Cryptocurrency Analysis

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Crypto market update for December 9, 2021



Analysts hope the uptrend continues

Bitcoin is slowly rising from its lows as of December 3. Its price movements look the following way: BTC plunges within 2 days and bounces from its lows, increasing by $7,000. Then, the digital asset adds another $2,500 within 4 days. Generally speaking, the flagship cryptocurrency keeps recovering after a $27,000 plunge. It could be the formation of wave (b) as part of a new downtrend section, but we will talk about waves a bit later. I'd like to point out that many crypto analysts still believe that the uptrend continues. Earlier, they expected Bitcoin to touch the $100,000 mark by the end of 2021. Now they say it will happen in early 2022. It is still very difficult to say what such predictions and conclusions are based on. Not so long ago, well-known analyst PlanB, whose Stock-to Flow model predicted all significant movements in Bitcoin in recent years, failed, and the target of $98,000 was not achieved. I think any model can fail, so you always need to hedge yourself and consider alternative options.


Glassnode: BTC correction did not trigger a sell-off among long-term investors

Not so long ago, Glassnode, a blockchain data and intelligence provider, concluded that long-term investors would save the uptrend. According to various estimates, they boast up to 81% of all coins in their wallets. So, long-term investors (those who hold coins for over 180 days) were not involved in the current correction, the company said. In other words, Bitcoin fell by $27,000 only due to short-term and small investors. If so, I'd like to ask one question. What is the point in assessing the potential of the trend by the number of long-term investors and coins in their wallets, if they still cannot avert a fall in Bitcoin? Most of the coins are held by large investors and the cryptocurrency can still tumble in price by a third within one month.

Another analytical company, Coinglass, reports traders lost about $1 billion on Saturday night when the cryptocurrency dipped to $42,000. In total, about 400,000 positions were closed on margin requirements across the entire cryptocurrency market. So, no matter how strong the positions of large investors and long-term investors are, Bitcoin is not immune from steep falls.



The current uptrend structure still looks clear. The wave layout cleared up after the instrument went above the high of supposed Wave 3. On the chart, there is now an impulsive 5-wave structure that began to form on July 20. However, over the past three weeks, the price has been pulling back from the highs, indicating the completion of Wave 5, which looks shorter. After plummeting by $27,000, the quote went up. So, these two sections could be waves (a) and (b) of the new corrective downtrend section. Therefore, the price is likely to rise within wave (b) with targets at around $52,077 and $55,295, in line with the 38.2% and 50.0% Fibonacci levels from wave (a). After the completion of this wave, a new descending wave (c) may start to form, with its low being well below the $41,700 mark.





Chin Zhao
Analytical expert of InstaForex
© 2007-2021

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Ethereum downside seems over


Ethereum was trading at 4,392.14 level at the moment of writing, below today's high of 4,491.99. ETH/USD registered a 29.45% growth from 3,470.02 Saturday's low to 4,491.99 today's high. The crypto erased some of its losses signaling that the downside is limited and that the price could come back towards the 4,842.65 all-time high.

In the short term, a temporary correction was expected. The price action signaled that the downwards movement is over, so we could search for new long opportunities. In the last 24 hours, ETH/USD is up by 0.39% but it's still down by 3.29% in the last 7 days.


ETH/USD Under Critical Resistance!


As you can see on the H4 chart, Ethereum registered a false breakdown with great separation below the 50% and 61.8% retracement levels, under the lower median line (LML), and through the warning line (WL1). Also, its failure to stabilize under the 3,958.67 signaled that the downside movement ended.

It has retested the 3,958.67 registering a new false breakdown with great separation belwo this obstacle and now is traded above teh 23.6% retarcement level. The warning line (WL1) of the descending pitchfork's stands as a dynamic resistance.


ETH/USD Outlook!
Stabilizing above the 23.6% (4,345.45) retracement level and making a valid breakout through the warning line (WL1) could announce potential upside continuation at least towards the 4,842.65 historical high.

In the short term, the pressure remains high, we cannot exclude a temporary decline. ETH/USD could come back to test and retest the upper median line (UML) trying to accumulate more bullish energy before jumping higher.






Ralph Shedler
Analytical expert of InstaForex
© 2007-2021

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Visa launches crypto consulting services. How crypto hearing in US may affect BTC?

Bitcoin began rising after a drop that took place on Saturday. The currency news flow is pushing BTC higher. In addition, Visa announced its intention to create the crypto services that will allow ordinary people to use cryptocurrencies. Thanks to the positive news, BTC consolidated above $50K. This is the first step towards its full recovery.

At 12:30, the asset was trading around $50.1K, thus providing bullish signals and pointing to the confident bullish position in the market. Fundamental factors are also supporting BTC. Thus, Visa said that it would create new consulting and advisory services to help its clients navigate the world of cryptocurrencies. In the future, this may significantly expand the use of digital assets, and, first of all, the use of bitcoin in everyday operations. In addition, the payment giant will give advice to financial institutions and retail investors regarding the introduction of cryptocurrency functions and the use of NTF tokens.

In fact, this is positive news to the whole crypto market. However, I would like to focus on its influence on bitcoin in the long term. It is quite possible that BTC will attract additional investments from institutional traders. In addition, the number of retail traders may also jump to the levels recorded in 2019-2020. In the short term, the news may encourage market participants. However, the positive effect could be offset by the results of the hearing in US Congress called "Digital Assets and the Future of Finance".

On December 8, the fear and greed index was at the level of 28. Thus, the market is likely to react to the hearing. There are two possible scenarios. If two sides come to a conclusion, the market will show an impulsive rise. It may even advance to the level of $58K. It is hard to predict a further price movement since it may drop after the impulsive rise. In this case, there are two scenarios. According to the first one, BTC will drop to $55.7K, touching the 0.5 Fibonacci level. After a short-lived consolidation, the asset will resume growing to $60K. According to the second scenario, the price will fall deeper to $52.6K, the 0.618 Fibonacci level. In this case, the price will be within the correctional channel and under the pressure from the downward resistance line.





If the hearing has a negative result, BTC may break $45K and trade between the levels of $40K and $45K. Then, it may either break $40K and slide to $35K-$40K or it may jump to $45K-$50K. This second scenario is really good for the bullish market since speculative activity will drop to zero and liquidity will boost BCT to new highs.



It is most likely that results of the hearing will affect the main cryptocurrencies. In addition, Jerome Powell's speech may also influence bitcoin. Thus, on December 8-9, the first cryptocurrency could be extremely volatile.






Artem Petrenko
Analytical expert of InstaForex
© 2007-2021

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Decentralization in DeFi is illusion

Bitcoin and Ethereum have stabilized after a major sell-off at the end of last week. Ethereum is even gaining strength and is likely to make a new all-time high by the end of this year.

Recently, the Bank for International Settlements said it was concerned about the "illusion of decentralization" in DeFi. Notably, DeFi is a fast-growing part of the crypto market that provides traditional financial products without intermediaries, such as banks. Against this background, regulators in many countries are increasingly concerned about the emergence of new platforms offering DeFi services that may not be as 'decentralized' as advertised.



The Bank for International Settlements noted that the decentralized aspect tends to be illusory. "There are some incentive issues related to the fact that, through this decentralization, at some point, you end up with some agents that play an important role, and not necessarily for the best [interests] of users of financial services," general manager the bank said. However, what exactly was talked about was not fully stated. The BIS said DeFi needs to be "properly regulated" to protect investors and increase market confidence.

Meanwhile, the cryptocurrency community has reacted to such allegations, noting that DeFi has its problems, but that significant progress is also being made. Many platforms in the field are already addressing some of the systemic issues highlighted in the BIS report. The expert said that DeFi could indeed benefit from working within the new regulatory framework set up to protect investors and maintain access to markets. It is worth noting that many DeFi services are now based on Ethereum. According to research firm The Block, DeFi's Ethereum-based protocols currently account for more than $100 billion. The biggest platforms are Maker, Curve, and Compound. DeFi websites attract investors with promises of huge profits on their deposits. But many people become victims of hackers and scammers. According to analyst firm Elliptic, more than $10 billion was lost to DeFi fraud and theft in 2021.

The BIS also noted that the risks associated with DeFi are currently limited to the cryptocurrency markets. However, if this industry develops in the future, the growth of DeFi will create problems for financial stability and the economy as a whole.



Bitcoin's technical picture

A return to $50,220 gives hope for the first cryptocurrency to continue rising at the end of the year. The main goal for the buyers is now the growth to the level of $53,190 and its breakthrough. Breaking beyond it will ensure a good recovery to $55,930, and then it will be easy to reach $59,400, which will end the fall of the cryptocurrency on December 3. The pressure on BTC will resume after it breaks through $46,900, which will lead prices to $42,300.



Ethereum's technical picture

The bulls are trying to reach the level of $4,404, the break-up of which will push the interest of the buyers towards $4,647, and there will be a historical high of $4,860. A good support and area where large buyers will show themselves is $4,140 level. It is the one I recommend to rely on. A break-up of this area will obviously create problems for the traders, which will push Ethereum to $3,912 and quite possibly increase pressure all the way up to a test of $3,680. It is a bad signal for the end of this year.






Jakub Novak
Analytical expert of InstaForex
© 2007-2021

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Technical Analysis of BTC/USD for December 9, 2021

Crypto Industry News:
Icelandic national electricity company Landsvirkjun has limited the amount of power it will provide to certain industries, including Bitcoin miners.

A representative of the energy company informed that he had been forced to reduce energy allocations, among others for Southwestern BTC miners due to power plant problems such as low water levels and access to energy from an external supplier.

The country has long attracted mining activities due to the abundance of geothermal energy that is sourced to create cheap and plentiful renewable energy. But from Tuesday until further notice, any new electricity orders from mining operations will be rejected, Landsvirkjun said.

Canadian Hive Blockchain Technologies, Genesis Mining and Bitfury Holding are the three major Bitcoin mining companies that have opened their facilities in Iceland.

For almost a decade, miners have been trying to fulfill the promise of environmentally friendly Bitcoin mining in Iceland. In 2013, Cloud Hashing moved 100 miners to Iceland. In November 2017, the Austrian company HydroMiner GmbH raised approximately $ 2.8 million in its bid to install mining platforms directly at Icelandic power plants.


Technical Market Outlook
The BTC/USD pair has hit the level of $51,545 which is the 61% Fibonacci retracement of the last wave down and reversed lower towards the technical support seen at $49,720. The next technical resistance is located at $53,333. 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

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Technical Analysis of ETH/USD for December 9, 2021


Crypto Industry News:
On Tuesday, Google released its traditional, annual list of the most popular searches for the year, breaking them down into several categories including news, people, games, movies, and more. The major cryptocurrencies Ether and Dogecoin were included in the list of the most searched terms in the world in 2021 on Google

According to Google Trends 'Year in Search 2021', Dogecoin was the fourth most popular search term for news on Google in 2021, both globally and in the United States. The news related to the query "Ethereum Price" was in 10th place.

Cryptocurrencies are on the list of the most searched news, among topics such as Afghanistan, AMC stocks, COVID-19 vaccine, GME stocks, stimulus control and more. In 2020, not a single cryptocurrency appeared on the list.

It's worth noting that Bitcoin, the most valued cryptocurrency on the market, is not included in any of the 'Search Years 2021' category.


Technical Market Outlook
The ETH/USD pair bounce had been capped at the level of $4,435 after a Pin Bar candlestick pattern was made at the H4 time frame chart. The market reversed and is currently moving towards the technical support located 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]

Bitcoin rebounds after strong crash early this week




Bitcoin fluctuated between gains and losses on Wednesday as traders looked for direction following one of the biggest one-day sell off this year. It rose after falling 3.7% to $ 48,685 earlier this week.

Ethereum, Solana, Cardano and Shiba Inu also fluctuated, but ultimately grew yesterday during the US session.

Demand for crypto declined last weekend because skyrocketing inflation is forcing central banks to tighten monetary policy. That is why Bitcoin was down 35% on Saturday.



But digital assets are the top contender for a strong rebound in 2022, hinted by the record growths this year. And according to a survey conducted by Natixis, the total assets that respondents manage are $ 12.3 trillion.

The gloomy predictions for Bitcoin were also consistent in the past years, but most of them did not happen because the token jumped more than 5,000% in the past five years.

Bloomberg even said the recent fall in BTC prices hints at an impending rally.





Andrey Shevchenko
Analytical expert of InstaForex
© 2007-2021

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Wave analysis for BTC/USD on December 8, 2021


BTC/USD, H1 timeframe:



The first half of a downward simple zigzag is forming for the BTC/USD pair. Currently, the first part of this zigzag - wave [A] can only be noticed. This wave is an impulse pattern that consists of five sub-waves (1)-(2)-(3)-(4)-(5).

Following the end of the downward impulse [A], two parts of the upward correction [B] were formed – the initial diagonal (A) and the correction (B). Accordingly, growth in the final wave (C) should be expected in the near future. It can take the form of a 1-2-3-4-5 pulse. An approximate scheme of possible future movement is shown on the graph.

The entire correction wave [B] can be built to the level of 58410.00. This level is determined using the Fibonacci line tool. At the specified price point, the magnitude of the wave [B] will be 61.8% of the pulse wave [A]. The probability of achieving this coefficient is high.

In this case, an upward price movement is expected in the near future, which means it is worth considering opening buy deals.


Trading recommendation:
It is suggested to buy from the current level, while take profit at 58410.00.





Roman Onegin
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Bitcoin: seven drivers for cryptocurrency growth in 2022


Currently, bitcoin's consolidation corridor remains between support near $47,000 and local resistance around $52,000. The price can now reach its lower boundary, and if it holds the major cryptocurrency, an upward rebound is possible.

It is hard to predict how long the consolidation of BTC/USD will last, as well as whether bitcoin will hit $42,000 per coin again. However, it is possible to assess the catalysts that may determine the direction of the main currency in the medium term and the whole market.


SEVEN KEY DRIVERS FOR RISING CRYPTOCURRENCY MARKET

The latest cryptocurrency rally was caused by the approval of bitcoin futures ETFs and investors' decision to avoid inflation. Popular cryptanalyst Lark Davis provides seven reasons for optimism that can be considered as drivers of future growth for both bitcoin and the altcoins, following it. Let's analyze them.


1. SEC may approve spot bitcoin ETF

The US SEC has rejected spot bitcoin exchange traded funds so far. Chairman Gary Gensler attributes the rejection to concerns about market manipulation. However, the pressure on the SEC is increasing as even former lawmakers are urging the regulator to finally make a decision, as many funds, like Fidelity, are moving abroad.

Lark Davis believes a spot bitcoin ETF is likely to emerge in 2022, and until then, the market is optimistic on expectations.

By comparison, the approval of a spot gold ETF was preceded by a strong rally, followed by a year of declining prices. After that, the price resumed its growth and started a multi-year megarally.


2. Bull rally cycles become longer

Davis mentions that bull rally cycles become longer as the cryptocurrency market matures and more institutional money flows in it. Unlike previous cycles, which lasted 1-1.5 years, this cycle could last until 2022.


3. Ethereum network update

There is growing optimism about the Ethereum network changing from Proof-of-Work (PoW) to Proof-of-Stake (PoS). The expected deadline for this process is around mid-2022. Additional upgrades, such as triple halving and limited segmentation deployment, could increase the number of transactions in the Ethereum blockchain by 3-4 times.


4. Good opportunities for Ethereum competitors to grow

Ethereum competitors such as Polkadot (DOT) and Cardano (ADA) are gaining more prominence in the market. Besides, other projects such as Polygon, ETH L2, Avalanche and Solana will continue to grow.


5. NFT to further rise

Along with DeFi, non interchangeable tokens (NFTs) have attracted a lot of public attention this year. Some major global brands have been actively pursuing NFT opportunities recently. Davis believes NFTs could become the key point of access for millions of people to cryptocurrency.


6. Games and metaverse to expand

Gaming and the metaverse will likely become two of the largest industries in the next decade. Cryptoprojects operating in this area will eventually become widespread.


7. Huge capital from institutionalists is emerging to market

Finally, a major factor in the sustainability of the cryptocurrency market and growing demand is institutional interest in cryptocurrencies. With inflation steadily rising, they will have no choice but to invest in digital coins, as it is the only way to increase returns.








Ekaterina Kiseleva
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

BTC analysis for December 09,.2021 - Downside continuation in the play

Technical Analysis:




BTC has been trading downside as like I expected. There is potential for the downside movement towards next support levels.


Trading recommendation:
Due to strong downside cycle in the background ,I see potential for the downside continuation towards next reference points.

Watch for selling opportunities on the rallies with the downside objectives at $47,285 and $42,200.

Key resistance is set at the price of $52,000






Petar Jacimovic
Analytical expert of InstaForex
© 2007-2021