Cryptocurrency Analysis

[IFX_Selena]

China's ban on crypto is a game



It's not that governments like China ban cryptocurrencies because they necessarily expect the technology to fail. The point is, they want to experiment with potentially trillions of dollars in play.

With its latest move, China has joined a small list of countries advocating a ban on crypto transactions. This is a complete opposite from El Salvador, which adopted Bitcoin as legal tender this year and has been praised by both libertarians and bitcoin supporters alike. Meanwhile, in the United States, cryptocurrency trading is allowed, but regulators are closely monitoring it.

Understanding many aspects of this multifaceted battle for market control will be key for millions of investors hoping to cash in on the crypto craze. The struggle should affect the global financial system, where news about products such as bitcoin-traded funds, odd-named digital tokens and NFT assets emerges every day. The super-rich are also involved, and major financial institutions are shifting to digital currencies.

More broadly, the struggle will also affect sociocultural discussions on everything from climate change to inequality and trade to fiat currencies. How the world's two largest economies - the United States and China - advance in their market surveillance efforts is likely to have the most far-reaching consequences.

"Crypto has become too big to ignore," said Bitwise CIO Matt Hougan. "a $ 2 trillion industry and every major Wall Street bank is helping investors access it and now they have to fight it."

China shook financial markets this week by announcing that all cryptocurrency-related transactions would be considered illegal in the country, echoing less straightforward exceptions made back in 2013, when tough measures were taken against initial coin offerings, crypto exchanges and cryptocurrency mining.

As a replacement, it plans to release its own digital currency - digital yuan. It is one of 81 countries that are exploring their own digital currencies, a list that started with early adopters like Venezuela and Estonia, but now includes larger countries like the United States.

China's 1.4 billion population is likely to give it an edge when it begins rolling out digital yuan globally at the Beijing 2022 Winter Olympics - a prospect that has prompted some US politicians to ban American athletes from using electronic coins while there.

"For China, I think it's pretty clear they want to promote the digital yuan, and that they are simply taking care of the competition," said Nicolas Christin, an associate professor at Carnegie Mellon University.

China said 10 regulators, including the central bank, will work together to track cryptocurrency-related activities. The ban even states that foreign exchanges are prohibited from providing services to investors from the mainland. The country's actions over the past few years have already led to a decline in local trading, said Randall Kroshner, deputy dean of the University of Chicago Booth School of Business and a former governor of the Federal Reserve Board. "Even with a VPN, it can be very difficult to connect and it can slow down," he said.






Andrey Shevchenko
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

What on-chain analysis can tell about bitcoin during China's bans

Bitcoin broke through an important support zone and declined to $41,600 where it was trading at 12:30 p.m. All this happened amid cryptocurrency bans in China, which negatively affected market sentiment and triggered a mass migration of coins. Bitcoin migrations are not necessarily related to its sale, as many traders are simply moving their assets to safer and more profitable platforms. This and much more can be learned by conducting an on-chain analysis of bitcoin market activity during the Chinese sanctions and tighter regulation of the digital asset market in South Korea.

First things first. On September 28, the cryptocurrency and bitcoin markets are in a consolidation phase. The powerful collapse in mid-September as well as a drop in the price of major cryptocurrencies became a reason for that. After a period of uncertainty and constant price hikes, the market needs time to stabilize the situation and absorb the appeared volumes. However, this situation happens only if there is a bullish trend and the overall market situation is favorable for growth. Given the turmoil in financial markets due to the Fed meeting, Chinese sanctions, tighter regulation of cryptocurrencies in South Korea, and the 25 mark on the Fear & Greed Index, an onchain analysis is needed to determine current investor behavior.

On-chain activity is the actions of cryptocurrency market players who independently dispose of their crypto-assets, which make the record go directly to the main blockchain. This statistic includes both individuals and large companies.

Price consolidation is a period when a certain cryptocurrency's trend is located within a narrow horizontal price channel. Usually, this process indicates price stabilization or weakness of market participants (bulls and bears).

The Fear & Greed Index is an indicator showing investors' willingness to buy or sell cryptocurrencies (bitcoin and others). If the value is closer to 0, then the market is in a state of fear and prefers to get rid of its coins (sell) to avoid losses. If the value is closer to 100, it indicates a desire to buy and take profits on the growth of cryptocurrency quotations.

Supply distribution by the balance of addresses metrics allows determining the interest of different groups of investors (according to the level of their opportunities). Using this indicator, it is possible to see all groups of bitcoin investors and determine which part of the coin's holders is growing in number. Looking at the first three groups of investors with wallet balances from 10 to 100 BTC, from 100 to 1000 BTC, and from 1000 to 10,000 BTC, you can see the formation of a powerful upward trend over the last thirty days. During the formation, the main stage of volume accumulation began. Addresses with a balance of 1000-10,000 BTC show significant growth, which indicates the increase in the institutional traders, as only a small part of retail traders can buy such an amount of BTC.



When analyzing the other group of big players who own more than 10,000 BTC, you can see the stability and lack of growth. Partially this is due to the tiny number of coins the market offers and they are not indicated on the charts. On the other hand, it gives a clear understanding of who right now makes up the main audience of bitcoin. They are investors with 1,000-10,000 BTC wallets. Right now, more than 80% of the available bitcoin supply is concentrated in the hands of long-term holders, which suggests that this part of the asset's audience has a significant influence on its current price.



By balance of addresses is an on-chain metric that allows seeing the increase/decrease in the number of addresses with certain wallet balances.

The MVRV (Market Value to Realized Value) indicator displays a ratio of an asset's market capitalization to its realized capitalization. This metric provides a more objective view of a coin's current value and market period. The metric also displays the results of coin migration: if the value is below 0, then players transferred coins with losses, and if it is above 0, then investors made profits from coin transactions.

Once the prevailing audience is defined, it is necessary to study the state of the MVRV to understand the possible strategies of investors. If this indicator is above 10, then investors may stage a local sell-off in the hope of preserving at least part of their profits. If the indicator is below 10, then we can assume a wait-and-see situation and set take profit orders when the price of the asset starts to rise. As of 1 p.m., MVRV shows 5%, which may indicate a wait-and-see attitude on the part of market players hoping to take profit. Such MVRV's low value indicates that during the price decline many investors transferred bitcoins with losses.



According to the main onchain metrics needed to analyze the current behavior of investors in the bitcoin market, we can observe a period of accumulation and purchasing of coins in the market. It indicates weak price fluctuations and a lack of momentum for growth. However, the current situation is exacerbated by the negative news background, so most traders have taken a wait-and-see attitude and, if possible, accumulate volumes of coins. For the most profitable entrance in any financial instrument, it is necessary to use the analysis of technical indicators on the horizontal charts of assets.





Artem Petrenko
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

BTC analysis for September 28,.2021 - Sellers in control, potential for drop towards $39.700

Technical Analysis:



BTC has been trading downside most recently and I see potential for the downside continuation towards $40,800.


Trading recommendation:
Due to downside cycle and the downside trend, watch for selling opportunities on the intraday rallies with the targets at

$40,850

$39,700

Stochastic oscillator is showing bear condition with no evidence for the reversal.

Resistance is set at $44,350





Petar Jacimovic
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Bitcoin: China's crypto crackdown does not scare investors

The escalating Chinese crackdown on cryptocurrencies doesn't seem to scare Bitcoin investors too much. The latest data shows that they used price cuts to increase their positions.

CoinShares' weekly digital asset funds flow report showed that there was a $50 million inflow in bitcoin investment products. Almost half, 29 million, went to Ethereum products.

Also, over the past week, investors have invested in cryptocurrencies such as Solana (SOL), Cardano (ADA) and Polkadot (DOT). Thus, in the end, investment crypto products received $95 million in inflows over the past week. It is worth noting that this happened against the backdrop of a flight from risk due to the problems of the Chinese developer Evergrande, alarming comments from the SEC and as China further tighten the screws.

The CoinShares report says:
"Bitcoin saw the largest inflows of any investment product, totaling US$50m, although, it has experienced the brunt of negative investor sentiment over the last two quarters. Last week marks only the 4th week of inflows out of the last 17.

Ethereum followed Bitcoin with inflows totaling US$29m last week. Sentiment has remained relatively buoyant for Ethereum as the amount staked to Eth 2.0 progresses."

Institutional investors who cannot buy spot bitcoin have been actively investing in investment products related to the main cryptocurrency all this time. One such fund, Grayscale, the world's largest cryptocurrency asset manager, now manages over $28 billion in BTC assets. Against this background, it was rather strange to hear the statement of Anthony Scaramucci, manager of one of the leading hedge funds Skybridge Capital, that there are no institutions in this market.

There are other, no less interesting on-chain data. The Glassnode report shows that the total volume of bitcoins held by long-term holders reached a record high of 80.5% of the circulating supply.

Holders are not eager to sell coins. During the recent 2020/21 bull market, roughly 12.3% of the circulating Bitcoin supply was accumulated by long-term holders.

But those who bought cryptocurrency recently are in no hurry to get rid of it, says Glassnode.

"We can also see that the relative supply held by short-term holders has reached an all-time low of 20% of circulating supply. This is a rare occurrence that has historically described the late stage accumulation periods of bear markets by the smarter money."

Thus, it is hoped that the main cryptocurrency will be able to stay above the important technical border of the support zone 40,977.38 - 41,980.24. From a technical point of view (and the price includes everything, even what we did not take into account among the fundamental factors), the medium-term forecast remains unchanged for now. If Bitcoin can hold above $40,000 per coin, then there is a chance of rising to $50,000. But the passage of the area 40,977.38 - 41,980.24 from top to bottom and consolidation below it will open the way for a fall to $30,000.

The local technical picture has not changed since yesterday: the BTC/USD price continues to consolidate in the corridor between the support area 40,977.38 - 41,980.24 and resistance 44,807.24 (red dotted line). Therefore, we are waiting in which direction the exit from it will take place.







Ekaterina Kiseleva
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

BCH/USD - Technical analysis



Realizing the decline, bearish traders recently met support from the weekly Ichimoku cloud. Testing its lower limit (485.81) led to prolonged inhibition. It has not yet been possible to overcome the level, but it has also not been possible to form a full-fledged rebound. As a result, there is uncertainty in daytime sentiment. The breakdown of 485.81 and a reliable consolidation in the bearish zone relative to the weekly Ichimoku cloud will allow us to consider the weekly target for the breakout of the cloud as a prospect for the development of a downward trend. But before that, attention will be directed to the execution of the daily target for the breakdown of the cloud (345.40 - 294.63).

If a rebound from the met support is formed in the near future, while bulls will be able to regain the area of 537.36 - 547.96, where the daily short-term trend is now combining their efforts, the lower border of the daily cloud and the upper border of the weekly cloud, the prevalence of bearish sentiment will be questioned. In this case, bulls will have new prospects.



On lower timeframes, bears currently have the advantage. For the last few hours, an upward correction has been observed at H1, the closest resistance of which in the current situation is the zone of unification of key levels 511.66 - 499.58 (central pivot point + weekly long-term trend). Consolidation above will change the current balance of power on H1 in favor of the bulls. The resistance to the classic pivot points 521.30 and 528.86 serve as benchmarks for the continuation of the upward movement within the day. For bears, the support of the classic pivot points located at 477.86 and 463.70 are still relevant.


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

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

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





Evangelos Poulakis
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Trading Signal for BITCOIN for September 28 - 29, 2021: Sell below $ 41,500 (symmetrical triangle)



Bitcoin is trading within a symmetrical triangle pattern, which represents an accumulation of the two forces of supply and demand. BTC waiting for a catalyst that causes a break either bullish or bearish. The latter is what we expect. Since BTC is below the 200 EMA and 21 SMA, we expect a drop in the short term to the 0/8 murray level located at 37,500.

The psychological level of 40,000 has acted as a strong support. Each time BTC touched this level, the bulls added strong buy orders and launched what appears to be a recovery. Thus, it is consolidating since September 20, but soon this scenario could change.

However, the bullish force is running out as seen in the 4-hour chart. The formation of the symmetrical triangle and that fact that BTC remains below the 200 EMA shows a bearish sign and negative outlook. Therefore, any technical bounce will continue to be a good opportunity to sell below 45,312.

A further increase in buy orders will probably push BTC to the resistance level of 45,312, so the price could test the strength of the resistance of the 200 moving average. Breaking this barrier will open the way to a new bullish wave with targets at the psychological level of 50,000, although we believe that it will be difficult to reach it as the US dollar is also exerting pressure.

Our outlook will continue to be bearish for BTC as long as it remains below the 200 EMA and the key level of 45,500. If you observe a technical rebound, it will be a sell signal, the short-term targets are seen at about 37,500.

A break of 37,500 will increase further downward pressure and possibly trigger a sharp decline that will push the price down towards the psychological level of 30,000 in the medium term.


Support and Resistance Levels for September 28 - 29, 2021
Resistance (3) 43,122
Resistance (2) 42,187
Resistance (1) 41,963

Support (1) 41,339
Support (2) 40,625
Support (3) 39,503


Trading tip for BTC for September 28 - 29, 2021
Sell below 41,500 (symmetrical triangle) with take profit at 40,625 (2/8) and 37,500 (0/8), stop loss above 43,750.






Dimitrios Zappas
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

The US is trying to curb the cryptocurrency market: Fed wants to prevent the formation and spread of cryptocurrencies by creating its own digital dollar



Regulators around the world are trying to follow the Chinese example and tighten the rules regarding the cryptocurrency market. States are concerned about such a rapid growth of the cryptocurrency market, which has exceeded a record $2 trillion.

According to many analysts, many states will try to do anything to suppress such a sharp growth of cryptocurrencies, as they fear that fiat funds will soon be displaced by bitcoin and other altcoins if the cryptocurrency market continues to gain momentum, and bitcoin continues to scale and be introduced around the world.

Countries may lose control over their financial and monetary systems. The US is also making attempts to curb the cryptocurrency market.

President Joe Biden has his own specialized group that deals with financial markets. It includes financial regulators who monitor the cryptocurrency market.

This group includes the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission, the Ministry of Finance, and the Federal Reserve.

Securities and Exchange Commission Chairman Gary Gensler has long been unable to find a compromise with the cryptocurrency market. He is sure that the market should be tightly regulated and be in a tight grip.

Recently, he threatened to sue the largest exchange coinbase, as it wanted to launch its own Coinbase Lend product, where interest would be lent to borrowers.

The SEC studies cryptocurrencies according to various criteria, such as a platform for cryptocurrency trading and lending, investment instruments, offers and sale of cryptocurrencies.

The Securities and Exchange Commission conducts a very strict and supervisory policy when certain crypto assets fall within their competence.

Gensler said that Defi platforms come under their close supervision and will now be under the jurisdiction of the Securities and Exchange Commission.

The Fed wants to prevent the formation and spread of cryptocurrencies by creating its own digital dollar. In the near future, the US central bank should release a long-awaited report, which will indicate information about the date and launch of the digital dollar.

Many US politicians see the adoption of the digital dollar as a real breakthrough, as it will help in the fight against bitcoin and its rapid scalability.





Vitaly Kolesnikov
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Hanke criticizes Bitcoin, while Alibaba prohibits the sale of miners



Bitcoin plummeted to the level of $ 40,746 for the fifth time and rebounded from it again. All this time, Bitcoin is also below the downward trend line, so the "narrowing triangle" remains relevant. And along with it, the main digital asset will move in the direction of which side of the triangle will ultimately be broken. So far, we see that there are massive pending buy orders at the level of $ 40,746, which are constantly triggered, keeping the cryptocurrency above itself. However, the miracle cannot continue permanently. We expect Bitcoin to eventually break through this level, as the latest news from China is clearly not driving the growth of the world's first cryptocurrency.

Steve Hanke, who is a Professor of Applied Economics in Johns Hopkins University, has criticized cryptocurrencies again, comparing them to the largest catastrophes of mankind – the crash of the Titanic and the death of the Hindenburg airship. Hanke called Bitcoin a speculative zero-value asset. He also did not give any explanations for his comparison, but one can guess that an economist who worked in the administration of President Ronald Reagan believes that Bitcoin will collapse sooner or later.

Meanwhile, the US Senate continues to work on tightening regulation of the cryptocurrency segment. Earlier, it was already mentioned that there will be a vote on the "infrastructure package" this week, which includes several important points for digital assets. In particular, taxation and reporting. However, Senators Maggie Hassan and Joni Ernst believe that the US Treasury Department should also study how other countries regulate the cryptocurrency sphere and report to Congress. Senators believe that the cryptocurrency should be studied as best as possible, and only then make new decisions on its regulation.

On another note, the largest commerce company Alibaba imposed a ban on the sale of Bitcoin miners. The company's official statement says that "given the instability of laws and regulations regarding cryptocurrencies and related products in various international markets, Alibaba prohibits the sale of miners in addition to banning digital assets such as Bitcoin, Litecoin, Ethereum and others."

As a result, Bitcoin's fundamental background remains impartial and it is even a little strange to see the cryptocurrency so high. Many states of the world (except for El Salvador) are following the path of toughening the circulation of bitcoin or simply prohibiting it. And it can be recalled that this cryptocurrency has managed to rise in price from $ 30,000 to $ 52,000 over the past few months, and this growth still looks groundless. Therefore, we believe that it will further decline to the level of $ 30,000. However, one should not trade without appropriate technical signals.



There is still a downward trend in the four-hour timeframe. Bitcoin declined to the support level of $ 40,746 five times and rebounded each time. Along with this, the price also failed to consolidate above the Ichimoku cloud and above the trend line. Therefore, it cannot be said that the bears are currently weak. If the trend line is broken, it is recommended to buy Bitcoin with the targets of $ 46,600 and $ 51,350. But if the level of $ 40,746 is still broken, then the decline may resume to the level of $ 31,100.





Paolo Greco
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Bitcoin [BTC/USD] challenges dynamic obstacle! Long or short?

Bitcoin moves somehow sideways in the short term being undecided. It remains to see what will really happen as the crypto stands above a strong demand zone. The pressure remains high in the short term, so won't be a surprise if BTC/USD drops deeper.

In the last 24 hours, the price of Bitcoin is down by 2.56%, while in the last 7 days it's still up by 0.40%. BTC/USD is into a support zone, so anything could happen. Personally, I'll wait for a fresh opportunity before taking action. A bullish pattern could bring long signals, while a new lower low may activate a larger corrective phase.


BITCOIN AT CROSSROADS!


It has failed to stay above the 38.2% retracement level and above the weekly pivot point (43,361.66) indicating strong pressure. In addition, its failure to come back to reach the downtrend line shows that the sellers are very strong.

Now it's pressuring the ascending pitchfork's lower median line (lml) and the 50% retracement level. The 40,192.90 stands as static support. Personally, I believe that only dropping and closing below this level may really activate a larger downside movement.


BITCOIN OUTLOOK!
BTC/USD's failure to reach the ascending pitchfork's median line (ml) signaled massive bearish pressure and potential drops towards the lower median line (lml). Only a valid breakout above the immediate downtrend line may invalidate a downside continuation.

Personally, I believe that a bearish closure below the weekly S1 (39,419) could confirm a larger drop towards 35,000 or down to 32,000 psychological levels.





Ralph Shedler
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Ethereum 50% retracement level continues to hold

Ethereum moves sideways in the short term but the bias remains bearish. The crypto found a strong support zone, a demand area, so a temporary rebound is natural. The price of Bitcoin tries to come back higher, so the altcoins could start increasing as well.

ETH/USD is up by 0.12% in the last 24 hours and by 0.09% in the last 7 days. The price action develops a triangle pattern that could bring us great opportunities. Bitcoin's growth after printing a bullish engulfing on the 40,904 static support could attract more buyers on ETH/USD as well.


ETH/USD PRINTS A TRIANGLE PATTERN!


Ethereum failed to stabilize under the 50% retracement level signaling a strong demand zone. It moves sideways after its failure to reach the median line (ml) or the lower median line (lml) of the ascending pitchfork.

Personally, I believe that only a valid breakdown below the lower median line (lml) and through the weekly S1 (2693.46) could really activate a larger downwards movement. On the contrary, ETH/USD may develop a strong swing higher only after making a valid breakout from the down channel pattern.

It's premature to talk about a long or a short opportunity as long as the crypto moves sideways.


ETHEREUM PREDICTION!
A larger corrective phase will be activated by a valid breakdown below the lower median line (lml) and under the S1 (2,693.46). This scenario could signal potential drops towards the weekly S2 (2,323) and down to the channel's downside line.





Ralph Shedler
Analytical expert of InstaForex
© 2007-2021