Cryptocurrency Analysis

[IFX_Selena]

Bitcoin below $30,000: three reasons why it's too early to panic

Bitcoin fell today, breaking through the support at 31,082.82, marked with a red dotted line. Moreover, the daily candle opened below this level, which differs from all previous false breakouts of this border.

Yes, this breakdown is not impulsive, like the previous ones, therefore, it may be true. But it is not evening yet, the daily candle is not closed. It is too early to draw conclusions, even if they suggest themselves. In addition, the previous minimum has not been updated, there is still the possibility of a complex false breakout this time.

There is one more "but": a stronger support level, in this case - the horizontal at 28,392.99. This means that a bearish signal will be its true false breakout and confirmation as resistance. And then the path for $20,000 BTC/USD will be open. In the meantime, this is just a probability and an assumption based on technical analysis. But perhaps it will come true later.

Finally, bitcoin bull Anthony Pompliano of Morgan Creek Digital Assets expressed an interesting opinion. He contrasts risky assets with current concerns related to the Delta strain of coronavirus. He said that if another wave happens, governments, in general, will introduce "more aggressive monetary stimulus programs." And a hypothetical new wave of blockages will be supported by more aggressive monetary stimulus measures. And if this happens, all risky assets will continue to grow.

Note that, along with the fall in bitcoin, stock indices also fell yesterday amid risk aversion. But today they have moved to a recovery, and bitcoin at the time of this writing is also gradually reducing daily losses.

Against this background, in my opinion, the time is not right for making a decision on a buy or sell deal. BTC/USD is at a crossroads, but the situation is likely to clear up in the coming days. In the meantime, we continue to focus on the key support levels of 31,082.82 and 28,392.99, as well as the daily breakout candle. As for the latter, there are three options here: a false breakout today, a complex false breakout within a few days, or a true breakout.







Ekaterina Kiseleva
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Chinese miners will return, but not in full force



The quotes of the main cryptocurrency overcame the level of $31,100, and even worked out the level of $29,700. Thus, our forecast regarding the further fall of bitcoin is still fully coming true. It should be noted that many cryptocurrency experts believe that bitcoin will continue its decline, at least to the level of $24,000, or most likely, much lower. As we said earlier, a whole set of factors speaks in favor of this scenario: the weakest fundamental background from China, technical factors, and the fact that the bullish trend has ended. Thus, experts believe that bitcoin will recover in a year or two, and by 2025 it may be worth much more than $100,000. Some even believe that bitcoin will be able to recover to its maximum price values in 2021. We are not so optimistic and, so far, we are considering only a corrective scenario.

Meanwhile, it was calculated how many miners from China will earn again after moving to other countries, and which will be disabled forever. The total hash rate of all disabled miners in China is 90 EH/s. The total amount of electricity required for the operation of such a number of miners was 5.2 GW. Experts believe that until the very beginning of 2022, Chinese repressed miners will try to settle outside of China. However, this is not a quick matter, because not everyone will be able to organize the move in a couple of months. Experts believe that some of the mining devices will not go anywhere from China and will no longer participate in the production of cryptocurrencies. The combined power of these devices is estimated at about 22 EH/s. These are outdated devices and it is simply unprofitable to transport them to another country. Also, experts believe that this equipment is unlikely to be sold on the secondary market, which now simply does not exist inside and outside China, the demand for outdated equipment is not too high. It is also reported that there are certainly enough places for mining outside of China, but there are few places where you could bring your equipment and immediately start working. Moreover, in many places, electricity is much more expensive than in China, which makes mining less profitable. It is also noted that there are many more sites where mining equipment can be launched within 4-5 months, so most miners choose such options. They require additional investments, arrangement, and additional equipment. All this also takes time. Thus, given that most of the Chinese mining equipment will start working again no earlier than the end of 2021, bitcoin still has plenty of time to continue its decline.



Technically, bitcoin overcame the support level of $31,100 and worked out the level of $29,700. Thus, if the last level is also overcome, then bitcoin will clear its way to the level of $24,350. The fundamental background and the very fact that the bullish trend is over, now speak in favor of continuing the fall of digital gold. Wednesday morning began, oddly enough, with the growth of bitcoin quotes, so the attempt to overcome the level of $29,700 cannot be called successful yet.





Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

The European Union is next in line to tighten regulation of the cryptocurrency sphere



It is clearly visible in the 4-hour time frame that bitcoin quotes have declined to the level of $29,700, but there was no confident consolidation below this level. Thus, at the moment, we can conclude that there was a rebound from the level of $29,700, therefore bitcoin has certain chances for a slight strengthening of its positions. However, due to one rebound, it is hardly worth changing the general forecast, which continues to assume a fall in the exchange rate of the first cryptocurrency in the world. It is worth recalling that the price bounced 6 times in total from the support level of $31,100.

Meanwhile, the fundamental background for bitcoin remains sharply negative. It can be recalled that after the Chinese authorities banned mining activities, market participants turned their attention to the United States, where bitcoin and most of the transactions with it can fall under tax control. Simply put, the US authorities want to oblige all cryptocurrency exchanges and other companies providing cryptocurrency services to transfer information about all transactions over $10,000 to the Tax Administration. Naturally, in this case, the level of anonymity of bitcoin will decrease, at least for American investors. The US authorities also suspect that American investors are using bitcoin to evade taxes and do not pay income tax on investments in cryptocurrencies. Thus, in the near future, relevant bills may be issued in the United States. However, yesterday it became known that the European Union does not want to stay on the sidelines and is also preparing draft laws that will be designed to combat money laundering through cryptocurrencies and the financing of terrorism. The European Commission said in a statement that the new laws will provide full control over the transfer of digital assets. All providers of cryptocurrency services will be obliged to provide a complete list of the data of the sender and recipient of digital values. Thus, anonymous transfers will be prohibited in the European Union. This is, of course, bad news for bitcoin. It should be noted that almost the main attraction of bitcoin as a means of calculation was its anonymity. Also, many investors bought bitcoin, since they did not need to pay income tax from it. And in general, it is extremely difficult to track who owns how many bitcoins. However, authorities everywhere are now beginning to "tighten the screws", and the responsibility for providing information about transactions will be shifted to cryptocurrency companies and exchanges. It may take about two years to develop the relevant legislation and its adoption in the EU, the European Commission reports.



Technically, on the 4-hour timeframe, bitcoin quotes continue to be located below the Kijun-sen line and the Ichimoku cloud, which allows us to expect a continuation of the fall. However, the price failed to overcome the level of $29,700 the first time, so an upward pullback has already begun. Nevertheless, the downward trend continues for now.





Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Musk, Dorsey, and Cathie Wood will discuss Bitcoin's future



The important "The B Word" conference will be held today, which will be attended by such prominent figures in the crypto community as Elon Musk and Jack Dorsey. The large-scale event will discuss issues related to the future of Bitcoin, its environmental orientation, mining in the United States, and clean energy.

This is a real global alliance of leaders of the crypto industry organized in order to show the prospects of cryptocurrency and dispel the thoughts of various world banks and governments of countries about the insolvency of cryptocurrency and harm to the environment.

Coinbase and Dorsey's main company Square will also be present. Musk also decided to show up at the conference, because it is very important for him. If Musk realizes that the production of clean energy is 50% and a consensus is reached with miners, as well as other crypto enthusiasts, then after this event, Elon will be able to consider Bitcoin again as a means of payment for Tesla cars.

Dorsey is one of the most important crypto bulls who believe in Bitcoin and is ready to leave even his positions just to deal with it and develop it. He is already working on creating a wallet for storing bitcoins, as well as on launching a Bitcoin Defi platform. Meanwhile, Musk is increasingly concerned about the environmental orientation of Bitcoin.

So if Mr. Musk sees that Bitcoin is developing in the right direction and mining becomes safe on the American territory, namely in Texas, then this may become a catalyst for the adoption of Bitcoin as a means of payment for electric cars.

Notable figures as Cathie Wood and Nick Carter, who are also bullish about the main cryptocurrency, will also be present at the meeting.






Vitaly Kolesnikov
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Why you shouldn't sell bitcoin and when to buy it

Bitcoin "crossed" and bounced off the psychological mark of $29,000, the protection of which was a very important moment for determining the further upward potential of the market. For the third time in a row after the bitcoin crash in May, buyers manage to beat this level quickly enough, which indicates large static players in this range. Even despite all the negative news that is now entering the market, the bears, apparently, cannot cope with the local minimum of $29,000.



But before we talk about the technical picture of bitcoin, I would like to say a few words about the fact that yesterday the European Union proposed to introduce a ban on all anonymous transactions with cryptocurrency as part of a broad plan to combat money laundering and terrorist financing. Of course, it is interesting how they are going to ban something that, in fact, was created in order to keep the owners of wallets in the shadow. The EU plans to implement a number of proposals to strengthen the supervision of financial transactions, as well as to create a new supervisory body for 250 people, which will oversee risky financial institutions and their transactions. Here, most likely, we are talking about cryptocurrency exchanges and other financial organizations that are engaged in the purchase, sale, and exchange of cryptocurrencies. Apparently, in the near future, a ban on monetary transactions on such assets for €10,000 will be introduced.

According to the EU newsletter, it is planned to ban anonymous cryptocurrency wallets as well, as transactions carried out within the bitcoin blockchain must be governed by the same rules as regular bank transfers. "We shouldn't have other rules for the financial system. All existing rules should also apply to digital currencies," said EU Financial Services Commissioner Mairead McGuinness at a press conference.

It is expected that a new package of measures aimed, in fact, at actively combating bitcoin and other cryptocurrencies, should soon be approved by the European Parliament and the Council of Europe. However, despite the proposals made, not everyone shares this approach, which can lead to a delay in the process. Therefore, the new body to combat money laundering is planned to be launched only in 2024.

No one doubts that money laundering poses a real threat to citizens, democratic institutions, and the financial system as a whole, however, it is unlikely that by disclosing information about the owners of cryptocurrency wallets it will be possible to achieve at least some reduction in crime. Fraudsters will go to other tokens and altcoins, internal transfers, in which they have even greater anonymity, which will only create additional difficulties in identifying criminal schemes.

Returning to the technical picture of bitcoin, I would like to talk about the index of fear and greed of investors in a nutshell, which dropped to the lowest level of 10 points in 2021. This suggests that speculators and non-professional traders are on the same path to wreak havoc with the next cryptocurrency market crash that many institutional investors have come to believe in this asset class. I think it is clear to everyone that faith in bitcoin alone is clearly not enough to buy it for millions of dollars, especially at such prices as now. The picture of 2018-2020 may well repeat itself, when bitcoin collapsed from its highs, floundered a little more, and then fell into the region of $3,000-$5,000, completely plunging the target audience into shock, counting on 100,000 "by the end of the year". It was at that moment that institutional players began to gradually enter, buying up their assets from speculators. And the reward for them was the growth of BTC in the region of 60,000 in the spring of this year.



So do not rush to discount your bitcoins from your accounts. If big players really need them, then you need them too. According to the latest data, the accumulation of cryptocurrency and its withdrawal from the exchanges continues, which is a bullish signal for the market.

According to the latest data from Glassnode, BTC reserves on centralized exchanges fell to April levels, when Bitcoin was above $60,000. Last time, during the growth phase, most of the BTC was bought by Grayscale Bitcoin Trust and other institutional funds, which led to a constant net outflow of cryptocurrency from exchanges. But when a sharp decline began in May, speculators and investors quickly returned to the market and began to move coins en masse to exchanges for subsequent sale. This only accelerated the decline of the market in the future. Now, judging by the graph, investors have started accumulating the first cryptocurrency again.

As for the technical picture of bitcoin, its rebound from $29,000 is a good signal for the market. If we see a breakdown of $29,200 in the near future, it is unlikely that anything will stop bitcoin on the way to the test of the minimum at $25,700, and then the area of $21,600. Most likely, only there will we see the return of big players to the market and a set of regular positions. So far, there is no serious movement of bitcoin on cryptocurrency exchanges, which indicates the nerves of steel of investors. It will be possible to say that the situation has normalized only after BTC returns to the level of $32,400 and fixes above this range. Only after that, the upward correction will continue to the $36,000 area, and it will be possible to talk about a resistance test at $41,100.






Jakub Novak
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Bitcoin: bullish engulfing. All hope for Elon Musk

The BTC/USD daily candlestick broke through the support at 31,082.82, marked with a red dotted line, then closed bearish on Tuesday. Today, a bullish engulfing reversal pattern and rally above the level is observed, signaling that the breakout was false.

Yes, today's candle is also not closed yet. And anything can happen by the end of the day. Therefore, the conclusions are indicative. Nevertheless, now it looks like the fourth false breakout of the 31,082.82 mark, confirms its strength. In addition, support at 28,392.99 is still relevant, as is the likelihood of a bullish scenario.

Traders should remember that long-term forecasts are good for guiding and forming hypotheses. But you need to trade what you see, not what you know. And we see an unfinished false breakout, uncertainty remains, but plans for positions can be sketched. In addition, the idea of an upward reversal from the level of 31,082.82 has been hatching for a long time.

Meanwhile, the opinions of influencers continue to differ on the web. Interestingly, the B Word conference is taking place today, in which Elon Musk, Jack Dorsey, and Cathie Wood are taking part. Bitcoin supporters Dorsey and Wood may well provide Musk with strong arguments in favor of the main cryptocurrency. Or maybe he will even change his mind and write something that will support the current jump.

The assumption is interesting, but similar situations of coincidence of the technical pattern and the rhetoric of Elon Musk on the bitcoin chart have already been, however, on the way to the historical maximum.

The idea of the crypto community that today's B Word conference can help the market may not be groundless. Both Jack Dorsey, CEO of Square, and Cathie Wood, CEO of ARK Invest, will have a lot of new data that they can provide Elon Musk regarding greener criteria in favor of bitcoin. If persuaded, Musk will undoubtedly make some kind of positive statement that could bring many investors back to the main cryptocurrency.

Apart from China, the main issue to be addressed is the environmental impact of bitcoin mining. According to the recently formed Bitcoin Mining Council, the energy consumption of mining is now "negligible".

Now let's look at the opposite point of view and the arguments for a bearish scenario. After all, the market is not moved alone by Musk, the price depends more on the positions of big players.

According to Bybt BTC Options Open Interest By Strike Price, more and more investors who are opening positions in bitcoin put options for $20,000 and $22,000. The aggregate open interest at these prices is almost 10,000 BTC. Much of the interest came after the recent fall in the price of bitcoin below the $30,000 mark.

What does this mean? Most likely, it confirms the fact that supporters of the bearish scenario are ready for a fall in prices. But, options are derivatives that give a right that does not have to be exercised. It is more of an insurance, a way to hedge open positions. In addition, it became known that at the beginning of the week, the whales purchased bitcoins for $1.7 billion.

However, no matter what happens behind the scenes of the market, in such uncertainty it is worth remembering what Grandpa Dow bequeathed to us: the price includes everything. Therefore, when opening a deal, it is worth acting based on what we see, and not what we know. Having combined these rules, we continue to observe the clarification of the situation. With the current technical picture, the recovery scenario has not yet lost its relevance. But we don't discount the bearish one either. We wait.






Ekaterina Kiseleva
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Mastercard has officially announced that it will expand its proprietary cryptocurrency exchange program



MasterCard has officially announced that it will expand its proprietary cryptocurrency exchange program in the very near future. The US company is already cooperating with various well-known banks in America to test a new range of services with regard to digital assets.

In an official appeal to users, MasterCard stated that this innovation will allow various world banks and cryptocurrency companies to offer special cards to customers interested in cryptocurrencies that will be suitable for these purposes.

The global financial services giant wants to make life easier for cryptocurrency firms, make the exchange process between cryptocurrencies and fiat funds convenient and as fast as possible. When people enter the MasterCard network, they can safely exchange Bitcoin, Ethereum for the US dollar, and vice versa.

Up to this point, many people tried to launch such an innovation, but there could be certain operational difficulties when trying to convert cryptocurrencies. When MasterCard cooperates with various banks to test its innovation, this will solve the problem for all MasterCard users and cryptocurrency custodians.

Back in February 2021, the company said that it would allow users to make payments in cryptocurrency due to the excessive interest of users in digital assets. And now they can even start creating crypto-oriented bank cards at the request of customers.

About 50% of MasterCard customers said that they will store and exchange cryptocurrency for fiat in 2022, so MasterCard is doing everything to satisfy the desires of its users.





Vitaly Kolesnikov
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Trading plan for Bitcoin for July 22, 2021



Technical outlook:
Bitcoin has now staged an impressive rally yesterday taking out interim resistance at $32,450 mark. The crypto rallied up to $32,900 levels before pulling back, and is seen to be consolidating its gains today. High probability remains for yet another push through $33,200/300 mark before producing any meaningful retracements. Ideally prices stay above $29,400 lows, going forward.

Bitcoin might have just turned a buy on dips after turning from $29,400 lows early this week. The move came in-line with our projection of a counter trend rally towards at least $42,000 mark before deciding the next major move. Watch out for intraday support around $31,000/200 region for bulls to be back in control and yet another opportunity to initiate long positions.

Bitcoin is seen to be trading around $31,800 levels at this point in writing and is expected to print another high towards $33,200/300 and up to $34,000 levels respectively. Immediate support now stays at $29,400 while resistance is seen towards $33,000, followed by $36,000 and $41,600 levels respectively. Watch out for the rally to extend through $42,000 levels in the next few trading sessions.


Trading plan:
Remain long, stop @ 28,500, target @ 36,000 and @ 42,000

Good luck!





Oscar Ton
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

BTC analysis for July 22,.2021 - Breakout of the symmetrical triangle to the downside

Technical analysis:



BTC has been trading sideways in the past 24 hours but I see downside breakout of the symmetrical triangle, which is good signal for the downside movement.


Trading recommendation:
Watch for selling opportunities on the rallies with the downside target at the price of $31,000.

Stochastic is showing fresh bear cross, which is another sign of the weakness...

Key resistance is set at $32,800




Petar Jacimovic
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

EU will not ban anonymous cryptocurrency wallets

The cryptocurrency community exhaled on the clarification of yesterday's statements of the European Commission regulators.

In a nutshell: yesterday, the European Union proposed to introduce a ban on all anonymous transactions with cryptocurrency as part of a broad plan to combat money laundering and terrorist financing. The EU plans to implement a number of proposals to strengthen the supervision of financial transactions, as well as to create a new supervisory body staffed by 250 people, which will oversee risky financial institutions and their transactions. Here, most likely, we are talking about cryptocurrency exchanges and other financial organizations that are engaged in the purchase, sale, and exchange of cryptocurrencies. Apparently, in the near future, a ban on monetary transactions on such assets for more than €10,000 will be introduced.

Against this background, the bitcoin exchange rate sank significantly, however, after the crypto community studied the document in more detail, it became clear that everything is far from what was said in the statement. It is unclear why the context related to the ban on anonymous transactions and accounts was pulled out. Either this is a gross mistake or a deliberate misrepresentation to "annoy".



So what is wrong, you ask?

Claims that European Commission regulators will soon ban anonymous cryptocurrency wallets are not true. In this case, it means that instead of a ban on the use of anonymous cryptocurrency wallets, the EU will establish stricter, but justified rules for operators and financial service providers in this direction. First of all, we are talking about exchanges, financial companies and the banking sector, which already provide depository services for the storage and exchange of cryptocurrencies. The new rules will affect precisely the movement of capital. With the help of these measures (mainly), the fight against money laundering and the financing of terrorism is now being carried out. The rules prohibit the provision of anonymous services, such as the creation of accounts (wallets for cryptocurrency) or its exchange, provided by a third party. There was no talk about a ban on personal cryptocurrency wallets and a ban on the use of software for this purpose.

The EC noted that citizens will be able to freely acquire, store and spend cryptocurrency anonymously, but on condition that you do not engage in criminal activity. In this case, anonymity will not last long.

As I noted in yesterday's review, the introduction of a ban on anonymous cryptocurrency wallets, in fact, imposes a ban on the entire industry, since almost every cryptocurrency wallet is anonymous by default.

Experts point out that due to the lack of qualified specialists in this field, the attempt to regulate cryptocurrencies is too often carried out by people who know almost nothing about the technology. Therefore, such errors are obtained out of the blue. But some do not exclude the fact of a special injection of this kind of information to probe the market and study the reaction to this news. It seems incredible that a high-ranking EU commissioner, whose staff is professional, could make such an incorrect statement. The cryptocurrency community explains it this way: the EU knows it cannot ban anonymous wallets, but by hiding the difference between custodian wallets and self-storage software, they can mislead some part of the population.

Another issue that worries the community is the new era of digital currency. In the not too distant future, every time you buy a cup of coffee, someone, somewhere, might know about it. This is the main problem with the new digital dollar, euro or yuan, or any other currency. But aside from the retail consumer, digital currencies, including cryptocurrencies, pose a "fundamental threat" to central banks around the world, as they simply exclude banks from the system as they will no longer be needed. Everything will be managed by the Central Bank, excluding intermediaries from the general picture.

In turn, governments say they are developing their own digital currencies in order to increase trust in payment systems and increase consumer confidence. But they forget to say the most important thing: in using this kind of digital asset, you completely lose your privacy.



As for the technical picture of bitcoin, its rebound from $29,000 is a good signal for the market. 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 will we see a return of big players to the market and a set of new positions. So far, there has been no serious movement of bitcoin to cryptocurrency exchanges, which indicates the nerves of steel investors. It will be possible to say that the situation has returned to normal only after BTC returns to the $32,400 level and consolidates 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