Cryptocurrency Analysis

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Ethereum overcame the last hurdle

Yesterday, despite a rapid surge in the volatility of the main cryptocurrency, Ethereum failed to gain a foothold above the highs of February 4. A new local resistance was formed at the level of 1761.85 on February 5. Now, it is broken and the way to the next target is open for ETH/USD quotes - the level of 161.8 according to Fibo Expansion.

It is important to note that the level of 1761.85 from February 5 is broken, but perhaps the price will still roll back to it, confirming it as support. However, before the target of 161.8 on Fibo Expansion, which is located at the level of 1892.12, the power reserve is not so big. Therefore, to get a better ratio of profit and risk in a trade if you want to buy now, you should switch to a lower time frame, up to 30 minutes, and look for confirmation of the truth of the breakdown of 1761.85 there.

As for the target for growth, the level of 161.8 for Fibo Expansion is just a reference point, and it is still impossible to say unequivocally that it will work. But the level of 100 has worked well, and we will see how it will be with 161.8.





Ekaterina Kiseleva
Analytical expert
InstaForex Group © 2007-2021

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Bitcoin forecast on February 9 - BUY



1. Analysis of bitcoin futures volume on Chicago Mercantile Exchange (CME).

In this analysis, we will use the data on horizontal trading volume from the Chicago Futures Exchange on the daily charts. The analysis is based on the footprint-profile theory. According to it, the direction of the level with the highest traded volume during the day can indicate the possible direction of the trend. The level with the highest traded volume is the level where the maximum number of transactions was made. This is the level of major market players. Accordingly, if the maximum volume level moves higher, this indicates an uptrend. A downward movement of this level indicates a downtrend. Chaotic movement signals that the market is trading flat.

05.02.21 –The level of the maximum traded volume (POC – PointOfControl) – 38465
08.02.21 – The level of the maximum traded volume (POC – PointOfControl) – 44175

POC moved up, and the price is holding above the POC level. The uptrend continues, so we should open buy positions.


2. Analysis of the long-term trend.

A trend is your friend. Many traders know this saying but do not know how to use it. The answer is simple: trade only in the direction of the trend. This way, your trades will have more profit potential with less risk. The classic Dow Theory describes three main trends:

-long-term;
-medium-term;
-short-term.

You need to analyze these trends before opening any trade. This is what we are going to do in the analysis below.

The long-term trend is the daily trend. Trades will be opened on the daily time frame and held for several days. The analysis of the daily trend is carried out with the help of the EMA(48), an exponential moving average with a period of 48. If the daily candlestick closes above the EMA(48), then we have an uptrend and we should open buy positions. If the daily candlestick closes below the EMA(48), then there is a downtrend and we should go short.



On the chart, we can clearly see an uptrend. The price is located above the EMA(48). In this case, we recommend opening buy positions.


3. Analysis of the medium-term trend.

In our analysis, the medium-term trend will be the trend on the 4-hour chart (H4). EMA (48), an exponential moving average with a period of 48, will also be used for analysis. If the H4 candlestick closes above the EMA(48), then we have an uptrend and we should open buy positions. If the H4 candlestick closes below the EMA(48), then there is a downtrend and we should go short.



The price is holding firmly above the EMA(48). This means that the medium-term trend and the long-term trend have the same direction, so you should open buy positions.


4. Analysis of the short-term trend.

A short-term trend that can also show an entry point into the market is considered a trend on the H1 time frame. Here, we will again use the EMA (48), an exponential moving average with a period of 48. If the H1 candlestick closes above the EMA(48), then there is an uptrend and you should open buy positions. If the H1 candlestick closes below the EMA(48), then there is a downtrend and you should go short.



The price moved above the EMA(48). The short-term trend is moving upwards. As all the three trends move in the same direction, we should open buy positions.


5. Japanese candlestick analysis.

The Japanese candlestick analysis is applied to the daily time frame. In this analysis, we will also analyze the daily candlestick.



The daily candlestick marked with white closed higher. Its high is located above the high of the previous candlestick. The candlestick pattern matches the trend. Its body is longer than its shadows. The upside movement is highly likely.


6. Conclusions

Volume analysis: POC has moved higher, the price went up as well - BUY.

Long-term trend: up - BUY.

Medium-term trend: up - BUY.

Short-term trend: up - BUY.

Japanese candlestick analysis - BUY.

Conclusion: On February 9, it is recommended to open buy positions


7. Statistics

To analyze the effectiveness of this approach, we will keep the data on completed transactions.

In February 2021, we gained +1,19%.

At the moment, we keep the position open:

08.02.21 Bitcoin BUY: 39248; SL: 36902; the risk management is 1% of a $10,000 deposit with a trading volume of 0.04 lot.

When opening new positions, Stop Loss should be placed beyond the daily extreme points. Do not place Take Profit, as we will continue to move Stop Loss beyond the extreme points of the future sessions. Since the trade is carried out on the daily charts, the recommendation remains relevant throughout the day.

Trade with the trend and you will gain profit!




Maxim Petrov
Analytical expert
InstaForex Group © 2007-2021

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Litecoin: Looking at new scenarios

Yesterday, Litecoin performed well against the background of the growth of bitcoin and reached the resistance level of 171.25. Today, LTC USD quotes moved to the formation of a proto-trade of this level indicating a local uncertainty. The future mood will depend on which side of the horizon the price will be able to gain a foothold. It will also depend on whether bitcoin will continue to grow or begin to form a downward correction.

So, let's look at possible scenarios for the development of events on LTC USD. These are just benchmarks and as the situation develops, it will become clear which one is most likely.

First, if LTC USD is unable to gain a foothold above the level of 171.25 and decreases under the proto-trade, there is a possibility for a downward correction. The nearest technical reference point to the south is the level of 163.34, marked with a blue dotted line. If it is broken, litecoin may decline up to the support of 146.04.

Second, the reversal of LTC USD from the level of 163.34 up, the recovery to 171.25, and then the opportunity to test this resistance for strength once again.

Third, which is also too early to rule out, is the opportunity to go up from the proto-trading level of 171.25 and continue to grow to the next target of 186.48 without going to the correction.

This is how uncertainty generates assumptions and forecasts. In order not to get confused in all these possible options, it is necessary to keep the focus at the level of 171.25, and then focus on the principle of "the price moves from one strong level to another".





Ekaterina Kiseleva
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Ethereum futures are associated with high risk

The bitcoin hype continues, and the price has already tested the 48,000 mark after yesterday's news that Tesla purchased bitcoins for a total of $ 1.5 billion. Such documents were submitted to the US Securities and Exchange Commission yesterday. The purchase of bitcoins by the test company is associated with a change in its investment policy. The statement said that the purchase of cryptocurrency will give the company more flexibility to further diversify risks, which will increase profits. This solution will allow Tesla to invest in certain alternative assets, including digital coins, gold, and funds. The company also noted that it plans to start accepting bitcoins as payment for the products it produces.

In other words, in the near future, a Tesla car can be purchased directly for Bitcoin. The statement also focuses on the fact that the price of cryptocurrency assets is often unstable, and that the financial condition of Tesla "may suffer" in the event of a sharp drop in prices. However, this point is unlikely to attract much attention from investors. In his latest statement, Tesla CEO Elon Musk noted that he believes in bitcoin, but admitted that he was "late to the party". But back in December 2020, Musk spoke with MicroStrategy CEO Michael Saylor, whose company has invested heavily in bitcoin.



Saylor was optimistic about Musk's decision to buy bitcoin, saying that if Musk wants the company's shareholders to earn $ 100 billion, the best solution would be to convert TSLA's available funds into #BTC. His example may be followed by other giants included in the S&P 500, which will lead to a new pump of bitcoin, allowing the company to achieve a capitalization of $ 1 trillion. TSLA currently has a market capitalization of approximately $ 818 billion.

It is worth noting that large institutional investors have recently been using bitcoin as a hedge against inflation, as the Federal Reserve and central banks around the world have been pumping trillions of dollars into their economies in the hope of keeping stock markets growing, thereby spurring a sharp inflationary spike in the future. This is an additional incentive for the growth of the bitcoin price. Due to the active growth of the cryptocurrency and the interest among large investors, the liquid supply continues to decline, which only spurs the price to increase. Large purchases, like yesterday's one in the amount of $ 1.5 billion, can not be ignored. Currently, about 78% of bitcoins are either lost or stored and do not actively participate in trading. About 4 million bitcoins are remaining, which will be distributed in the future among future market participants, including large institutional investors such as PayPal, Square, etc.



As for the technical picture, a new maximum is set, but even after that, there is no major profit-taking. It will be possible to talk about the continuation of the bull market only after bitcoin confidently trades around the level of 48,000, the breakdown of which will certainly lead to a new high and open a direct road to the area of 50,000. This is a psychological marker at which large profit-taking can be noticeable. In the event of a decline in the bitcoin exchange rate, a major support level will be the area of 42,500, from which you can gain new long positions in the continuation of the growth of bitcoin in the near future. A break in this range will push the coin into the 37,900 area.


Ethereum

Ethereum futures, which were quietly launched on the CME exchange on Sunday evening, did not lead to a serious change in the value of the asset, which only slightly strengthened after overcoming another historical high in the region of $ 1,800. The introduction of futures has made it easier for institutional investors to access the world's second-largest cryptocurrency. Now there is no need to own the underlying asset to make transactions with it in the market. Do not forget that ethereum futures can negatively affect the price. If you take a similar launch of bitcoin futures in December 2017, it coincided with the fall in the price of BTC from the then all-time high of $ 20,089 to almost 5,000 by the spring of 2018. Therefore, when opening long positions, it is worth considering this point. However, institutional clients are satisfied with the emergence of a new tool that creates new opportunities for them, regardless of whether they want to hedge ethereum positions in the spot market or gain access to this cryptocurrency in the regulated derivatives market.



As for the technical picture, the main task of the buyers of ethereum will be to keep the trading instrument above the new support of 1484, which they did with great pleasure at the end of last week. The breakout of the resistance of 1760, which is now taking place, should be accompanied by new large purchases, which will open a direct road to the psychological figures of 1800 and 1850 dollars per ethereum. If this is not the case, the ethereum may very quickly return to the level of 1760. However, if the rapid decline does not occur, and the ethereum will continue to stand around 1760, then most likely, the upward trend will continue in the near future, especially given that bitcoin is close to 50,000.





Jakub Novak
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Ethereum benefitting from crypto hype. Altcoin surges 10%, willing to extend its stellar rally

The crypto market has been booming for the latest week. A variety of factors contributes to such a roaring success. One of the market catalysts is the news that Tesla Inc. has invested $1.5 billion in bitcoin and intends to accept the cryptocurrency as payment for its electric vehicles. No wonder that in light of such news, the number one cryptocurrency jumped 14% and set a fresh historic record.

The reinforcement and a steady advance of bitcoin benefitted other digital assets. For example, Ethereum spiked 10% in the latest 24 hours and surpassed $1,800 for the first time ever. The second popular cryptocurrency conquered a historic peak for one more reason. The Chicago Mercantile Exchange has launched its much-anticipated futures contracts for ether – the cryptocurrency of the Ethereum network. One contract is valued at 50 ETH that equals $90,000 at the current rate. Ethereum dispelled fears of crypto skeptics and prompted robust speculative activity. After a short correctional decline, Ethereum resumed its rapid rally. After yesterday's spike, it is trading at near $1,700 per token.



Importantly, in early 2021 all digital assets have been developing a dazzling rally beyond expectations of crypto analysts. Experts share the viewpoint that bitcoin will skyrocket to the moon on the back of solid fundamentals. Large investment funds which were betting on steady growth of cryptocurrencies are now able to report on their first humongous gains. So, the crypto market sets daily records in terms of capitalization. Ethereum stands out against its counterparts. It also surpassed investors' expectations. Last year, they projected Ethereum to smash through the milestone mark of $2,000 in 2021. At present, this forecast looks cautiously optimistic. Indeed, on February 9, its price climbed $1,800 per token. Apart from launching Ethereum futures on the Chicago Mercantile Exchange, there are other reasons. Since the beginning of 2021, the crypto market is enjoying massive investment inflow. Besides, popular online forum Reddit announced its partnership with the Ethereum Foundation.

To sum up, most crypto assets are now trading at risk-free levels. Some analysts reckon that February could surprise market participants with new historic levels in the crypto market. It does not matter whether the driving force will be tweets from Elon Musk or another flood of investments. One thing is obvious – the crypto market is getting integrated into the global financial system. Actually, it has already occupied its niche.




Artem Petrenko
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

New target levels for Bitcoin

Tesla's investment on Bitcoin gave the cryptocurrency a boost. Its rate continued to increase very sharply, especially after it broke above $41,980.24.

In line with this, there are new target levels for Bitcoin, and the more the quote moves in its direction, the higher is the chance that the cryptocurrency will achieve it.

In fact, yesterday, analysts forecasted BTC to reach $ 50,000. Since the quote continues to break resistance levels, upward potential has increased to 80%.

And now, using Fibonacci, the next targets of the cryptocurrency are $42,968.05 (100%) and $52,000 (161.8%).

Aside from that, $50,000 is a round level, so it can also be considered a strong psychological border.

Of course, there is no certainty when exactly Bitcoin can reach these levels. But the distance between the 100% and 161.8% retracement levels is not small, so a downward correction and consolidation may occur in between.






Ekaterina Kiseleva
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Bitcoin Jumps Higher As Expected!

The aggressive breakout through UML and R1 suggested further growth ahead!

Bitcoin (BTC/USD) has increased as much as 48,200 in the morning registering a new all-time high. Yesterday I've said in my analysis " Bitcoin Eyes New Historical Highs! " that Bitcoin is expected to increase further after passing above the short-term previous highs.

Technically and fundamentally, BTC/USD was strongly bullish, so the current rally is natural. The price has slipped lower in the last hours which is normal after such an aggressive rally. Still, the drop could be only a temporary one before it moves higher again. Such a retreat could help the buyers to buy this crypto again.


BTC/USD TEMPORARY RETREAT!


BTC/USD was expected to jump above 41,986 former historical high after retesting the Pivot Point (37,383). The aggressive breakout through the pitchfork's upper median line (UML) and through the R1 signaled that the price will continue to increase.

Now the rate has decreased to retest the broken R2 (46,048) level and the 150% Fibonacci line. After this temporary decline, BTC/USD could approach and reach the first warning line (WL1) and the $50,000 psychological level.


BTC/USD TRADING TIPS!

The new historical high signals that BTC/USD could resume its major uptrend in the upcoming period. Stabilizing above the 150% Fibonacci line and beyond the R2 (46,048) represents a bullish signal. The price could jump way higher after the current retreat.

Closing below the R2 could indicate a larger short-term retreat. Bitcoin could come back to retest the 41,986 former all-time high before resuming its upwards movement. One thing is certain now, Bitcoin's growth is far from being over after the latest developments.




Ralph Shedler
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Hype of the cryptocurrency market

The well-known Tesla company acquired $1.5 billion worth of Bitcoins on its balance. The amount is not so large, but the very fact that one of the largest companies in the world, and one of the richest people, according to Forbes, entered the crypto industry is worth a lot.

The crypto market is a young substance that few people believed in, and just a few years ago it was predicted to collapse every day. Now, not only institutional investors have entered the market, but also funds, banks that manage family capital, and mega-corporations.

So, the opinion about the crypto market has changed, it is now regarded as an opportunity for investment and savings. Imagine that before, the crypto market was discussed only by bloggers and the millennial generation, but with the arrival of large players, stock market veterans will simply have to study the issue of cryptocurrencies.

The news from the past, the well-known "Oracle of Omaha" Warren Buffett, who for a long time was a follower of conservative investment in such areas as Railways Industry, Construction, Consumer goods, eventually changed his mind and began to invest in Apple shares, although for a long time he was negatively expressed in the relations of this type of companies.

Opinion may change, with Warren Buffett as an example. The crypto industry is a young activity, and it still has a long way to go, and with large players on board, we can see not just an idea that Satoshi Nakamoto presented to us, but a real foundation for future investments.

Let's go back to the purchase of Bitcoins by Tesla, and, following from the information, the purchase took place in the price range from $35,000 to $40,000, that is, almost recently. It turns out that the market received a fundamental foundation where a major player stepped on board. Thus, the fear of a market collapse is currently decreasing at times, and if there is a correction, it will be just up to the levels of buying Bitcoins by Elon Musk.

Now a new boom called "Corporate Interest" awaits us, where large companies, following the giant Tesla, will look closely at a new type of assets, which will most likely lead to a new flow of investments.

"I wouldn't be surprised if within a year there is an announcement for the purchase of Bitcoin from some tech giants Facebook or Google," said Amber Ghaddar, founder of fintech firm AllianceBlock.

With the above information in hand, we will turn on our imagination to the maximum and, for a start, remember how Elon Musk pumped his own shares, which grew in price much faster than Bitcoin.

Elon Musk becomes the leading influencer of the crypto market, which stimulates the cryptocurrency to grow further.



What is happening in the market at the moment?

The first cryptocurrency did not easily recover from the January correction, it multiplied, updating its historical maximum. My forecast of $100,000 for 1BTC, which was presented in the previous review, no longer seems to be an analyst's fantasy but is regarded as a realistic medium-term perspective. With Bitcoin's current growth rate, the $100,000 prospect could be reclassified as a short-term trading idea.

It is worth considering that in my expectations I start not only from Elon Musk's hype but also operate with a foundation of institutional investors, a change in opinion about the crypto industry, PayPal, and the introduction of crypto into society, as well as other factors of influence on the market by speculators.

For newcomers, I advise you to study my articles on cryptocurrency since the spring of 2020, where the information was consistently analyzed, which formed the basis for the growth of Bitcoin.

Our return on investment in Bitcoin is more than 400%, congratulations to everyone on the Success!




General background of the crypto market

Analyzing the total market capitalization of the crypto industry, we see a figure of $1.372 trillion, which makes the crypto market more visible than before.

The current growth is largely due to Bitcoin, but given the growing Altcoin market, we can easily see a figure of $2 trillion and even $3 trillion in total market capitalization.

Market Cap: $1,372 756 527 456

BTC Dominance: 63.0%




The index of emotions (aka fear and greed) of the crypto market is at the level of 95 points, this is the FOMO * (Lost Profit Syndrome*) region, where an insane amount of capital and new participants are poured into the market. Such a high interest in the market and positive emotions from its participants can lead to further growth of the entire crypto industry.




Indicator analysis

Analyzing different sectors of timeframes (TF), it can be seen that the indicators of technical instruments unanimously signal a buy, due to the rapid growth of Bitcoin






Gven Podolsky
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Ripple

Ripple, although it was uncorrelated with bitcoin, still grew against the background of the rise of the cryptocurrency. Nevertheless, on the XRPUSD chart, this growth occurs within the narrow sideways.

The strengthening of the pair, supported by the movement of bitcoin, was stopped by the resistance level of 0.4769, held at the maximum values on February 5. And now the horizontal line 0.4532 has worked as a support level.

At the time of writing, an attempt to break through the support of 0.4532 has not yet been successful. However, it is also too early to say that the trade is finally over. Against this background, as usual in such technical situations, there are two possible options for further price movement.

If the attempt to break through the support of 0.4532 still turns out to be false, then XRPUSD has growth potential to the resistance level of 0.4769. And if the quotes are still fixed at 0.4532, there is a high probability of continuing to move south, where the target will be the horizontal 0.4348.

It is worth noting that the sidewalls are not wide, there is not enough room for maneuver, especially if you wait for the closing of one-hour/four-hour candles. If you want to trade in these corridors, it is better to switch to a lower timeframe, for example, a thirty-minute one, and look for entry points there, placing stop orders and take profits based on your trading strategy.







Ekaterina Kiseleva
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Bitcoin may rise to $70,000

The cryptocurrency market skyrocketed after the news from Tesla, an electric car manufacturer. Elon Musk said that his company had invested $1.5 billion in bitcoin. As a result, the prices of all major cryptocurrencies soared. Bitcoin and ether have hit new all-time highs, and their rally continues. However, the second statement from Tesla CEO could have a much longer lasting effect. Musk said that Tesla would start accepting bitcoin as a payment method for the company's products.

It seems that market participants have not taken this announcement seriously enough. Perhaps the point is that the investment flow in bitcoin has now become a matter of public interest, which brings immediate results. Notably, the fact that the digital asset has been adopted as a payment instrument is a very important event in the cryptocurrency market. Thanks to this announcement, bitcoin has every chance to significantly increase the number of users and, consequently, gain in value. Now every news or report related to Tesla will have a positive impact on the dynamics of bitcoin.

This sort of union can be called ironic, because 10 years ago nobody could imagine such a development in the markets of cryptocurrency and electric cars. Five years ago, they managed to occupy their own niches in the market. As of the beginning of 2021, these two phenomena are actively developing together. At the moment, bitcoin is trading at $48,000 on the Binance cryptocurrency exchange. Moreover, it is likely to continue moving in an uptrend over the next few days. However, this euphoric excitement around the cryptocurrency can suddenly face the harsh reality of the global market.



As of February 9, bitcoin continues to extend gains. However, investors are worried about the main feature of digital assets - their high volatility. It is not so difficult to set a new all-time high amid loud announcements and large investments. The hardest part is to stay firmly at this level and not to lose in price. Arguably, this bitcoin's rally is impulsive in nature. Therefore, a significant correction is highly likely. Thus, traders should focus on more stable assets that did not show strong upside momentum compared to the giants of the crypto market.





Artem Petrenko
Analytical expert
InstaForex Group © 2007-2021