Cryptocurrency Analysis

[IFX_Selena]

Bitcoin: the collapse of hopes and the bull market (not a fact)


Cryptocurrencies were not very encouraging at the weekend, having collapsed by almost 20%. The fall in the area of $41,000 was definitely not included in the plans or forecasts.

But be that as it may, the technicality with which the price remained above the level of 48,175.51, which worked before, is encouraging. It now serves as that shaky frontier keeping the mainstream cryptocurrency from the next downturn.


HOW LOW WILL BTCUSD FALL?
By tracking the news feed for the cryptocurrency market over three days, it is difficult to clearly see the reason for the slump over the weekend. Everyone is looking at the technical picture and holding onto the $48,000 support.

In fact, there is no special guide at present apart from technology. In such a situation, there are two immediate scenarios: an upward pullback to the area of $52,000 - $53,000 per coin and a breakdown of the support at $48,000.

In either case, it is difficult to talk about a return to growth in the near future. The most optimistic scenario, in my opinion, is consolidation in the range of $48,000 - $52,000. Although there are those who expect a V-shaped pullback, it has not yet happened. It can be judged by consolidating above $53,000 per bitcoin.

The second scenario is a breakout of the $48,000 support, in which Bitcoin can be caught at Saturday's lows in the $42,000 area.


ARE BITCOIN WHALES SHORTING THE MAIN CRYPTOCURRENCY?
Analyst firm CryptoQuant warned on Sunday that the rise in major moves on crypto exchanges indicates that whales may increase their sales.

Such conclusions were made on the basis of a metric that shows the ratio of whales on the exchange. It is calculated based on the maximum size of inflows and outflows from exchanges compared to the volume of total inflows.

Before bitcoin collapsed on Saturday, forming its low, this ratio increased to its peak of 0.95. It returned to the same value on Monday.

CryptoQuant also added that there is a noticeable cooling in the futures market, which can be seen in the decrease in the calculated leverage ratio by 22%.

In contrast, over the past few days, smaller investors have increased their positions - in contrast to the price adjustments of both whales and bitcoins that took place earlier in 2021.

But did someone buy out the bottom, judging by the long Saturday shadow to return to $48,000 per bitcoin? So far, yes, and the data shows retail investors are taking advantage of the opportunity to restock cryptocurrencies. Not to mention El Salvador, who loves to buy the bottom in the tradition of President Bukele.

What is all this for? If major players continue to sell BTCUSD, the current support is unlikely to resist and the price may well return to Saturday's lows. In the current situation, it is very difficult to make predictions other than the technical ones described above. Therefore, as Grandpa Dow bequeathed to us, it is worth focusing on the levels and the price, which includes everything.








Ekaterina Kiseleva
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Bitcoin - is the correction over?

Bitcoin was trading at 48,891.66 at the time of writing. It seemed undecided after registering an amazing sell-off in the previous days. In the short term, the bias remains bearish. It's located below major upside obstacles, so it could drop anytime.

BTC/USD registered a 27.21% drop from 57,652 Friday's high to 41,967.50 Saturday's low. In the short term, Bitcoin tries to recover but the 49,777.62 level stopped the bullish momentum. In the last 24 hours, the crypto is down only by 0.28%.


BTC/USD MASSIVE DROP



As you already know from my analysis, BTC/USD activated a downside movement after dropping below 55,918.80 static support. I've also told you that dropping and closing below 53,524.03 could open the door for a larger downside movement.

BTC/USD registered a false breakdown with great separation below the Descending Pitchfork's lower median line (lml) and under 88.6% signaling that the downside movement could be over.


BITCOIN PREDICTION
As long as it stays below 50,226.31 weekly pivot point and under the Descending Pitchfork's median line (ml), BTC/USD could drop again. Registering only false breakouts through these upside obstacles could signal new bearish momentum.

Only jumping, closing, and stabilizing above the pivot point, above the median line (ml), and above the 50,000 psychological level could signal a strong upwards movement.





Ralph Shedler
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Trading signal for Ripple (XRP) on December 07 - 08, 2021: buy above $0,8129 (21 SMA)




The price of Ripple (XRP) collapsed to the price level of July 26 at 0.6036. The sharp fall in BTC caused Ripple to fall strongly until it almost reached the extreme oversold zone of -2/8 of Murray.

After a few hours, XRP bounced closer to the zone of the 21 SMA. Right now, it is consolidating above the 21 moving average and if it trades above 0.8129, the bullish movement could continue to the top of the bearish channel and up to the 200 EMA located at 1.0108.

Since December 4, when it registered the low of 0.60, until today, December 7, when it is trading at 0.82, it has obtained a yield of more than 30%. The bulls were positioned at the low-price level with the target at the psychological level of 1.00 in the short term.

Our trading plan is to buy as long as it remains above the SMA 21, targeting 0.8789 and 1.0108 (200 EMA). Conversely, if it trades below 8/8 Murray again, the downward movement is expected to continue towards the support of -1/8 Murray around 0.6836 and up to the psychological level of 0.50.

If BTC consolidates below the 50,000 level, due to the correlation it is likely to affect the strength of XRP, and it may fall to the support level of 0.62. The eagle indicator is under downward pressure and moving below the trend channel. This provides a bearish signal for the short term.


Support and Resistance Levels for December 07 - 08 2021
Resistance (3) 0,9230
Resistance (2) 0,8736
Resistance (1) 0,8456

Support (1) 0,7682
Support (2) 0,7188
Support (3) 0,6908


A trading tip for XRP on December 07 - 08, 2021
Buy above 0,8129 (21 SMA) with take profit at 0,8789 (1/8) and 1,0108 (200 EMA), stop loss below 0,7950.





Dimitrios Zappas
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

The main news of the crypto market for December 7



Bitcoin has collapsed to $42,000 and may continue to decline.

The weekend turned out to be really "black" for bitcoin. Within just a few hours on Saturday, the cryptocurrency quotes fell by $15,000. A little later, a recovery followed, which allowed the cryptocurrency to recover most of the losses. But only Saturday's losses. In just the last few weeks, bitcoin has sunk by $19,000, if you count the opening and closing levels. And, most importantly, all this movement can be considered one wave. Thus, after a slight pullback to the top, a new downward wave may follow, which may lead the cryptocurrency to the $ 30,000 mark, where it has been for a long time this summer. However, we will talk about the waves a little below. So far, I want to note that only an unsuccessful attempt to break through the $ 41,368 and $ 42,674 marks, which corresponds to 38.2% and 38.2% by Fibonacci, stopped the decline of the instrument. At the same time, two days have passed since this fall and the markets are clearly in no hurry to buy bitcoin "at an attractive price." Perhaps they are waiting for a new, stronger decline and, from my point of view, they are waiting correctly.

On Saturday, there was only one event that could lead to such a strong decline in the entire cryptocurrency market, since not only bitcoin fell in price. The Chinese developer Evergrande, who has been walking on the edge of the abyss of bankruptcy for several months in a row, announced that he would not be able to guarantee the fulfillment of financial obligations and the payment of interest on bonds for $ 260 million. By and large, this is called a technical default. The company has certain assets, but if investors refuse to restructure its debt, the company must be declared bankrupt. To tell the truth, many have already given up on it. Its debt is too great. But what will be the consequences after this is officially announced? At times when a large company fails and can no longer fulfill its obligations, it affects all markets. A vivid example of this is the collapse of Lehman Brothers in 2008. Investors in a panic get rid of the riskiest assets, as they are the first to fall in price. And on Saturday, investors could not sell stocks or bonds, since stock markets were closed. Therefore, only the cryptocurrency market suffered. It should also be noted that at the moment the total debt of the company exceeds its value by $ 100 billion, and the Chinese government refused to lend a helping hand to the company. According to many analysts, the official collapse of Evergrande could trigger a new global financial crisis.



The current upward section of the trend still does not cause any doubts. The wave pattern was refined after the instrument made a successful attempt to break the maximum of the assumed wave 3. Now the whole picture looks like a completed five-wave impulse upward trend section, which began its construction on July 20. The departure of quotes over the past three weeks from the reached highs may mean the end of the expected wave 5, which in this case turned out to be shortened. At the moment, I'm leaning towards this option. There is no alternative option at this time since the instrument does not even try to start a new upward wave. Thus, now I expect either a further collapse in the quotes of the instrument (if the news background matches or the market starts to panic) or the construction of an upward corrective wave b, after which the decline will also resume with targets located below the low wave a. That is, below the $ 41,469 mark. As you can see, there is no smell of $100,000 in 2021.





Chin Zhao
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Technical Analysis of BTC/USD for December 7, 2021

Crypto Industry News:
The Republic of El Salvador bought 150 Bitcoins in its worst bear market since BTC hit a record high of almost $ 68,000 in the first week of November.

Salvadoran President Nayib Bukele announced the purchase of 150 BTC as the market price temporarily fell below $ 50,000 last weekend after losing more than 15% of market value.

While the Bukele government was able to buy at $ 48,670 per coin, the Bears temporarily lowered Bitcoin's price to almost $ 42,000 after a drop of more than 37%, from a record high.

Thanks to this purchase, El Salvador's Bitcoin reserve now amounts to 1,270 BTC, which at the time of writing is worth nearly $ 60.3 million. Earlier, the president announced the purchase of 420 BTC on October 28 during a temporary bear market.

The Salvadoran plan includes withdrawing unrealized US dollar BTC gains to finance various development projects while maintaining the overall value of the central reserve.


Technical Market Outlook
The BTC/USD pair has retrace 61% of the last wave down as the bulls hit the level of $51,545. The next technical resistance is located at $53,333. The immediate technical support is seen at $49,720. The momentum is picking up from the oversold conditions, currently hovering around the level of fifty on the RSI (14) indicator. Despite the recent complex and time consuming corrective decline in form of ABCxABCxABC pattern, the larger time frame trend remains up.

Weekly Pivot Points:
WR3 - $75,308
WR2 - $67,229
WR1 - $57,614

Weekly Pivot - $49,717
WS1 - $40,054
WS2 - $31,972
WS3 - $22,000


Trading Outlook:
The ABCxABCxABC complex corrective cycle might be terminated at the level of $41,678 and the market is ready to continue the up trend. According to the long-term charts the bulls are still in control of the Bitcoin market and the next long term target for Bitcoin is seen at the level of $70,000. This scenario is valid as long as the level of $39,474 is clearly broken on the daily time frame chart (daily candle close below $39,000 would be considered as a long-term trend change due to the lower low placement).








Sebastian Seliga
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Technical Analysis of ETH/USD for December 7, 2021

Crypto Industry News:
Ethereum co-founder Vitalik Buterin outlined his vision of a "possible roadmap" for Eth2, outlining a future where the largest smart contract platform can scale up while meeting high standards of distrust and censorship resistance.

In today's post titled "Endgame", Buterin presented a thought experiment on how an average large Blockchain - defined by very high block frequency, large block size, and thousands of transactions per second - can be considered censorship-proof enough and not trust-based. The obvious trade-off for this level of scalability is the centralization of block production. Buterin's solutions, featured in the blog post, do not solve the centralization problem, but still provide an implementation plan.

Regarding the solutions, Buterin suggested a "second layer of low-resource staking" to validate distributed blocks. "Introduce anti-fraud or ZK-SNARKS protection to allow users to check block validity directly (and cheaply)" directly, and "introduce data availability sampling to allow users to check block availability [and] add secondary transaction channels to prevent censorship."

With these updates, "We get a chain where block production is still centralized, but block validation is non-trust-based and highly decentralized, and specialized anti-censorship magic prevents block makers from being censored," explained Buterin.

The co-founder of Ethereum concluded that there is a high probability that block production will remain centralized, regardless of the scalability path that the network is taking.


Technical Market Outlook
The ETH/USD pair has broken through the trend line resistance seen around the level of $4,300 and made a new local high at the level of $4,430 (at the time of writing this analysis). The next technical resistance is located at $4,435 and $4,557. The immediate technical support is seen at $4,257. Despite the recent complex and time consuming corrective decline in form of ABCxABC pattern, the larger time frame trend remains up. The H4 time frame RSI indicator is showing an increase in momentum above the neutral level of fifty, which supports the short-term bullish outlook for ETH.

Weekly Pivot Points:
WR3 - $6,154
WR2 - $5,472
WR1 - $4,817

Weekly Pivot - $4,100
WS1 - $3,475
WS2 - $2,785
WS3 - $2,131


Trading Outlook:
The ABCxABC complex corrective cycle might be terminated, so the next long-term target for ETH is seen at the level of $5,000. Nevertheless, in order to continue the long-term up trend, the price can not close below the technical support at the level of $2,906. The level of $1,728 (61% Fibonacci retracement of the last big impulsive wave up) is still the key long-term technical support for bulls. The level of $3,677 is the key mid-term technical support for bulls.








Sebastian Seliga
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Has Bitcoin started a new rally or is this just a counter trend bounce after the weekend selloff?

Bitcoin bulls have managed to recapture the $50,000 price level after making a low close to $41,000 over the weekend. Volatility has spiked once again as price plummeted during the weekend only to find support around $40,000 and the 61.8% Fibonacci retracement which was our 2nd target.



Black lines- Fibonacci retracements

Resistance is now found at $53,000 which was previously key support. Bulls need to break above this level in order to continue higher. Price has made a long lower tail on Saturday implying support is strong above $40,000. Bears need to break below $41,000 in order for prices to fall further towards $30,000. On the other hand bulls need to start making higher highs and higher lows. For now price has formed a higher low at $41,642 relative to the $29,000 low back in July. Longer-term trend remains bullish as price continues making higher lows and as long as price is above $29,000.





Alexandros Yfantis
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Ripple false breakdown with great separation

Ripple is fighting hard to recover after its amazing sell-off. XRP/USD registered a 51.68% drop from 1.3494 higher high registered on November 10, 2021, to 0.6520 Saturday's (December 04, 2021) low.

At the moment of writing, the crypto was trading at 0.8235 and it seems undecided. In the last 24 hours, XRP is up by 3.34%. In the short term, it could move sideways trying to accumulate more bullish energy. Technically, after its massive drop, Ripple could develop a new fresh swing higher. Still, it's premature to talk about a new leg higher as long as the crypto stands below strong upside obstacles.


XRP/USD down channel



As you can see on the H4 chart, the price of Ripple registered only a false breakdown with great separation below the down channel's downside line and under the Descending Pitchfork's median line.

Now, it's trapped between 0.8642 and 0.7428 levels. It has failed to stay above the 0.8295 pivot point, so a potential decline is favored as long as it stays under this level. A sideways movement followed by a valid breakout through the downtrend line could announce an upside reversal.


XRP/USD outlook

Ripple could drop again after its failure to stabilize above the weekly pivot point or to approach and reach the 0.8642 former high. A temporary decline could help the buyers to catch a new upwards movement.

As long as it stays above the 0.7428 static support, XRP/USD could still give birth to a strong upwards movement. A new higher high, a bullish closure above 0.8642 could signal an upside continuation.





Ralph Shedler
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Bitcoin: digital gold will cost $100,000, but now with a shifted schedule, and not in 2022, but in 2023



Bitcoin bull and InTheMoneyStocks chief market strategist Gareth Soloway predicted that bitcoin would still hit the $100,000 milestone, but said it could reach that level in 2023.

The analyst stated that bitcoin is still ready for a further pullback, after which the price will enter an even more difficult period, which may last until 2023.

According to Gareth, back in August, he predicted that the price of bitcoin would fall to $20,000, indicating an "unconditional" rise in bitcoin.

"One of the things I was talking about is that bitcoin will eventually reach the $18-20,000 mark. I really have no questions," he said. He also warned people against buying before the April highs in October, citing this as a possible landmine.

Be that as it may, the crypto community is coming to terms with its failed bitcoin price forecast after almost all of their bullish quarter forecasts continue to fade into oblivion.

Their forecast was broken after the market went into a frenzy of short selling on Saturday morning, causing bitcoin to fall below $43,000, which nevertheless became its biggest sell-off in more than four months.

Willy Woo temporarily postponed his forecasts that the asset will reach $100,000 by the end of the year, citing many factors, including Omicron's fear and possible whale counterfeiting on major exchanges.

Bitcoin fell almost 5% on Monday as the start of the week gave no respite to the world's largest cryptocurrency after a tiring weekend when at one point it lost more than one-fifth of its value.

As a result of the debacle, the bitcoin price and the amount invested in bitcoin futures returned to where they were at the beginning of October, before a massive price spike occurred on November 10, as a result of which the token reached an all-time high of $69,000.

Traders said the weekend's drop was due to a broad shift away from riskier assets in traditional markets due to concerns about the Omicron coronavirus variant combined with lower trading liquidity, which tends to hit cryptocurrencies over the weekend.

"The leverage markets have been completely reset, and the open interest in the leverage markets has been completely reset."

Over the weekend, when prices fell, investors who bought bitcoins by margin saw exchanges close their positions, which caused a cascade of sales. According to Coinglass, on Saturday, a number of retail-focused exchanges closed long positions on bitcoin worth more than $2 billion.

Ether, the second largest cryptocurrency in the world, was also affected on Saturday, although not as much. However, it fell 5.5% to $3,965 on Monday, compared with a November 10 high of $4,868, although it rose compared to a larger competitor.






Vitaly Kolesnikov
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Is Bitcoin waiting for a V-shaped recovery?


On Tuesday evening, Bitcoin looks technically very good, which is especially pleasing.

According to Santiment, analytical data on the main cryptocurrency show that the recovery, during which Bitcoin rose to $ 52,000 per coin, is associated with calls in social networks to "buy the dip."

Buy the dip or Dead cat bounce?

Details:
Buy the dip - purchasing an asset after it has dropped in price
Dead cat bounce - small, brief recovery in the declining price

Earlier, Bitcoin's daily recovery is 5.86%. And although this is very good after a 20% decline over the weekend, everything is not so technically clear: the price is again at a fork.

On Monday, two possible scenarios were discussed: a pullback to the area of $ 52,000 - $ 53,000 per coin and a breakdown of the support at $ 48,000. The first one was realized.

Now, there is a new fork, and it is more important this time since we are talking about breaking through the border separating the bear market from the bull market.

Here, two scenarios can also be considered: a decline and transition to lateral dynamics within the range of 48,000 - 52,000 dollars, or breakdown of the zone of 52,000 - 53,000 dollars and consolidate higher.

We can talk about a V-shaped recovery in the second case. But in the meantime, there is a risk that the current recovery will be a "dead cat bounce or a small, brief recovery in the declining price."


What caused the market to collapse?
Santiment reported that renewed fears related to the COVID-19 pandemic among larger market participants could be one of the reasons for the collapse of cryptocurrencies. Apparently, the broad market sell-off was caused by profit-taking by institutional market participants.

Reports show that institutions sold over $500 million worth of Bitcoin, which caused an "aggressive liquidation" in the crypto derivatives market, which led to a drop.

In addition, the company explained the large long shadow on the Saturday afternoon candle by the fact that a large number of users began to redeem this drop.


But what about the ambitious goals for Bitcoin's growth?
In November, JPMorgan analysts updated in their analytical review the Bitcoin price forecast by $146,000 per coin in the long term. These goals were calculated with the expectation that the volatility of the cryptocurrency would fall and institutional investors would prefer BTC instead of gold.

Then analysts led by Nikolaos Panigirtzoglou showed that they see Bitcoin as a scarce product that increasingly competes with gold for investors' preferences as a hedge against inflation. They argued that gold has not responded to increased concerns about inflation in recent weeks, which is at a 13-year peak in the United States and is rising sharply around the world.


New threats
However, another factor has appeared on the market. Rising inflation requires the Fed to tighten monetary policy. According to some experts, the curtailment of quantitative easing, the rise in the cost of money may become the external factor that will put pressure on risky assets, including cryptocurrencies.

Therefore, the expectation of hawkish actions from the Fed may not let Bitcoin go higher yet. This is one of the reasons why the well-known stock-to-flow (S2F) cryptanalyst PlanB model has stopped working.







Ekaterina Kiseleva
Analytical expert of InstaForex
© 2007-2021