Cryptocurrency Analysis

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Bitcoin: Bullish Uptober or Dead Cat Bounce?

After a sharp rise on Friday, bitcoin moved to consolidation, stuck below the resistance level of 48,178.13, marked with a red dotted line.

The formation of a trade after a two-day growth from $40,000 to $48,000 is quite logical. From a technical point of view, the situation looks ambiguous, and, as noted in Friday's review, there are two options for the development of events. The first is a rebound from the level of 48,178.13 downward. The correction depth can reach the nearest support 44,807.24. The second is a consolidation above the horizontal at 48,178.13 and an increase in the resistance area of 52,000.18 - 52,929.15.

How to interpret the recent rise in BTC

This situation has one "but." While some market participants are tuning in to a successful bullish quarter and Uptober, others are plagued by vague doubts about whether Friday's rally was a "dead cat bounce."

A "dead cat bounce" in financial markets is a short-term recovery after a long recession. It always appears as a small rally after an extended downtrend. At first, a rebound in price appears to be a reversal of the dominant trend, but it is soon followed by a return to a downtrend in price.

According to analysts, the cryptocurrency market has seen many such dead cat bounces. A closer look at the net flows of bitcoin over past cycles has shown that such price spikes have historically had a consistent pattern.

Estimating the probability of a "dead cat bounce"

For this, the difference between the inflow and outflow of the coin is estimated - Exchange Netflow. The value will be negative when outflow prevails, and vice versa. If negative values persist, then buyer pressure is implied, which, as a rule, is optimistic for the price.

However, it has been observed that very positive Exchange Netflow values are accompanied or coincide with periods of dead cat bounce formation. The trend was noted in 2017, 2018, and then in 2019, when inflows dominated the Bitcoin chart.

Some have noted that the peak that formed after the May all-time high was actually a dead cat bounce, as evidenced by very positive net flow values.

However, this time, net flows are sharply negative, and the trend is similar to the cycle of 2017 when outflow prevailed and negative net flows influenced the price. Thus, it seems that the theory of "dead cat bounce" is not yet our case in the situation with the "Uptober", given the current negative net flows.

So, as outflows continue to dominate, meaning long-term holders are withdrawing more and more bitcoins for storage, the supply-demand curve for BTC points to an optimistic outlook.







Ekaterina Kiseleva
Analytical expert of InstaForex
© 2007-2021

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Trading Signal for Bitcoin for October 04 - 05, 2021: Buy if it rebounds at 45,250 (EMA 200)




The price of Bitcoin is consolidating above the SMA of 21 located at 47,424. As long as it remains above this level, it is likely to continue the bullish movement and could reach the psychological level of 50,000 in the short term.

After 10 days of consolidation at the psychological level of 40,000 (from September 20 to September 30), we saw an accumulation of a trading volume. You can see that the eagle indicator has reached 5 points. Now the moving average is at the top around 95, which is a sign of overbought conditions and an imminent downward correction.

After the break of this price range, BTC overcame several barriers that have now become its immediate support. Besides, the EMA of 200 is located at 45,259. If the price makes a correction towards this level, it will be a good opportunity to buy with the target up to 48,437 (7/8) and up to the psychological level of 50,000 (8/8).

Only a consolidation below the 200 EMA will confirm the bearish signal of the eagle indicator. Meanwhile, each time BTC makes a correction towards 45,250, it will be an opportunity to continue buying.


Support and Resistance Levels for October 04 - 05, 2021
Resistance (3) 50,000
Resistance (2) 49,178
Resistance (1) 48,319

Support (1) 46,875
Support (2) 46,051
Support (3) 45,312


Trading tip for BTC for October 04 - 05, 2021

Sell below 47,420 (SMA 21) with take profit at 45,250 (EMA 200), stop loss above 48,435

Buy if it rebounds at 45,250 (EMA 200) with take profit at 47,500 and 50,000 (8/8), stop loss below 44,500.





Dimitrios Zappas
Analytical expert of InstaForex
© 2007-2021

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How to use bitcoin technical indicators to forecast beginning of upcoming bullish rally

After consolidating the whole previous week, bitcoin made a huge jump and rose to $47,500 during the weekend. In just a few hours, bitcoin gained $3,000 and continued its bullish rally, which initially surprised the market. At the end of the weekend, BTC approached the important resistance level located at $48,000 and stopped there. At the same time, bitcoin's network activity continues to grow and major players are increasing the rate of coin accumulation. All above indicates bitcoin's bullish rally and price growth. However, in order to predict the next period of growth of the quotes, it is necessary to use technical indicators that show the potential trend of the price.

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

Price consolidation is a period when a certain cryptocurrency is trading within a narrow horizontal price channel.

The Relative Strength Index (RSI) is a technical indicator that shows the strength of the trend (downward or upward) and alerts you to possible reversals in the price trend. This metric is used to evaluate overbought or oversold conditions in the price of an asset. The optimal reading for the indicator is 60 if we consider a bullish trend. It indicates a high demand for the asset and the strength of the current upward momentum. If the asset exceeds this reading, it steps into an overbought zone.

MACD (Moving Average Convergence/Divergence Index) is an indicator that helps draw certain conclusions about the trend based on the moving averages and finding metric values between them. The usual bullish signal is when the white line crosses under the red line and the bearish signal, on the contrary, when the white line from above crosses the red line, indicating a downward movement.

The stochastic (stochastic oscillator) indicates the strength of the momentum of the current prevailing trend. If the indicator's reading is above 80, the asset can be considered overbought, but if the stochastic is below 20, it is a signal that the asset is oversold.

The most convenient tools to determine the further bitcoin price trend are technical indicators on horizontal charts. Over the past 24 hours, BTC remained almost unchanged in price and is trading near the $48,000 where the resistance is located. This suggests that as of 3:00 pm, the asset has exhausted its bullish momentum that was seen since Friday. The main factor for this is the achievement of the resistance level, which prevents the price from going up. The absence of a visible drop or a rise indicates a local pause and consolidation. Bitcoin has risen sharply enough, and the coin is stabilizing to avoid sudden price changes. At the same time, the main market participants continue to buy the available volumes of coins on exchanges, thus eliminating additional pressure on the price. That is, we are watching a consolidation and price stabilization, which is likely to be followed by the rapid growth of bitcoin quotes.

The current situation is ideal to analyze the BTC technical indicators to predict the further trend pattern. Let's start with the hourly chart, where sideways price movement is seen and a bearish triangle pattern was formed. Bitcoin was trading in a narrow range, after which bulls tried to push the price higher, but encountered increased resistance, which resulted in the formation of a triangle promising a price decline. However, the bearish pattern was broken. After that, the price went up again and resumed its consolidation. Notably, the technical indicators do not show a unified picture of what is happening to the trend. The MACD indicator is oscillating in the red area along with the zero level, which signs an absence of bullish momentum. The RSI shows a similar trend, which is located at the level of 45 and is oscillating near it. The stochastic oscillator, on the contrary, formed a bullish cross and is moving towards the 60 mark, and may break the narrow fluctuation range. However, we need to analyze other charts to confirm this.



On the 4-hour chart, there are no signs of new upward momentum. On the contrary, indicators declined after the bullish rally and are beginning to stabilize, which reflects what is happening on bitcoin charts. The MACD indicator begins to decline after forming a bullish crossover, failing to make an upward momentum. The stochastic oscillator was declining, but eventually, it managed to make a reversal and is now moving sideways, indicating recovery and a lack of market players' action. The RSI fell to the safe reading located at 65 and is moving along it. Overall, the situation reflects an accumulation and a recovery of indicators after a long growth. At the same time, there are visible prerequisites for the continuation of the upward trend, which should be confirmed on the daily chart.



Finally, the indicators of bitcoin's daily chart represent a conclusion of all previous analyses, where there are no unified dynamics of the price trend. We can see the inconsistency and weakness of new attempts to develop a bullish momentum, which allowed BTC to reach $47,500. The MACD indicator has formed a bullish crossover, but it is moving sideways in the red area with no signs of breaking through the zero level. The stochastic oscillator and the RSI indicator lost their upward momentum and continue to decline below the level of 60. Despite local signals of weakening, the price may rise sharply, but if the market situation remains stable, bitcoin is likely to continue its recovery within a narrow range for at least one more day. The daily chart helps to monitor the possible breakout of this range, and, most likely, it will happen at the end of the current trading day.








Artem Petrenko
Analytical expert of InstaForex
© 2007-2021

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Short-term analysis on XRP/USD.

XRP/USD has reversed its down trend from the 61.8% Fibonacci retracement at $0.85 and is now making higher highs and higher lows. Bulls seem in control of the short-term trend and there is potential for a bigger trend change if bulls continue to push price higher above $1.23 and $1.42.



Blue rectangle- horizontal support zone

XRPUSD has so far made a high at $1.0890 and is now pulling back. Price has so far tested the horizontal support zone as shown in the 4 hour chart above. So far price respects the support and we might see another leg higher. As long as price is above the support at $1-$0.98 we expect price to move higher towards $1.20. If support fails to hold, we should not be surprised if XRP/USD makes new lows below $0.85.




Alexandros Yfantis
Analytical expert of InstaForex
© 2007-2021

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BTC analysis for October 04,.2021 - Bearish divergence in the momentum

Technical Analysis:




BTC has been trading downside and I see further bearish continuation.


Trading recommendation:
Due to the bearish divergence in the momentum and test and reject of the strong pivot level at $48,800, I see further downside movement.

Watch for selling opportunities on the rallies with the downside targets at the price of $45,200 and $44,420.

Stochastic is showing bearish divergence in the background.





Petar Jacimovic
Analytical expert of InstaForex
© 2007-2021

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Technical analysis for Bitcoin



The previous week managed to confirm and strengthen the rebound from the encountered accumulation of support levels. This became possible due to the consolidation above the zone, which is formed by associations of different levels. So, for example, it is possible to designate and highlight the areas of 46182.11 - 46960.39 (weekly Tenkan + weekly Kijun + monthly Tenkan); 44901.61 - 44318.86 (daily Tenkan + daily Kijun); 43068.05 - 42757.59 (upper border of the weekly cloud + weekly Fibo Kijun + daily Fibo Kijun) and 41532.34 - 41028.86 (monthly Fibo Kijun + lower border of the daily cloud).

These accumulations of levels currently retain the role of supports, and as before, they will try to defend the bullish interests when interacting and testing. Today, the current attraction on the daily timeframe continues to resist the upper border of the daily Ichimoku cloud (48000.61). Consolidation in the bullish zone relative to the daily cloud will set the following tasks for the bulls – breaking through the weekly dead Ichimoku cross (51163.17) and updating the maximum extremum (43127.98).



The main advantage in the smaller timeframes continues to be on the bulls' side. However, the price has been in the correction zone for a long time, and bearish traders were able to consolidate below the central pivot level of the day (48319.73) today. It should be noted that another decline will lead to testing of the key level – the weekly long-term trend (45772.46). The nearest support on this path can be noted today at 46633.98 (S2).

In turn, the breakdown and reversal of the moving (45772.46) will change the current balance of power in the same timeframe. In this case, it would be better to re-evaluate the situation and prospects. The interests of the bulls may be represented by the resistance levels of 48319.73 - 49178.48 - 50005.48 - 50864.23 (classic pivot levels).


Ichimoku Kinko Hyo (9.26.52) and Kijun-sen levels in the higher time frames, as well as classic Pivot Points and Moving Average (120) on the H1 chart, are used in the technical analysis of this cryptocurrency.






Evangelos Poulakis
Analytical expert of InstaForex
© 2007-2021

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Nigel Green, CEO and founder of deVere Group, is confident that bitcoin to worth $100,000 by end of year, and four key factors are reason for it




Bitcoin is gaining traction, and it seems likely that no regulators or governments will be able to stop it. Many analysts start to summarize and predict bitcoin's rise to $100,000 by the end of this year. The key factors that determine the top cryptocurrency's upward growth have been taken into consideration.

Nigel Green, CEO and founder of deVere Group, is bullish on digital gold and confident that bitcoin will hit $100,000 by any means.

This prediction marked a phenomenal rise in digital gold over 10% per day on Friday.

Today, bitcoin is trading at $47,700. Besides, Nigel Green believes that it will not only resume its all-time high of $65,000 by the end of the year, but also climb to $100,000.

If the current momentum remains the same, nothing can stop bitcoin from hitting $100,000. It will be a really all-time record.

Nigel Green is convinced that there are key aspects that may be catalysts for such bitcoin's sharp rise.

The first catalyst is likely to be Jerome Powell and the Fed's announcement that they will not ban bitcoin and give it a chance for gaining. Moreover, the Central Bank is of crucial importance in this aspect.

It is possible that other altcoins will be tightly regulated, which may affect a long term and positive trend for the crypto market. However, bitcoin will be regarded more leniently, as the digital gold's status is similar to gold.

The second factor is accelerated regular demand for bitcoin among institutional investors. Wall Street corporations and various global top companies are turning their attention to bitcoin and buying it into their assets. Besides, they allow clients to pay for their goods and services with bitcoin.

The third factor is likely significant support of highly influential individuals, crypto-enthusiasts and long-time whales. Such iconic figures as Jack Dorsey, Michael Saylor, Ilon Musk and Katie Wood make very frequent statements concerning bitcoin that constantly serve as a catalyst for its growth. They believe that the top cryptocurrency accounts for the global future.

Moreover, every bitcoin's decline is followed by a surge. The data are accurate, considering the past. Every double bitcoin reduction is followed by its significant upward movement.

After there was the halving of bitcoin in 2012 and 2016, prices went up 55 and 15 times. Now it is possible to believe that bitcoin will resume this jump due to its contraction in 2020.

Institutional investors favour bitcoin as it is decentralized and does not depend on the Fed, the Securities and Exchange Commission, or the leading world powers.





Vitaly Kolesnikov
Analytical expert of InstaForex
© 2007-2021

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Trading plan for Bitcoin for October 04, 2021




Technical outlook:
Bitcoin has raised through $49,000-200 mark as discussed and expected, over the weekend. The crypto has taken out its initial resistance around $48,000-49,000 zone. Most traders might be inclined to book profits now as price could pullback towards $42,000-43,000 mark in the next few trading sessions. It could provide yet another opportunity to initiate long positions.

Bitcoin has now carved a meaningful bottom just below $40,000 mark and is expected to stay above that level going forward. Immediate price resistance is now see at $53,000, while support is strong around $40,000 level respectively. Bears might remain poised to drag prices towards $42,000-43,000 zone before giving in to bulls.

The recent boundary which could be worked upon is between $40,800 and $49,200 respectively. A retracement towards the $42,000-43,000 mark could find bulls coming back in control. If the above structure unfolds accordingly, Bitcoin could be on its way towards $65,000 and higher thereafter.


Trading plan:
Potential buy around $42,000-43,000 again with risk below $40,000.

Good luck!





Oscar Ton
Analytical expert of InstaForex
© 2007-2021

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Bitcoin sparks speculation in El Salvador



Bitcoin sparked a wave of speculation in El Salvador since its adoption as legal tender last month.

Almost everyday, Uber drivers, waiters and shopkeepers trade cryptocurrency on their phones, buying dips and selling rallies with a government app that comes pre-loaded with $ 30 worth of Bitcoin.

The government's new digital wallet, called Chivo, was designed to facilitate Bitcoin transactions. The ease with which users can top up their balances and instantly switch between dollar and cryptocurrency makes it an ideal tool for speculation.

In fact, in the country's capital, San Salvador, many large chains such as Starbucks, McDonald's and supermarkets accept digital currency for shopping. Some smaller businesses also accept it. Electronics store owner Santos Enrique Hernandez said at least 10 customers a day pay in Bitcoin.

Hernandez said Chivo is faster than cash or credit cards, not to mention it allows them to speculate on price fluctuations - buy Bitcoin when its price falls, and then convert it back to dollars if it rises again. He said he made $ 12 in two days by speculating on such movements.

This master plan was arranged by El Salvador President Nayib Bukele, and is Bitcoin's biggest test in its 12-year history. A successful rollout may convince other countries to try cryptocurrency as well.



Bukele said El Salvador adopted Bitcoin as legal tender on September 7 and since then, more than 2 million citizens registered to Chivo. The free $ 30 Bitcoin is equivalent to roughly 8% of the minimum monthly wage.

But many Salvadorans bailed as soon as they could, converting their free Bitcoin into dollars via one of the 199 Chivo ATMs installed across the country. There used to be 200, but one was burned in an anti-government protest.

To promote acceptance, the free $ 30 Bitcoin comes with the condition that it will be used in a transaction before it can be converted into cash. As a workaround, Salvadorans send Bitcoin to a relative, who then sends it back, thereby lifting the blockage.

And with more than 2 million Salvadorans living in the United States, remittances account for over 20% of the country's GDP. Bukele cited the reduction in transfer fees as one of the main benefits of Bitcoin.

Valeria Vasquez, an analyst at Control Risks, said the adoption of Bitcoin as a legal tender is a big risk for El Salvador. She said Bukele did it because he wants to change the constitution in order to gain approval and be re-elected as president.

The launch of Bitcoin and Bukele's decisions to fire judges and an attorney general prompted a rally last September 15. Another protest is expected to commence on October 12.






Andrey Shevchenko
Analytical expert of InstaForex
© 2007-2021

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El Salvador started mining Bitcoin using the volcano's energy




President Nayib Bukele announced that El Salvador has mined a small portion of its first Bitcoin for the first time since the official adoption of the cryptocurrency as legal tender by using energy obtained naturally through geothermal energy generated from volcanoes.

According to the press release, the mining project has currently generated 0.00599179 BTC and is managed by the state-backed LaGeo SA de CV. However, this is a small figure, which is approximately equivalent to 287.34 US dollars (or 212.14 pounds sterling).

President Bukele shared the total amount of mined bitcoins in his tweet, noting that it is not yet one whole bitcoin. The tweet has a section called "pending payment", which lists separately from the number of bitcoins received as a result of mining.








Irina Yanina
Analytical expert of InstaForex
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