Cryptocurrency Analysis

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Forecast for Litecoin for BCH/USD for February 17, 2021

1. Analysis of BCH/USDT volume from Binance cryptocurrency exchange

The analysis is based on the horizontal volumes data on daily charts from the Binance exchange. The analysis is carried out based on the footprint-profile theory. According to the theory, the direction of the horizontal level with the highest trade volume within a day can indicate the likely direction of the trend. The highest trade volume is the level with the largest number of transactions carried out. That is, it is the level of major market players. Accordingly, if the highest trade volume level goes up, it indicates an upward trend. Otherwise, if the highest trade volume level goes down, it indicates a downward trend. Chaotic movements signal that the market is trading flat.

15.02.21 – the highest horizontal volume level; point of control (POC) = 687
16.02.21 – the highest horizontal volume level; point of control (POC) = 700

The point of control has moved up. The price level is above the POC. The upward trend seem to have started. Therefore, one can open long positions.


2. Analysis of 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: to trade only in the direction of a trend. Thus, your trades will have more profit potential with less risk. According to the classic Dow theory, there are three main trends:

-long-term
-medium-term
-short-term

These are the trends you should analyze before entering the market. Now, let's take a closer look at these trends.

The long-term trend is the daily trend. In this case, deals are made in the daily time frame and are held for several days. The analysis of the daily trend is made with the help of the 48-period exponential moving average (EMA(48)). If the daily candlestick closes above EMA(48), it will indicate the upward trend. Therefore, you should enter long. If the daily candlestick closes below EMA(48), then it is the downward trend and you should enter short.



The chart indicates the upward trend. The price level is above EMA(48). This is why you should consider entering long.


3. Analysis of medium-term trend

The medium-term trend is the trend on the 4-hour chart (H4). In this case, we will also turn to EMA(48). If the candlestick closes above EMA(48) on the 4-hour chart, it will indicate the upward trend. Thus, you should enter long. Otherwise, if the candlestick closes below EMA(48) on the H4 chart, it will indicate the downward trend. Consequently, you should enter short.



The price level is above EMA(48). The medium-term upward trend coincides with the long-term one. Therefore, one should open long positions.


4. Analysis of short-term trend

A short-term trend is the trend in the H1 time frame. Moreover, it can show an entry point into the market well. We will turn to EMA(48) again. If the candlestick closes above EMA(48) on the H1 chart, it will indicate the upward trend. Thus, you should enter long. Alternatively, if the candlestick closes below EMA(48), it will indicate the downward trend. Consequently, you should enter short.



The The price is above EMA(48), indicating a short-term downward trend. The long-term, the medium-term, and the short-term trend coincide. Thus, you can buy the pair.


5. Japanese candlestick analysis

A classic Japanese candlestick analysis is applied to the daily timeframe. In this particular analysis, we will also look at the daily candlestick.



Thus, we have a black downward daily candlestick. Its extreme points are iside the extreme levels of the previous candlestick. It is a hammer candlestick pattern with a long uppert shadow. The downward movement is highly likely.


6. Conclusion

Volume analysis –> BUY.
Long-term trend –> BUY.
Medium-term trend –> BUY.
Short-term trend –> BUY.
Japanese candlestick analysis –> SELL.

General conclusion: On February 17, 2021, one can both sell and buy the pair.


7. Statistics

To analyze how effective this approach is, the data on completed transactions is tracked. The forecast is made for four instruments: Bitcoin, Ethereum, Litecoin, and BCH/USD. Trading account monitoring:



February 2021: +4.95%.

Current deals:

03.02.21 BCH/USD BUY: 441.26; SL: 663.73; Risk per deal: 1% of a $10,000 deposit with 2.7 lots.

We have plased the Stop Loss beyond yesterday's lows. The Stop Loss for new orders should be set beyond the daily extreme points. We do not place a Take Profit order because we will continue to move the Stop Loss above the extreme points of the upcoming sessions.

Since trading is carried out on daily charts, this recommendation is relevant throughout the day.

Trade with the trend and you will generate profits!



Maxim Petrov
Analytical expert
InstaForex Group © 2007-2021

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Bitcoin's correlation with stocks and gold declined inexorably



Bitcoin's correlation with stocks and gold has declined inexorably. To date, the cryptocurrency has reached new all-time highs, further supporting the idea that cryptocurrencies offer the benefits of portfolio diversification.

In fact, the 90-day correlation between the S&P 500 and Bitcoin fell to about 0.21, from above 0.50 last October. Comparable indicators for token and bullion are also near the lowest level for the year. As for Bitcoin and other digital coins, the benefits of diversification remain the same.

All this occurred because Bitcoin hit a new all-time high on Tuesday, trading around $ 50,000. The cryptocurrency is notorious for sharp price swings, but strategists are looking more closely at the potential to improve risk-adjusted portfolio returns by adding Bitcoin and competitors. According to them, adding cryptocurrency to a stock portfolio can reduce volatility.

Diversifying digital assets also makes sense, especially amid declining correlation between cryptocurrencies. However, investors need to be prepared for any situation with the widespread distribution of digital coins.

In any case, cryptocurrencies remain highly controversial, with some officials and strategists warning that they are a magnet for speculators and are subject to risks such as tighter regulatory requirements that could lead to large losses. But many also see that it could deliver rather handsome rewards and profits.



Vitaly Kolesnikov
Analytical expert
InstaForex Group © 2007-2021

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Bitcoin Bearish Divergence Invalidated. Eyeing New Highs!

The Falling Wedge reversal pattern was invalidated by today's rally!

Bitcoin (BTC/USD) is trading at the 51,390 level below 51,500 today's high, which represents the new all-time high. The price's growth is far from being over after today's rally. The aggressive breakout through the 50,000 psychological level invalidates a bearish divergence signaled by the price action.

The 50,000 level represented a critical obstacle. That is why the rate has hesitated around it registering false breakouts. BTC/USD could advance towards 54,000 and 56,000 in the short term after today's development.


BTC/USD UNSTOPPABLE!


BTC/USD's minor Rising Wedge pattern was invalidated by today's upside rally. The Stochastic indicator has signaled a bearish divergence on the H4 chart, but the current upside breakout validates a further growth.

The price ignored the first warning line (WL1), resistance level, in the end indicating a potential rally towards the second warning line (WL2). Personally, I believe that Bitcoin will be expected to increase and to reach fresh all-time highs as long as it stays above the Falling Wedge's downside line, the minor black uptrend line.


BITCOIN TRADING TIPS!

The early morning H4 bullish candle that closed above the Falling Wedge's resistance represented a bullish signal. Also, the aggressive breakout through the 50,000 psychological level signals a further increase.

The WL2 and the R2 (57,140) are seen as important upside targets if BTC/USD jumps and closes above the R1 (52,917).




Ralph Shedler
Analytical expert
InstaForex Group © 2007-2021

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Bitcoin soars above $ 50,000

Attachment 4535

Bitcoin, hitting a price higher than $ 50,000, is a sign that the cryptocurrency is gaining acceptance among large investors and companies.

In fact, Tesla, one of the largest car companies, said it would someday accept Bitcoins as payment, as a result of which the cryptocurrency's rate hiked, thereby putting it on company balance sheets and on Wall Street.

However, even if Bitcoin is becoming mainstream, cryptocurrencies are still subject to scattered scrutiny around the world, mainly due to lack of clarity in regulation and links to crime.

In January, US Treasury Secretary Janet Yellen and European Central Bank President Christine Lagarde called for stricter oversight of Bitcoin over concerns about its use for criminal purposes, such as money laundering.

Despite that, interest in Bitcoin continued to grow, and it is further fueled by analyst speculations that its limited supply could increase profits.

There are also talks that it is becoming "digital gold", especially since investors predict impending inflation, based on central banks and governments seeking to stimulate the economy in monetary terms.

But president of St. Louis Fed, James Bullard, said Bitcoin's claims to rival gold do not threaten the dollar's dominance.

In any case, JPMorgan said Bitcoin is now a competitor to gold, and could grow to $ 146,000 if it becomes a safe haven asset.

"The fundamental view that Bitcoin is viable to investors and a treasury asset for corporations continues to gain traction," said James Butterfill, investment strategist at CoinShares.

And with a cryptocurrency worth approximately $ 1.5 trillion, investors are convinced that it is a good idea to own Bitcoin or other cryptocurrencies.

Attachment 4536



Andrey Shevchenko
Analytical expert
InstaForex Group © 2007-2021

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Technical Analysis for the current situation of Bitcoin 02/17/21

The technical analysis of the current situation for Bitcoin.
Attachment 4532

The upward trend continues to develop. Bitcoin retreated back at the close of the day after yesterday's interaction with an important psychological boundary of 50,000.00, but today, a new attempt is being made. A breakout and a secure hold above will open up new horizons. "Above the mountains, there can only be mountains that have not yet been visited ..." The nearest support area in the upper halves is the historical level (48216.80) and the daily short-term trend (47527.81).

Attachment 4533

The advantages are currently on the side of the players for promotion. The resistances of the classic Pivot levels of 52046.81 (R2) and 53685.81 (R3) are now the benchmarks for continuing the rise within the day for the players to increase. The key levels of the lower halves combined today and formed the support line in the area of 48641.81 (central Pivot level) and 48095.75 (weekly long-term trend). The breakdown and consolidation below will change the current balance of power in the lower halves and may serve as the beginning of the formation of a full-fledged downward correction in the higher time intervals.

***

In the technical analysis of the situation, the following methods are used:

Higher time frames - Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels

H1- Pivot Points (classic) + Moving Average 120 (weekly long-term trend




Attachment 4534
Evangelos Poulakis
Analytical expert
InstaForex Group © 2007-2021

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Why Millennials Should Invest in Cryptocurrency



Cryptocurrency is a digital asset that can be used as a medium of exchange and savings. This generation of young people is known to embrace all digital assets. Even when it comes to investing, most of them prefer to do something online or through an app, rather than filling out voluminous documents.

Ten years ago, cryptocurrency appeared as a digital currency—an alternative to our current financial system. This means that cryptocurrency can be bought, sold, exchanged, or stored only in digital form. It is now a new asset class in the investment world. The cryptocurrency market is open 24 hours a day, 7 days a week, and 365 days a year. It is not necessary to wait for business hours to trade or invest in an asset.

These factors indicate that cryptocurrency as an asset class fits perfectly into the lifestyle of Generation Y. Here are the main reasons why young people need to invest in cryptocurrencies:

High and Fast Returns

Millennials are a very ambitious generation. They are looking for investments that bring high returns in a shorter time frame. While there aren't many assets that quickly generate high returns, cryptocurrency is an exception.

Since its inception in 2009, the cryptocurrency has grown in value and managed to surpass gold as the main asset class. Historically, bitcoin, which is the most popular cryptocurrency, has mostly outperformed the market, with the exception of 2018.

In the last year alone, Bitcoin has grown by 400% 3, while Ethereum (the second largest cryptocurrency) has grown by 1,000%. For example, if you invested £1,000 in Bitcoins in early 2020, their value would now rise to £4,000.

On the other hand, the well-known shares of Reliance Industries Ltd have yielded 30.34% over the past year 5. Let's say you have invested £1,000 in RIL, then you will get £1,303.

Other investments, such as term deposits, savings at the post office, etc., yield an average return of only about 7%, which does not even exceed inflation in the long run.

Replenishment of the retirement portfolio

Cryptocurrency is very unstable. This is evidenced by the fact that sometimes its 30-day gains, or losses can exceed 100%. This means that the risk and return are relatively high. Nevertheless, they are a great addition to the millennials' retirement portfolio.

First, millennials are the generation that doesn't have access to a pension from their employers. Even those who work in the government are unlikely to receive a pension after retirement. Ergo, they need to look for investments that can generate income for a comfortable retirement.

Second, it's the younger generation, which means they can afford to take risks. They have more time to try out new assets and gain investment experience. In addition, research has shown that the pandemic has increased Generation Y's propensity to take risks than ever before.




Vitaly Kolesnikov
Analytical expert
InstaForex Group © 2007-2021

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Technical Analysis of BTC/USD for February 17, 2021

Crypto Industry News:
Glassnode released data revealing Bitcoin miners are accumulating their digital assets while long-term investors are taking a profit.

In January, there was an intensive sale by miners. The Glassnode report shows that when it comes to February, the situation has changed dramatically.

Glassnode analysis shows that the main sellers of Bitcoin during the bull market are miners and long-term investors. According to the company, declining outflows from miners' wallets can be viewed as a pro-growth indicator as miners have either already paid for running costs or amassing coins in response to Tesla's $ 1.5 billion investment in bitcoin:

"This suggests the miners have achieved adequate levels of sales to cover costs. It could also mean that they see Tesla's vote of confidence as an honest reason to hold onto their coins very tightly.

With miners now sticking to their BTC, Glassnode concludes that most of the coins traded in the markets are liquidated by long-term investors.

Bitcoin Average Spent Output Lifespan (ASOL) is an indicator that measures the average age of all issued transactions in days. From his analysis, Glassnode concludes that long-term investors have used reports of Tesla's investments to take profits.

The company also noted that Coin Days Destroyed (CDD), which is a measure of activity that gives more weight to coins that have not been issued for a long time, also indicates that older coins are currently being redistributed. Glassnode concludes that long-term investors have been making profits since October - when BTC exceeded $ 12,000.


Technical Market Outlook:
The BTC/USD pair keeps going up and the next target for Bitcoin is now located at $60,000. In the meantime, the local technical supports are: $45,902 and $43,720. The intraday support is $47,002. However, if the market is out of the main channel and the price is below the level of $43,125 ( overbalance level), then the chance for a deeper correction are high, so please keep an eye on this levels. Please notice, the momentum is now decreasing as the price go up, which might be the beginning for bearish divergence on H4 time frame chart.

Weekly Pivot Points:
WR3 - $65,941
WR2 - $57,841
WR1 - $54,644

Weekly Pivot - $45,671
WS1 - $42,441
WS2 - $34,081
WS3 - $31,183


Trading Recommendations:
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 $50,000. Any correction or local pull-back should be used to open the buy orders. This scenario is valid as long as the level of $41,125 is clearly broken.






Sebastian Seliga
Analytical expert
InstaForex Group © 2007-2021

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Technical Analysis of ETH/USD for February 17, 2021

Crypto Industry News:
New applications and measures implemented by public health authorities around the world during the COVID-19 pandemic have sparked a debate on how to balance biological surveillance with the right of individuals to the privacy of their personal data.

In California, the Collaborative Charter Services Organization, which provides administrative support services to charter schools, has decided to implement a pandemic management system that priorities the privacy of its users' data. The blockchain solution, called "Team.Care Network", was developed by the medical startup Solve.Care and works as a mobile application.

Solve.Care said the solution would help schools track possible COVID-19 exposure in their community and should help them manage their return to personal education in a more controlled and careful manner. Pradeep Goel, CEO of Solve.Care, noted that California lawmakers are increasingly recognizing the importance of data privacy rights and have established a legal framework to help protect their residents:

As previously reported in the media, a number of blockchain solutions to solve problems, such as COVID-19 exposure tracking, vaccine management, and virus-related data visualization, have been deployed worldwide by entities including Arizona State University in the United States, the UK National Health Service and the Brazilian Government.


Technical Market Outlook:
The ETH/USD pair has been consolidating the recent gains after the market bounced from technical support located at $1,677. The market made a Pin Bar candlestick pattern as the levels below $1,700 were bought back up and the market is currently trading around the level of $1,750 again waiting for a trigger to resume the up trend. The next target for bulls is seen at the level of $1,900, but first they have to break through the short-term trend line resistance seen around the level of $1,800 (marked orange on chart). Only if the trend line is violated, the trend might be continued towards the new ATH.

Weekly Pivot Points:
WR3 - $2,286
WR2 - $2,080
WR1 - $1,977

Weekly Pivot - $1,768
WS1 - $1,663
WS2 - $1,454
WS3 - $1,346


Trading Recommendations:
The up trend on the Ethereum continues and the next long term target for ETH/USD is seen at the level of $2,000, so any correction or local pull-back should be used to open the buy orders. Please notice, the up trend starting to go vertical, so the volatility will be higher than average. The bullish scenario is valid as long as the level of $830 is broken.






Sebastian Seliga
Analytical expert
InstaForex Group © 2007-2021

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The self-proclaimed creator of bitcoin believes that investors will eventually sell the cryptocurrency



There's a huge number of opinions about what awaits bitcoin in the future. If you will take a closer look many of these opinions coincide. The problem is that investors, economists, owners, miners often talk about the prospects of the "cue ball" that means different periods of time. For example, when experts say that bitcoin can grow to $ 100,000 per coin, they often mean the near future. But what are the prospects for bitcoin? for example in 5 years? We already see that central banks and governments are developing new legislation and decrees that will be designed to control and regulate the field of cryptocurrencies. Taxes, fines, decrees and the procedure for conducting business in this area are being introduced. Christine Lagarde and Jerome Powell believe that cryptocurrencies need to be controlled, as they are often used in illegal transactions. It is unlikely that the heads of the two largest central banks in the world are just talking about it. Certainly, the corresponding software is already being developed which will be designed to control the turnover of digital currencies. What if in a couple of years, bitcoin will be fully controlled and it will be visible to whom and from whom and how much money was deposited to the account? Then, the very essence of the digital currency will disappear because initially the cryptocurrency was conceived as an anonymous means of payment. However, back to the forecasts. The sister of Craig Wright, who recently proclaimed himself the creator of bitcoin predicted that the growth of the cryptocurrency to $ 142,000 is based on Elliott's wave analysis. According to her, bitcoin will grow to $ 90, 000 by May this year and to $ 142,000 by March 2023. The creator of the number 1 cryptocurrency himself said in his opinion in a recent interview that by the time that all investors will eventually get rid of the cryptocurrency, they will understand that it is not suitable as a payment method. He also compared bitcoin to a Ponzi scheme, which is a banal pyramid scheme. Its essence is known in our time to anyone. It consists in attracting investor money on favorable terms. Senior investors receive payments that are formed from the contributions of junior investors or those who came to the pyramid later than others. Sooner or later, the pyramid will collapse and most junior investors will lose their money. Thus, Wrighty believes that the price of bitcoin will fall down sooner or later. "The price (for bitcoin-approx. author) is growing because people are paying. But this process will not last forever. Good old Charles Ponzi did it, too and Mr. Madoff. Eventually, people will leave, he said. It should also be noted that there is no evidence that it was Craig Wright who created bitcoin. According to Wright himself, bitcoin was developed by a team of several people that included himself.




Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

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MicroStrategy decides to buy more Bitcoin



The bitcoin exchange rate is trading near the level of $50,000 per coin and is not even going to stop there. Ether is also not far from its highs, but it is still correcting and is now near the level of $1,745. At the moment, there are no discussions on any fall of the two largest cryptocurrencies. This is pretty logical, considering the latest news. For the past two weeks, everyone has been talking about Elon Musk's posts on Twitter and Tesla's decision to buy $1.5 billion worth of Bitcoin. These events led the cue ball to the cost of $50,000 per coin. However, further messages began to arrive, saying that the oldest banks, payment systems, and some other companies were already ready to join the cue ball hype. Since bitcoin and ether are already traded on the Chicago Mercantile Exchange, the popularization of the cryptocurrency segment is in full swing. In the future, bitcoin is going to be used as payment for goods and services. Apple already provides its users with the ability to store cryptocurrencies on their phone. But at the same time, there is still a huge number of skeptics of bitcoin and other tokens remaining in the world. While they criticize the cue ball, the coin continues to break value records. Despite this, many believe that the "bubble" is inflating again and will soon burst. The problem is that bitcoin itself is worthless, so it doesn't have any fair value. It can cost as much as you want, just like other cryptocurrencies. Its price is formed solely on the basis of supply and demand. And supply and demand are formed from the hype. To put it simply, the more people join the general mainstream in order to make money on the rise, the more expensive the cryptocurrency becomes. But this does not mean that it becomes more useful or more scarce. Just yesterday, it became known that MicroStrategy is going to raise $600 million of borrowed funds to buy more bitcoins. According to approximate estimates, the company's account already has about 72,000 coins, which is equal to 3.6 billion in dollar terms. The company has invested in bitcoin throughout 2020 and is now referred to as the "corporate sponsor" of bitcoin. The company, whose main activity is not actually related to investments in cryptocurrencies, but to business analytics, has risen in price by 580% during 2020 alone, due to its activity on the purchase of the number 1 cryptocurrency. Now, MicroStrategy is going to issue 600 million bonds for sale with a maturity in 2027. We also stand by the opinion that the "bubble" is inflated and will burst sooner or later. But while it is still growing, it is possible to make good money on it.




Paolo Greco
Analytical expert
InstaForex Group © 2007-2021