Cryptocurrency Analysis

[IFX_Selena]

Bitcoin and Bloody Monday: Bearish Triumph or Correction?

Bitcoin has been holding up well all weekend in the narrow sideways range of 47,124.39 - 48,178.13 between the blue and red dotted lines. But Monday brought a new surprise: the price of BTC/USD came out of the consolidation zone downwards, rapidly approaching the strong mirror support level of 41,980.24.

At the time of writing, the price is hovering slightly above $43,400 per coin, with a daily loss of 7.98%.

The fall of bitcoin led to huge liquidations of $312 million - margin calls triggered. The average entry is about $45,000, which means that a drop below this mark can lead to the beginning of a serious correction in the market.

Meanwhile, various network data providers have noticed multiple spikes in supply on the exchanges, which is considered a negative sign. The money that appears on the stock exchange is usually sold in the market at some point.

At the same time, the average long/short ratio remains at 98% for long positions, which suggests a serious overheating of the market.

Nevertheless, network analysts point out that although the market is currently showing no signs of potential progressive growth, the data on the network still indicates that the bull market continues, and the bears are still not in control of the situation. Network indicators, such as stock inflows, show that there is no growing pressure from sellers in the market, and the current correction is of a short-term nature.

But let's look at it from the other side. Technical analysis allows you to assess the situation since the price includes everything. And now the daily candle is breaking through the local support level of 44,807.24, marked with a red dotted line. This means that the quotes are open to a path lower, to a strong mirror level of 41,980.24.

But the day is not over yet, which means we may well see a long lower shadow and a close above the red dotted support at 44,807.24. In this case, we can assume that the bulls retain the advantage.

If the price drops to the level of 41,980.24, it will become an alarming sign, since this is the last border separating the conditional "bullish" and "bearish" zones on the chart.

What does it mean? For speculative traders, this is the time to be wary of uncertainty. Will it be possible to buy if the price remains sideways between the support at 44,807.24 and the resistance zone at 47,124.39 - 48,178.13? In theory, yes, but the stop size will be very large in relation to the profit potential.

But if the level of 41,980.24 is confirmed as support, then a very good entry point can be formed here. But before that, false breakouts and even stop losses are not excluded, after which it will be possible to re-enter the long.







Ekaterina Kiseleva
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Investors fear new tax code regulations



On Monday, bitcoin continued its steep decline. At the time of writing this article, the cryptocurrency's price has already lost $4,000, and the day is not over yet. Meanwhile, the bitcoin quotes descended to the support level of $43,852, from which previously it bounced at least twice. In addition, the 24-hour time frame shows that the trendline broke through the upper border of the sideways expanding channel three times. The channel is no longer relevant but its lines are still coming in handy. Besides, bitcoin hit another important level of $43,056, which is 38.2% Fibonacci. As a result, the sellers' task for today will be to break through all three supports. If successful, bitcoin decline may continue.

The decline in the bitcoin quotations has been expected for a long time. The cryptocurrency rose to $52,000 unreasonably. Therefore, the fall of the price to $30,000 is likely to happen. Two factors may facilitate this scenario. The first one is recent amendments to the US tax code according to which the data on all transactions over $10,000 in cryptocurrency will have to be submitted to the IRS. The second factor is the Fed's possible statement about the QE taper on Wednesday. The first factor will reduce investor and trader appetite for bitcoin. Given that many of the world's central banks have repeatedly drawn attention to the use of bitcoin for various criminal and illegal transactions, a certain share of its holders may refuse any possible interaction with the IRS.

The US government is intending to introduce taxation of transactions with cryptocurrencies, which may make investments in digital assets less attractive. However, the second factor means that there will be much less money poured into the US economy from nowhere. For more than a year, the market showed a bullish trend because the Fed regularly injected billions of dollars into the economy. If the Fed decides to reduce the flows, it will also affect bitcoin investment. The cryptocurrency's price may fall due to a decrease in demand. This process may have already started. The latest US dollar rally is seen to be unreasonable. It began last Thursday. Therefore, markets may have already started to calculate the possible outcome of the Fed meeting.

Nowadays, there is a trend towards stricter cryptocurrency laws in the world. Many central banks argue that cryptocurrency is not money. They are actively developing their own digital currencies, which they state are backed by the Central Bank itself. Therefore, governments may continue tightening legislation on cryptocurrencies, seeing them as a threat to financial stability and as an uncontrolled means of exchange, payment, and investment. Additionally, they are likely to increase tax pressure to generate revenue for the budget from a rapidly growing and evolving industry. Thus, it may become increasingly difficult for bitcoin to grow in value over time.



The 24-hour time frame shows that bitcoin resumed the correction but now it needs to break through the level of $43,852 and the upper channel line for the downward trend to continue. Only in this case, the cryptocurrency may be sold with a target of $40,000. Should a third bounce from the $43,852 level occur, then buying bitcoin with a target of $48,000 seems to be a winning strategy.





Paolo Greco
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

XRPUSD in its second leg lower.

XRPUSD has broken short-term support and is moving lower. Price remains in a bearish trend. Price is now at $0.91 and our target remains at $0.86 area. In our previous analysis we warned XRP bulls that the current price action was giving us signs of weakness and that a break below $1 would be confirmation that the next leg down has started.



Green lines - Fibonacci retracements

XRPUSD is now approaching our target at the 61.8% Fibonacci retracement. This is important support. Breaking below it, will open the way for a move lower towards $0.70. Bears remain in control of the trend. There is no sign of a bottom or a possible reversal. More downside should be expected.





Alexandros Yfantis
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Bitcoin under pressure.

Bitcoin is trading just above the recent low of $43,127. Price has made a bearish reversal from $48,600 price level where it was trading two days ago. In our last analysis we warned Bitcoin bulls to be cautious as there were warning signs of a reversal and move lower.



Green lines - Fibonacci retracements

Red lines - Fibonacci extension targets

Bitcoin has fulfilled our expectations and has reversed its trend. Price is expected to break below $43,000 and move towards our first downside target of $38,950. Short-term trend is bearish. In our last analysis we mentioned that a break below $46,600 would be a bearish sign and will open the way for a move to new lows. We are in the middle of the way and I expect price to continue lower. The warning signs were there. Bulls were warned.




Alexandros Yfantis
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

BTC analysis for September 20,.2021 - Strong selling pressure and potential for the test of $38.000

Technical Analysis:



BTC has been trading downside as we expected. The BTC is heading towards 100% projection at $38,000.


Trading recommendation:
Due to strong downside pressure and the breakout of the 5-day balance, watch for selling opportunities on the rallies.

Downside target is set at the price of $38,000

Stochastic is showing another fresh bear cross on the daily time-frame, which is good confirmation for the downside movement.






Petar Jacimovic
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Bitcoin: How to determine further price movement by metrics of network activity

Over the past two days, bitcoin quotes have fallen significantly, thanks to which the analysis of on-chain indicators of network activity has been significantly simplified. At the same time, it is not necessary to use metrics that display a picture of the cryptocurrency's network activity without accompanying technical tools. The number of unique addresses, the total volume of transactions, as well as mentions in social networks and the dynamics of their movement may indirectly indicate further price movement.

*Learn and analyze

Daily Active Addresses is an on-chain indicator that displays the number of unique addresses that are in contact with the cryptocurrency network. It is used to display the current interest in a particular coin and the dynamics of the growth of the number of unique users over a certain period.

This indicator is more fundamental and can be used both for medium and long-term analysis of the state of the currency and prospects for the future, and analyzing the impulse price change. Let's take the example of the current state of the on-chain metric of the number of active addresses in the bitcoin network. As of 10:00 UTC, there are 753,000 unique addresses in the BTC network. For an asset with a market capitalization of about a trillion, this is an average indicator. This indicates that the market is not in a phase of active growth, which is accompanied by increased on-chain activity and a large number of new addresses. In addition, the charts show a divergence between the current value of bitcoin and the number of unique users.

*Learn and analyze

Divergence is a discrepancy between several specific metrics or technical charts of a financial instrument.

Several more conclusions can be drawn in addition to the obvious conclusion that the cryptocurrency is not in the stage of rapid growth. To do this, we will need to expand the dynamics of the graph and analyze the historical context. Judging by similar periods, after the Daily Active Addresses indicators were in this range, a powerful price increase followed. With this in mind, we can conclude that now bitcoin is in the accumulation stage, which will be followed by growth. In addition, this graph can indicate the local highs and lows of the coin's network activity. Thanks to this and using additional tools, it is possible to track the growth or decline in the transaction fees in the cryptocurrency network.



When analyzing Daily Active Addresses and comparing its data with the number of transactions, you can see a significant divergence. This is due to the growing institutionalization of the crypto market: as of September 20, more than 50% of all major global companies have invested in digital coins. With this in mind, it is worth understanding that several large bitcoin holders can carry out transactions for an amount greater than 50% of unique addresses. Due to this, a divergence is born, which is a common value for bitcoin and ether charts.



Thanks to the on-chain metric Daily Active Addresses, it is possible to determine what is the reason for the sharp growth of the cryptocurrency. If during the price rally the number of unique addresses is above 800,000, then, most likely, the retail audience and a small percentage of institutions are behind the price movement. If the number of addresses is below 500,000, and the price continues to go up, increasing the gap, then, most likely, a large whale is behind such a movement of quotes. Having received primary data on the assumed nature of the price increase, it is possible to conclude its feasibility and prospects, because the retail audience is often held hostage to impulsive decisions that only harm the price of the coin.

Analyzing the current indicators of bitcoin network activity and supporting the assumptions with historical context, technical indicators, we can conclude that the coin is in the stage of consolidation and accumulation. The number of unique addresses is on average, and the asset price fluctuates in a narrow range, while large companies continue to accumulate the volumes necessary for growth. At the same time, it is worth taking into account the local collapse that occurred on the market today. As a result of combining the metric of the number of active addresses and the total volume of transactions, whales do not produce a large number of transactions, and the retail audience is gradually falling due to the collapse of the price. It is likely that after the situation stabilizes, we should expect a significant increase in bitcoin's on-chain metrics.











Artem Petrenko
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Trading plan for Bitcoin for September 20, 2021



Technical outlook:
Bitcoin is trading close to the $45,000 handle after hitting resistance around $48,500 over the last week. The crypto seems to have retraced its recent drop between $53,000 and $43,000 close to a fibonacci level around $48,500 mark (not highlighted on the daily chart). Ideally, bears are looking poised to drag towards $37,000 levels before the price resumes higher again.

Bitcoin's overall structure remains bullish until prices stay above $28,500 daily chart support. A continued drop below $35,000-36,000 zone will open the door to test $28,500 mark again. On the flip side, if bulls manage to come back around $37,000 mark, the uptrend would remain intact towards $65,000 and higher.

Bitcoin would remain under pressure until $37,000 mark, which is close to initial support around $37,400, the August 04 low. Immediate resistance is seen around $53,000 mark and a break there will confirm a bottom in place.


Trading plan:
Profits might be realized @ 44,000-45,000 on shorts taken earlier. (48,000-48,500)

Good luck!






Oscar Ton
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Magnum Real Estate started accepting bitcoins



Potential buyers, including those from Hong Kong or mainland China, can now buy real estate with Bitcoin.

Magnum Real Estate said they will accept bitcoins as payments to the three ground-level shops worth US$29 million at a luxury residential project in Manhattan. This is another commercial move in New York City to accept a promising but volatile digital currency.

The stores at 385 First Avenue, also known as CODA, cover over 9,000 square feet of space and are currently leased to M&T Bank, Mighty Pita Restaurant and ProHEALTH Urgent Care Clinic. According to the developer, buyers will profit on them because they are fully built and are already generating income.

"We are a pioneer in bitcoin transactions and see a path where many more transactions can be done using blockchain," said Ben Shaoul, managing partner of Magnum.

This move makes CODA the first major income-generating asset to be offered to Bitcoin supporters. As such, Shaul said that any future resale of retail space can be made in foreign currency, depending on the buyer's preferences.

The firm also sold all of the apartments above the retail space, some of which were also paid for in cryptocurrency.

So, with an estimate of $ 29 million, the property is worth around 641 bitcoins at current exchange rates.

"I expect about two or three additional transactions in bitcoin this year for Magnum," Shaoul said, noting interest in luxury homes such as penthouses in Miami, condos in New York and mansions in Beverly Hills.

And according to Sonny Singh, chief commercial officer of BitPay, potential buyers from anywhere in the world, including Hong Kong or mainland China, can buy real estate. "The beauty of crypto is that it is a global digital asset," he said. "The buyer simply scans a QR code to pay."

To make it more clear, customers can make purchases in cryptocurrency, and BitPay verifies funds and accepts cryptocurrency on behalf of Magnum. The dollars are deposited into Magnum's bank account the next business day minus a 1% fee. But since the price is set in US dollars, the buyer will pay for the cryptocurrency at the spot rate at the time of purchase, Singh said.

"This investment could appeal to any Hong Kong or mainland Chinese buyer holding significant amounts of bitcoin and wanting the stability and cash flow of a long-term leased retail property in New York," noted Georg Chmiel, co-founder and CEO of Juwai IQI Group. "Unlike crypto, real estate cannot go to zero in value. This year alone, one bitcoin has been worth more than US$60,000 and less than US$30,000 [at different times]. That is more than a 50 per cent drop," he added.

James Pratt, director of James Pratt Auctions, which hosted the world's first online cryptocurrency real estate auction in Australia in April 2019, said: "With bitcoin, the transaction is rapid, and you do not lose out on an exchange or pay extra fees. [However] If you limit yourself to just bitcoin or cryptocurrency, you may [miss] some cash buyers not yet educated in cryptocurrency. The percentage of transactions with cryptocurrencies is still very low in countries like Australia and the US as compared to the mainstream method - at under 10 percent of all transactions over the last 12 months".

Nevertheless, Pratt expects a huge increase in crypto users, by around 5-10% over the next three years. But it will depend on the rate at which it is already growing and the fallout from the pandemic that has forced people to "research new ways of doing business".

However, the lack of sufficient regulation is a problem with Bitcoin and other cryptocurrency transactions, said Ken Lo, co-founder and chief strategist of HKbitEX. He also said that the settlement of payments using cryptocurrencies remains a challenge due to problems with money laundering, inadequate secure wallet options and lack of investor awareness.

Even so, Lo said blockchain technology provides better security and an easier way to track all transaction records, which could increase investor confidence. In addition, global legal and tax framework for cryptocurrencies is now evolving to cope with new developments.

And with the growing interest in cryptocurrencies around the world, increased regulation and wider adoption, Chmiel said it is reasonable to assume that cryptocurrency-only transactions could go mainstream, albeit not quite common, by 2025.





Andrey Shevchenko
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Technical Analysis of BTC/USD for September 20, 2021

Crypto Industry news:
El Salvador's adoption of Bitcoin as legal tender has ignited national ambitions in South and Central America. In Paraguay, Congressman Carlitos Rejala hinted in a recent tweet that Bitcoin would be the "official currency" if he became president in 2023.

This was not the first time Rejala had expressed his support for a royal coin. A few months ago, a Paraguayan congressman announced that he would introduce a law to legalize Bitcoin in his country.

It should be noted here that the national currency of Paraguay, the Paraguayan Guarani (PYG) has been fighting inflation since 1944. Even though in some countries suffering from inflation, people are resorting to Bitcoin, this does not seem to be the case in Pargay.

According to the Useful Tulips comparison with Paxful and LocalBitcoins data, Paraguay recorded a negligible volume of currency transfers in the last two years compared to other Latin American countries. On September 2, its all-time volume was $ 1,836, while Venezuela hit $ 1,795,366.


Technical Market Outlook
After the false breakout above the 50% Fibonacci retracement level seen at $48,044, the BTC/USD reversed over the weekend and is moving lower towards the technical support seen at the level of $44,219. The nearest technical support is seen at $44,219 and $43,159. Any violation of the level of $41,794 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.

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 20, 2021


Crypto Industry news:
The Bank of Russia remains skeptical about acquiring cryptocurrencies and will not support expanding access to these markets for Russian investors, bank vice president Sergei Shvetsov said this week.

Speaking at the international banking forum "Banks of Russia - 21st Century", the official explained:

"When it comes to buying cryptocurrency for investment purposes, we are skeptical about this idea. We believe that this idea is different from traditional assets, it is very risky and has the hallmarks of a pyramid."

Shvetsov reiterated the central bank's "clear position" that the only means of payment in the Russian Federation was "the ruble in all its forms, and not some kind of monetary surrogate or foreign currency." Financial authorities are gearing up to launch the ruble's digital prototype by the end of the year and hope CBDC will help reduce cryptocurrency use in Russia.

At the event in Sochi, Shvetsov said the Bank of Russia is working with commercial banks to delay payments sent to cryptocurrency exchanges. CBR recently advised banks to block cards and wallets used for crypto transactions. The goal is to reduce the chances of impulsive purchases of crypto assets, noted the deputy chief of the regulator.


Technical Market Outlook
After the false breakout above the supply zone located between the levels of $3,552 - $3,596 the ETH/USD reversed over the weekend and is moving lower towards the level of $3,000. The nearest technical support is seen at $3,185 and $3,122. Any violation of the level of $3,053 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 ETH.

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 break 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