Support and Resistance Levels for July 20 - 21, 2021
Resistance (3) 2,063
Resistance (2) 1,965
Resistance (1) 1,841

Support (1) 1,663
Support (2) 1,437
Support (3) 1,096




Dimitrios Zappas
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

How will Bitcoin react now that it has broken below $30,000?

Bitcoin is trading below $30,000. Last time we saw this price was back in late June and price then bounced strongly towards $36,600. There are several occasions where price bounced strongly from the $29,000 price level and this makes it a considerable horizontal support that should not be ignored.



$30,000 next. Resistance is found at $36,300 and as long as price is below this level, short-term trend remains bearish.





Alexandros Yfantis
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Bitcoin Below $30,000. What Now?

Bitcoin reached a new low of 29,296 after ignoring the 30,066 static support. The bias is bearish, so BTC/USD could resume its decline anytime. The outlook is bearish so it's premature to talk and search for new long opportunities.

Its slow decline could bring more decline. The price of Bitcoin is located deep in the seller's territory, the current breakdown from the extended range signals a deeper drop. Validating the current breakout could announce more losses.


BTC/USD DOWNSIDE BREAKOUT!



Bitcoin failed to come back to test and retest the downtrend line and now is located below 30,000 psychological level and most important under the 30,066 static support. Stabilizing under these broken downside obstacles could signal more declines ahead.

The pressure is high as long as it stays below the downtrend line. The weekly S2 (28,807) represents the next downside target. Also, the 28,600 lower low could be used as a potential target if the price drops further.


OUTLOOK!
Bitcoin could extend its drop if it stays under 30,066 broken support. It could test and retest this level before dropping deeper. Only an upside breakout through the downtrend line could invalidate further decline.

We could look for new long opportunities around 28,000 psychological level if the price prints a bullish pattern.





Ralph Shedler
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Bitcoin will still return to its peaks



Bitcoin resumed its decline and fell below the $30,000 level. Thus, at the moment, the most negative scenarios are being realized. In the short term, the main cryptocurrency continues to decline and is likely to continue to decline. The news background is too weak. It simply does not support the main cryptocurrency, and investors continue to sell their coins, not expecting strong growth in the near future. However, analysts believe that the current period of bitcoin's fall, no matter how prolonged it may be, is temporary. And upon its completion, the cryptocurrency will again rush to its peak values and easily update them. Several facts speak in favor of this scenario. First, the cryptocurrency has previously adjusted quite significantly after the ascending sections of the trend. Sometimes the corrections took several years. However, invariably after each correction, a new upward trend section followed.

Secondly, the current decline of bitcoin is largely due to the repression of miners in China. However, miners in China will not throw away all their equipment. They are being relocated to other countries. The process of moving from one country to another, and even with serious and cumbersome equipment, is not fast. Therefore, mining can remain at its minimum values for six months or a year for some time. However, sooner or later it will start to recover. Thirdly, another "halving" will take place in 2024. That is, the remuneration to miners for one extracted block will be reduced by half. Usually, on the eve of each "halving", a new upward section of the trend began. Analysts are also convinced that even a loss of up to 80% of the value of bitcoin will not mean the end of the upward trend. In their opinion, this is not new for bitcoin. Thus, even a decline below $20,000 will not mean the end of the upward trend. From my point of view, this is a very controversial statement, since the upward trend has already been completed. Nevertheless, experts probably mean that it is not particularly difficult for bitcoin to restore its value to the peak values of 2021. There is also an opinion that as long as the decline in quotes persists, investors do not waste time in vain and continue to buy coins.

The decline in the bitcoin exchange rate continues because supply exceeds demand. Nevertheless, many investors continue to believe that bitcoin can grow to $100,000 per coin and even more. Accordingly, now there are very attractive prices for buying it. Faith is what bitcoin is lacking right now. The belief of the entire cryptocurrency market that it can become more expensive again. Analysts also agree that it will be possible to talk seriously about a downward trend if bitcoin does not begin to recover its losses until mid-autumn. Thus, the long-term forecast looks like this: bitcoin can decline up to the $10,000 mark, but most market participants are confident that the new upward trend will be stronger than the previous one. So, the main thing is to buy bitcoin as profitably as possible in times of low prices. That is, as cheap as possible. Forecasts for 2022-2025 say that bitcoin can conquer the $300,000 mark. The latest opinion poll of top managers of the cryptocurrency sphere shows that more than half hold the opinion about the explosive growth of bitcoin in the next 3-4 years. However, just under half of the respondents believe that bitcoin will never become the main currency of the world and the defining link of the global financial system.






Chin Zhao
Analytical expert
InstaForex Group © 2007-2021