Cryptocurrency Analysis

[IFX_Selena]

What contributed to Bitcoin's collapse?

Bitcoin closed the previous trading week at $ 48,000, which inspired optimistic investors before the weekend. But considering the historical context, we could expect a weakening of the cryptocurrency's positions and a local pullback to support levels. This would have happened all other things being equal, but we should not rule out the fundamental factors that were not on the side of BTC, which worsened the decline of the coin this week.

When determining the further dynamics of Bitcoin's movement, it is important to take into account third-party factors that are not related to various metrics. The news background played the main role here, which can contribute to the price increase but may also be the reason for a mass sale. Bitcoin's collapse on the night of September 20 was indirectly provoked by the negative news background and contributed to the adoption of short and medium-term BTC holders of decisions to sell their coins. This is clearly visible on the fear and greed index, which fell to the level of 27.

The fear and greed index is an indicator that reflects the current sentiment of the cryptocurrency market. The value can range from 0 to 100, where the indicator 0 indicates fear, a bearish market, and a desire to sell. As for the value of 100, the market is in euphoria caused by the growth of quotes, which means a bullish market and active investments.



Despite the gradual recovery of Bitcoin's positions, its audience is skeptical, which means that a local sale may begin anytime that will put pressure on the price of the main cryptocurrency. When Bitcoin declined by 8%, a lot of news appeared in the information background that could contribute to the collapse of the asset. First of all, the alarming statements were published by the Turkish government, which opposed cryptocurrencies and decided to develop a state-owned digital currency. Back in the summer, a ban on the use of cryptocurrencies as a means of payment was introduced in the country, and the regulator is actively involved in the development of a draft law on the regulation of cryptocurrencies. The document will be considered in October 2021, and experts are inclined to believe that Turkey's current policy will be commensurate with the expulsion of mining from China at the end of July in terms of the degree of influence on the market.

Another important news that has been floating in the information space for some time is the termination of the work of more than 40 crypto exchange operators in South Korea. This will limit access to the cryptocurrency market for millions of users, which will also negatively affect the quotes of coins. The final and extremely disturbing news is the SEC investigation into the largest crypto exchange Binance on the fact of money laundering and opaque transactions.

There was a negative news background on the cryptocurrency market, which caused the fall in bitcoin quotes. And although this is not able to significantly affect the price locally, it will be extremely difficult for BTC to recover to its usual positions. A while ago, the coin is trading at $43,500, where a strong support zone is concentrated. A bearish candle is forming on the daily chart, which indicates the continuation of the downward movement. Technical indicators of the coin also indicate that Bitcoin's downward dynamics will resume. The MACD indicator has crossed the zero mark and entered the red zone, while stochastic and RSI are moving into the oversold zone.



At the same time, a strong buyer appeared on the hourly chart, who is trying to absorb the volumes of coins offered by the bears. Due to this, the price has slightly stabilized near the support zone of $ 45,200. The technical indicators of this digital asset have also acquired an upward direction, but the main reason for optimism is the development of a bearish triangle, which may indicate a continuation of price growth.

Similar dynamics are also visible on the four-hour chart, which indicates the beginning of the recovery period. If this trend continues, the coin will try to return to the key position of the current fluctuation area at $45,000. However, we should note the negative news background, which can worsen and collapse Bitcoin's quotes again, and therefore is an important auxiliary tool when analyzing the current and further movement of the BTC price.



Defining terms:

A bearish candle is a figure on the horizontal charts of cryptocurrencies, the opening price of which is higher than the closing price.

The oversold zone is an area on the technical chart that is below the 40th mark and indicates a powerful sale of the cryptocurrency, which increases the pressure on the price and contributes to its fall.

The bearish triangle is a technical formation on the charts of the cryptocurrency, showing the prerequisites for further price movement. Going beyond the bearish triangle can be considered a powerful signal to buy.





Artem Petrenko
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Bitcoin slumps over potential bankruptcy of China Evergrande Group



Bitcoin continued to fall this week as investors were prompting a widespread sell-off in the market, triggered by concerns about the possible bankruptcy of one of China's largest developers - China Evergrande Group.

So, on Monday, BTC closed 7.4% lower and valued at $ 44,061. Earlier, it fell 10.7% to below $ 43,000, which is its lowest rate since early August.

Other digital assets, such as Bitcoin Cash, EOS and Ether, retreated as well.



"Some have attributed the sudden dip to the currently ongoing Evergrande situation in China which has already caused turmoil in traditional markets," said Jonas Luethy, a sales trader at GlobalBlock. "Analysts have suggested that a choppy week is ahead, with a potential pullback to as low as $41,000," he added.

Bybt said the rate of decline accelerated when more than 25,8000 traders liquidated their accounts.

Leah Wald, CEO of Valkyrie Investments, said: "This is part of a well-established pattern where it sells off as traders cash in their riskier assets to cover margin calls and/or sit on the sidelines until markets calm down and they feel more comfortable going back into riskier positions,"

Although Bitcoin does not always trade in tandem with financial markets - a characteristic that makes it a tempting proposition in terms of portfolio diversification - its correlation on a 30-day basis with Nasdaq 100 has been consistently positive since February last year. A value of 0.5 means that they are moving in the same direction quite often these days.

Investors say that while the link to tech stocks makes sense, both types of investments can be seen as attractive to the same pool of tech-savvy investors (strong correlation is also found for small-cap stocks in the S&P 500 index). So, as Bitcoin becomes more integrated into global financial markets, it must be more responsive to changes in risk appetite that are driving global sentiment.

El Salvador President Nayib Bukele said they "bought the dip" in Bitcoin when they added 150 tokens to boost their total assets to 700 - about $ 32 million based on current prices. The country recently adopted Bitcoin as legal tender, which sparked controversy, technical glitches and protests.

Undoubtedly, the move is one of the reasons why BTC hit a four-month high. Even so, there is still a long time before the token can recover from the sell-off last May.

"On a day like today, where you have the perfect storm, I think people just go to, 'What can I sell quickest? What do I have access to at 2 in the morning?,'" said Scott Bauer, CEO of Prosper Trading Academy. "If they're holding crypto, which is obviously an around-the-clock market, maybe that's the first place they look," he added.






Andrey Shevchenko
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Technical Analysis of BTC/USD for September 21, 2021

Crypto Industry news:
Despite warnings from global agencies regarding Bitcoin adoption, the Salvadoran government continues to seize market opportunities.

When Bitcoin's price dropped below $ 46,000, Salvadoran President Nayib Bukele announced on Twitter that the country had "bought the dip". Thanks to 150 new coins, the government currently has 700 BTC worth nearly $ 32 million.

In an obvious nod to the "non-financial advice" statements displayed in the crypto ecosystem, Bukele shared his "presidential tip" reminding: "They can never beat you if you buy dips."

El Salvador's move towards adoption has excited the crypto universe, especially the possible tax exemption for Bitcoin investors. However, the government's decision to adopt Bitcoin as legal tender is not entirely free from problems.

In addition to the protests and marches against the government's move, the rating agency Standard and Poor's Global said the adoption "has immediate negative consequences" for the country's credit rating. S&P also said the move would hurt El Salvador's chances of getting a $ 1 billion loan deal from the International Monetary Fund.


Technical Market Outlook
The BTC/USD pair has almost made a new swing low below the level of $40,000. During the sell-off the market hit the level of $40,061. The nearest technical support is seen at $38,261. Any violation of the level of $40,061 would likely open the road to lower levels and the downwards momentum might increase then even more. The weak and negative momentum supports the short-term bearish outlook for BTC despite the extremely oversold market conditions on the H4 time frame chart.

Weekly Pivot Points:
WR3 - $55,433
WR2 - $52,068
WR1 - $51,114

Weekly Pivot - $46,800
WS1 - $44,786
WS2 - $41,130
WS3 - $39,325


Trading Outlook:
According to the long-term charts the bulls are still in control of the Bitcoin market, so the up trend continues and the next long term target for Bitcoin is seen at the level of $70,000. The next mid-term target is seen at the level of $59,506. This scenario is valid as long as the level of $30,000 is clearly broken on the daily time frame chart (daily candle close below $30k).








Sebastian Seliga
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Technical Analysis of ETH/USD for September 21, 2021

Crypto Industry news:
Turkey aims to become the center of Blockchain as a country with one foot in Europe and the other foot in Asia. However, the same passion does not apply to cryptocurrencies, as Turkish President Recep Tayyib Erdogan recently emphasized.

Erdogan hosted a Q&A meeting in Mersin, Turkey with youth from all over the country. One participant referred to the cooperation platform for the digital Turkish lira announced last week and asked if the central bank would accept cryptocurrencies. He also asked Erdogan for his views on cryptocurrencies.

"We have no intention of accepting cryptocurrencies. On the contrary, we are having a separate war, a separate fight with them. We will never support them. Because we will move forward with our own currency, which has its own identity," replied the president.

Turkey first announced plans for a national Blockchain infrastructure in 2019. Since then, the government and local authorities have adopted a pro-Blockchain stance. The government has already announced plans for the central bank's digital currency (CBDC), the testing of which is scheduled for the end of 2021.


Technical Market Outlook
The ETH/USD pair has made a new local low at the level of $2,804, so the sell-off is being continued. The nearest technical support is seen at $2,695 and the technical resistance is seen at $3,052. The weak and negative momentum supports the short-term bearish outlook for ETH despite the oversold market conditions on the H4 time frame chart.

Weekly Pivot Points:
WR3 - $4,190
WR2 - $3,923
WR1 - $3,621

Weekly Pivot - $3,349
WS1 - $3,067
WS2 - $2,787
WS3 - $2,498


Trading Outlook:
Ethereum have started the next wave up and violated the long-term target at the level of $3,550. The next long-term target for ETH is seen at the level of $4,394. 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.







Sebastian Seliga
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Trading plan for Bitcoin for September 21, 2021



Technical outlook:
Bitcoin had dropped to $40000 mark before pulling back higher on Monday. The crypto might have found support around the $40000 mark an might resume its rally from current price. It is advised to take profits on short positions from $48000-49000 levels as suggested earlier. The counter trend drop might stil drop toward $37000 mark before Bitcoin resumes higher again.

We would now be inclined for a potential buy on dips trade setuo since downside remains imited from here. Aggressive traders might plan to initiate long positions around $41000-42000 zone against $35000. If the trend resumes from here, potential remains to push above $65000 mark in the next several days.

Bitcoin is seen to be trading close to $42700-800 levels and is expected to push towards $48000-49000 in the near term. Immediate support is seen at $40000, while resisitance is around the $48000-49000 mark. A break above $48500 will confirm that bulls are back in control and that Bitcoin is heading towards $65000 mark.


Trading plan:
Potential rally towards $65000 against $35000.

Good luck!





Oscar Ton
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Bitcoin stalls at $ 42,500

Bitcoin halted at $ 42,500 after a major drop from $ 49,000. Apparently, crypto investors were not willing to buy the token because of the recent sell-off in the market.

But despite that, the industry is still booming in countries such as India. Local reports said there has been an impressive growth in the market lately as citizens were adding cryptocurrencies to diversify their portfolios. They see the industry as another way to invest and raise money after the COVID-19 pandemic. The majority of growth is observed in small towns, where interest in cryptocurrencies is at its historical peak.

In fact, local exchange WazirX recently reported that a huge portion of its new customers came from small towns. Currently, user registrations were up by 2,648% and approximately 55% of it were from small towns.

This influx of crypto customers is changing the profile of average investors. New traders are under 35 years of age and have some degree of education. Data says more than 90% are IT professionals, MBA graduates, engineers and startup owners. Of course, this leads not only to speculative trading, but also to the diversification of investment schemes. New traders are more likely to move from investing in Ethereum and Bitcoin to new technologies such as decentralized finance (Defi) and NFT. For example, WazirX said they sold over $ 108,000 worth of NFTs.

Growing demand also prompted exchanges to offer new products, including for P2P markets, to avoid regulatory oversight.

On a different note, OpenSea is launching an application for smartphones in order to attract new customers and further develop the crypto industry. With it, users will be able to access a large number of NFT collections through their smartphones.

OpenSea also continues to see record sales, but it hasn't been without problems lately. For example, on September 15, the company announced that one of its employees had been caught using inside information for trading.

There are other equally well-known blockchains from Avalanche, Solana and Tezos, but with the new mobile app, OpenSea is likely to see wider audience.



Going back to Bitcoin, there has been another breakout and return under the 200 MA. But if bullish traders manage to close the market above 46,000, the cryptocurrency may hit $ 60,000. If not, price will decline further to $ 37,300, $ 33,800 and then $ 29,200.





Jakub Novak
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

JPMorgan: Ethereum should be worth $ 1,500

JPMorgan's strategists concluded that Ethereum should cost $ 1,500. Based on the statement, the fair value of this cryptocurrency is much lower than its current price. According to the company, and to their set of measurements based on network activity, the cost of ETH at $1,500 is quite fair, and the remaining 55% of the market price is nothing more than speculation and an inflated bubble. One of the reasons for this assessment is that Ethereum is no longer so unique and faces fierce competition from other networks, such as Solana and Avalanche.

The managing director of JPMorgan said that Ether (ETH), the Ethereum network's own token, is trading at the current price only due to the market's confidence in the further development of the project. If one looks at the hash rate and the number of unique addresses, it can be seen that the real cost is much lower.

"We are struggling to get above $ 1,500, but the current price reflects an exponential growth in usage and traffic that may never materialize," JPMorgan noted.

This conclusion was already made by the "citizens" not only from JPMorgan. This idea is not new and does not have such a serious relevance. The fact that Ethereum is no longer so unique only means that it will continue to be in demand since nothing better has yet been invented. It is still quite early to talk about the maturity of projects such as Avalanche and Solana, which were almost hacked recently, paralyzing the work of the blockchain for more than two hours. There is simply no real alternative to ETH, on which most of the DeFi and NFT are currently being produced. Ethereum was a pioneer in the development and implementation of smart contracts in the cryptocurrency market and remains so. It gave rise to many chains, called "Ethereum killers", who seek to get the share of the Ethereum market, is not a serious threat, but only proves the viability of the market and its maturity.

However, it would be crazy to exclude the fact of competition from Binance or competition from Solana. In any case, all these projects have a good future, so it is recommended to take a closer look at them. But as long as the power of the ether blockchain will surpass all these networks, there is not much to worry about. Even with some large venture investments in these individual projects, most of the innovation still occurs in Ethereum, and then spreads to other projects. We are talking about a network of decentralized financing (DeFi) and non-interchangeable tokens (NFT). All of them initially appeared in Ethereum, and then were transferred to other networks.

From the point of view of technical analysis, the observed decline in ETH may be delayed if the bears manage to break through the large support of $3050 and consolidate below this level. In this case, a fall to the area of $2,700 and even to $2,440 will not be as unrealistic as it seemed quite recently. A serious correction in the US stock market is once again reflected in the cryptocurrency market, which has a fairly strong correlation with it. Apparently, investors still prefer to pay attention to the capital market than to new digital money. It will be possible to talk about the stabilization of the situation only after the Ether returns to the level of $ 3,300 or the bulls will be able to protect the large support of $ 3,046.







Jakub Novak
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Clouds are gathering over the largest exchange Binance: the US authorities are closely engaged in the exchange on the subject of insider trading, money laundering and market manipulation



Clouds are gathering over the largest Binance exchange. The US authorities have launched a major investigation involving the Binance exchange for involvement in possible insider trading and market manipulation.

A recent Bloomberg report said that all the points where it was clear that the exchange's employees had benefited from using the client will be studied. The Commodity Futures Trading Commission had a hand in this investigation. Binance is one of the largest cryptocurrency exchanges in terms of transaction volume.

The US authorities want to find out whether the cryptocurrency exchange was engaged in frauds and speculative actions, but Binance denies all the accusations regarding unfair play and various kinds of manipulations.

The company claims to have a strict code of ethics and a zero-tolerance policy, which is a catalyst to curb any illegal activity that could be very bad for its investor clients. The exchange very closely monitors such violations and dismissals - this can be the easiest consequence of such a violation.

However, US regulators are confident that Binance illegally committed insider trading and manipulated the entire cryptocurrency market. After such statements from the United States, many other countries, such as the United Kingdom, Germany, Japan, the Netherlands, also turned their attention to this exchange.

According to them, Binance operates outside the legal field and without permission in these countries, respectively, the exchange does not have the right to work in the states. The other day, the US Department of Justice engaged in a criminal investigation regarding the Binance exchange and rumors that it is engaged in money laundering and tax evasion.

Before that, the exchange has never been caught in any offenses or manipulations in the market. These investigations cannot lead to any radical action at the official level.

Binance has fully expanded its international regulatory compliance team. The most notable figures who work there are former US Treasury criminal investigator Greg Monahan, Jonathan Farnell - director of the complex, as well as former FATF head Josee Nadeau, who works as an adviser on compliance with regulation.

Former US Senator Max Baucus is also an adviser. In the wake of these twists and turns, the proprietary token of the Binance BNB exchange fell by 2 percent.





Vitaly Kolesnikov
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Bitcoin vulnerable to slide further

Bitcoin was trading in the red at 43,619 level, hovering above the 43,000 psychological level. Technically, it has printed a false break with great separation below this level signaling a strong demand area.

Still, it remains to see what will really happen as the pressure is high. Making a new lower low, a valid breakout below the support zone may really announce a deeper drop. BTC/USD is likely to come under massive pressure in the short term. It has dropped by 9.19% in the last 24 hours. A deeper drop could drag the altcoins down as well.

The volume rose in the last 24h by 51.26%, while the market cap is down by 8.98%. More sellers will jump in if a larger sell-off is confirmed.


BITCOIN DOWNSIDE BREAKOUT ACTIVATES LARGER CORRECTION


Bitcoin failed to stay above 47,637 and within the Ascending Pitchfork's body signaling strong sellers and selling pressure. It has registered only a false breakout with great separation through 43,000 and 42,900 levels. Today's low of 42,453 is seen as a critical level.

Dropping and stabilizing below it may activate a further decline. This scenario could signal a potential drop below 40,000 psychological level.


OUTLOOK
A bearish closure below today's low of 42,453 may activate a larger downside movement towards 40,000 and 38,000 psychological levels.





Ralph Shedler
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Trading signal for Bitcoin, BTC/USD, for September 20 - 21, 2021: Buy above $ 41,697 (EMA 200)



In the early American session, the price of Bitcoin (BTC / USD) is falling sharply below the SMA of 21 located at 47,000. It is also breaking the key support of 6/8 of murray located at 43,750. The 200 EMA located at 41,697 is likely to act as good support and there could be a technical bounce around this level.

Since the fall of September 7, BTC has not been able to recover to the psychological level of 50,000. It has made several attempts to consolidate above the SMA of 21 but failed. End each time it approached this moving average, sellers took control or short-term buyers liquidated their buying positions.

Technically, we can see that a bearish pennant pattern has been formed. This pattern is a sign of a further bearish trend. So, the price could reach the level of 41,697 in the short term. If the bearish force prevails, it could reach the key support of 37,500 (4/8).

On July 25, BTC broke the 200 EMA. After consolidating above this moving average, a new bullish wave began, which took the price to the high of 52,857. Now the only support that BTC has is this moving average. The 21 SMA now exerts downward pressure. If the price comes to test and if it manages to bounce above it, it will be a good opportunity to buy with targets at 47,000 and up to the 50,000 level (8/8).

On the contrary, a daily close below the EMA of 200 located at 41,697 will be a sign of the beginning of a bearish scenario so that the price could reach the level of 37,500. If the panic takes hold in the market, BTC tumble to the psychological level of 30,000.

Therefore, the key is to buy above the 200 EMA and sell below the 21 SMA. We believe that BTC is set to trade sideways in the coming days according to the daily chart. The eagle indicator is showing a bearish signal, we must wait for a break below 41,600 to be able to sell with targets at 37,500 and 30,000.


Support and Resistance Levels for September 20 - 21, 2021
Resistance (3) 46,875
Resistance (2) 45,624
Resistance (1) 44,314

Support (1) 43,750
Support (2) 41,121
Support (3) 40,625


Trading tip for BTC for September 20 - 21, 2021
Buy if Bitcoin rebounds at 41,697 (EMA 200), with take profit at 47,000 (SMA 21), stop loss below 41,000.





Dimitrios Zappas
Analytical expert of InstaForex
© 2007-2021