Cryptocurrency Analysis

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Reasons why bitcoin cannot continue to rise



Bitcoin still cannot continue to grow and is trampled around the level of $60,000 per coin. Ethereum, on the other hand, breaks all cost records and reached $4,300 per coin on Wednesday. Experts continue to understand why this is happening and whether it is worth waiting for new growth from bitcoin and when. The first thing that crypto experts pay attention to is that bitcoin is already too expensive. The more expensive an asset is, the more difficult it is for it to continue to rise in price. It should be understood that bitcoin is not a stock of Apple or Tesla, or any other company that cannot fall in price to zero (theoretically, although the latest crisis showed that even oil can be worth a negative value). Still, the shares are backed by the business itself, property, buildings, technologies, and production. But cryptocurrencies are not backed by anything. Therefore, the more this or that cryptocurrency grows, the more questions arise for it: how long will the growth continue? At the $60,000 mark, some investors simply start selling coins to lock in profits. Some investors are starting to transfer funds to Ethereum or Dogecoin, as they have much more growth potential than bitcoin.

But now there is no inflow of new investors in bitcoin. Because the price is too high. Experts also note that bitcoin now has no informational support. At the beginning of the year, bitcoin regularly grew on the tweets of Elon Musk or on the news about the entry into the stock market of a cryptocurrency exchange, or on data about Tesla and Microstrategy's bitcoin investment. All this supported the demand for bitcoin, and now there is simply no news of this caliber. Experts also note that there is now an "altcoin season", however, if there are no questions about the growth of Ethereum, then along with it, some cryptocurrencies are growing, which are generally frivolous instruments or were created as a joke. That is, many traders and investors are now playing with cryptocurrencies at roulette or sweepstakes. They no longer care what kind of cryptocurrency it is, who its creator is, what are its prospects. If it grows, capital flows into it. A striking example is Dogecoin, which is now showing crazy growth, because Elon Musk is already going to sell electric cars for this cryptocurrency, as well as send a mission to the moon, paying it in full for Dogecoin.



Technically, bitcoin has completed the upward trend on the 4-hour time frame. The quotes have consolidated below the upward trend line, and, from our point of view, this is a rather powerful signal to continue the downward movement. However, at the same time, BTC has already returned to this trend line and is testing it for strength from below. In any case, the upward trend in the short term has weakened for several days in a row, and we believe that a corrective scenario is still the most likely.





Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

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BTC analysis for May 12,.2021 - Broken rising wedge and potential for the downside continuation towards $53.180

Technical analysis:



BTC has been trading sideways today at the price of $57.000. I still see potential for the downside movement towards $53.180.

Watch for potential selling opportunities on the rallies with the downside target at $53.180.

Stochastic is showing fresh bear cross, which is sign for the further downside continuation.

Main pattern in the background is broken rising wedge....





Petar Jacimovic
Analytical expert
InstaForex Group © 2007-2021

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Michael Saylor: Bitcoin is the main means of saving in the 21st century



Bitcoin quotes continue to hover around the $ 60,000 mark per coin. More crypto experts are beginning to believe that it is time for a new round of strong correction, which can take the cryptocurrency below the $ 50,000 level. The head of Microstrategy, Michael Saylor, called bitcoin a "destructive technology" and predicted its multiple growths in value. The head of the company, which is engaged in the development of analytical software, still devotes much more time to bitcoin. Recall that Microstrategy is the company that owns the largest number of bitcoin coins (more than 91,000). Michael Saylor believes that bitcoin will become the main means of saving in the 21st century. According to the CEO, humanity needs strong digital assets. "Bitcoin is the fastest growing and most destructive force in the world. In 12 years, it has grown from 0 to $ 1 trillion (by capitalization). It is the most disruptive technology in your life, more disruptive than Amazon, Apple, Facebook, and Google," Saylor said. Thus, the hit parade of crazy forecasts from large bitcoin owners continues. We remind you that any major investor is interested in the asset continuing to grow.

Bitcoin can grow if there is a new influx of investments and investors. Its rate is not tied to anything other than the faith of investors and traders in it. Simply put, any cryptocurrency rises or falls in price only based on the factor of whether investors believe in its growth or not. Therefore, we will continue to read forecasts from the category "bitcoin will cost $ 1 million" or "bitcoin will become the main means of saving in the 21st century" for a long time. Despite the popularity of "digital gold," no serious investor will ever keep all their savings in one asset. Bitcoin may pull some of its investments from other traditional investment tools, such as stocks or gold (it has already pulled), but this does not mean that its share in the portfolios of investors and funds will grow constantly. Thus, we recommend paying more attention to the forecasts of those experts who are not personally interested in bitcoin continuing its growth. Plus, we should not forget that both the stock market and the cryptocurrency market are now growing, as the US government and the Fed (and not only them) are pouring vast amounts of money into the economy to stimulate it. Sooner or later, this process will end.





Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

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Elon Musk's media coverage and the altcoin season: why the growth of Dogecoin is dangerous for the cryptocurrency market

Over the past few months, the situation on the cryptocurrency market has been actively changing. Due to the problems of bitcoin and the beginning of the altcoin season, there is a redistribution of market shares. One of the main winners in this situation was the Dogecoin meme coin. In less than a month in May, the cryptocurrency has risen in price by 373% and burst into the top 5 crypto assets in terms of capitalization.

However, such a demand for an asset harms the market and does not correspond to the real state of affairs at all. The main mouthpiece of Dogecoin was Elon Musk, who went beyond Twitter and promoted cryptocurrency even on the US show SNL. It is thanks to the activity of the billionaire that the coin-meme shows an abrupt growth. On May 8, when Musk announced his participation in SNL, the cryptocurrency renewed its all-time high, rose in price by 23% per day, and reached $0.73. In addition, the huge growth of the coin started due to the altcoin season and its impact on weaker market participants. Cryptocurrencies such as ETH, XRP, and LTC are helping to strengthen the position of smaller altcoins. It is worth noting that Dogecoin began to gain a wider audience, which also affected the growth of the asset's quotes. For example, the US baseball team has started selling tickets to Dogecoin games.



At the same time, the coin-meme remains the most risky asset, which instills fears in the majority of the market audience. The fact is that Dogecoin set the trend for the development of extremely volatile and highly speculative assets, like Shiba. The main danger of these coins lies in their excessive volatility: Doge is able to gain 25% of its capitalization in a few hours after Elon Musk's tweet. For assets that are in the top 10 or top 5 cryptocurrencies in terms of capitalization, this is a very dangerous signal that can negatively affect the general market sentiment. This is due to the fact that, with an impressive capitalization, altcoins can fall in price as sharply as they gained their mass.



This negatively affects the overall market position and can cause a sharp and deep correction, aggravated by bears. In the worst-case scenario, such jumps in the value of frivolous assets can widely reverse the current trend and cause depression. The high demand for speculative cryptocurrencies among retailers heightens institutional doubts about their willingness to enter the market. That is why the main cryptocurrencies (LTC, XRP, BTC) are more like stablecoins and fluctuate in narrow ranges, which is also caused by the excessive alertness of the market.

Considering all of the above, the market is in a wait-and-see position. For a long time, the crypto market has lacked a powerful impulse that would allow large companies to cast aside doubts, and the main cryptocurrencies to overcome psychological boundaries. As of May 12, such announcements are not expected, and market participants are increasingly inclined to believe that the next cycle of growth of the cryptocurrency market, provoked by ETH, is coming to an end.




Artem Petrenko
Analytical expert
InstaForex Group © 2007-2021

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Dogecoin skyrockets due to Elon Musk



Dogecoin, which started out as an internet joke, saw massive gains on Tuesday, after Tesla CEO Elon Musk tweeted if the company should accept the token for payments.

Musk asked the question via a poll, in which more than 3 million participants responded.



Coinmarketcap said price hit from 46 to 54 cents after the tweet.



But on the day before, Dogecoin was trading downwards because Musk called it a "hustle". Its market capitalization declined strongly from $ 95 billion to $ 67 billion dollars.

Now, the token is the fourth most valuable cryptocurrency after Bitcoin, Ethereum and Binance Coin. It has gained 70% since mid-April, when Coinseed converted the holdings of its investors into the token.

SpaceX, Musk's commercial rocket firm, said it will take a trip to the moon in 2022 using a mini-satellite from Geometric Energy that was paid for in full by Dogecoin.

This will not be Tesla's first foray into cryptocurrencies, as back in March this year, the company announced it would accept bitcoins as payment for its electric vehicles.





Andrey Shevchenko
Analytical expert
InstaForex Group © 2007-2021

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Trading plan for Bitcoin for May 12, 2021



Technical outlook:

Bitcoin dropped to the $53,000 level yesterday before pulling back again. This was in line with our expectations. The crypto has again hit intraday resistance around the $58,000 level. A bearish reversal from here looks possible. Iy may decline to the $41,000-43,000 levels before Bitcoin resumes an upward movement again.

Bitcoin is seen to be trading around the $57,200/300 levels at this point in writing. It is expected to decrease to at least $43,000 soon. Immediate resistance is seen at $60,000, followed by $65,000; while support comes in around the $47,000 level respectively. A break below $47,000 will be seen as confirmation of a push further lower to the $43,000 and $410,00 levels respectively.

The Fibonacci 0.382 retracement of the previous rally between $3,850 and $65,000 is seen passing through the $41,000 mark. Hence, probability remains high for a bullish bounce if prices reach there.


Trading plan:
Remain short, stop @ 65000, target @ 41000

Good luck!




Oscar Ton
Analytical expert
InstaForex Group © 2007-2021

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Ripple Looks To Trade Higher!

Ripple is trading in the red on the H4 chart being located at the 1.4836 level. The price found temporary resistance again and now it is trading lower to test and retest the immediate support levels before jumping higher.

XRP/USD plunged on Monday, but invalidated a larger decline by developing a pin bar. Bitcoin increased in the short term, so altcoins turned to the upside as well. Technically, the bias remains bullish, so we could search for new long opportunities around the current levels.


XRP/USD LARGER DROP INVALIDATED!


XRP/USD was rejected by the weekly pivot point (1.5378) and now it could test and retest the 1.4671 and 1.4200 static support levels before developing a new swing higher.

The false breakdown with great separation below the lower median line (lml) of the ascending pitchfork and through the S1 (1.3109) signaled that the downside movement is over.

The bias will remain bullish as long as the rate stays above the lower median line (lml).


RIPPLE FORECAST!
A new false breakdown through the lower median line (lml) or a major bullish engulfing printed on this dynamic support could bring a new bullish momentum.

Moreover, a jump and fixation above the weekly pivot (1.5378) could represent a good long entry with a first upside target at the R1 (1.7624), around the median line (ml).





Ralph Shedler
Analytical expert
InstaForex Group © 2007-2021

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Trading Signal for ETH/USD, May 11-12, 2021



On the morning of the American session, the ETH/USD pair is trading within an uptrend channel since April 1, and above the 21 SMA on 4H charts. It still maintains its strong uptrend.

JPMorgan analysts believe that ETH/USD should trade at a price of $1,000, more than 70% below its current price.

The current and inaccurate value is due to increased institutional investments and network improvements according to analysts. They claim that these factors have led to a price increase, but the current price does not reflect actual network usage.

This bubble could burst and Ethereum could fall to the support level of 3475. In the short term, there is the 7/8 of Murray and if it trades below this level there could be a change in trend until the support of the 200 EMA around 2,550 in the medium term.

On the technical level, we can observe the formation of a reversal pattern called shoulder head shoulders, while ether is trading below the psychological level of $4,000, this pattern could finish forming and there could be a downward movement to the 3400 area.

On the other hand, a pullback towards +1/8 of murray, we hope it is a good selling opportunity, in view of the fact that the eagle indicator is showing a bearish signal and a strong correction is imminent in the coming days.

Our recommendation is to sell below $ 4060 or the ETH trading below 3890 with targets at 3400 in the short term.


Support and Resistance Levels for May 11 - 12, 2021
Resistance (1) $4,178
Resistance (2) $4,278
Resistance (3) $4,456

Support (1) $3,927
Support (2) $3,649
Support (3) $3,400




Dimitrios Zappas
Analytical expert
InstaForex Group © 2007-2021

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Litecoin forecast for May 12, 2021

1. Volume analysis of LTC/USD from Binance

The analysis is based on the traded volume data from the Binance exchange on the daily chart. The analysis is carried out based on the footprint-profile theory. According to the theory, the movement of the level of the highest traded volume intraday 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 traded volume goes up, it indicates an upward trend. Otherwise, if the level goes down, it indicates a downward trend. Chaotic movements signal that the market is flat.

10.05.21 – the level of the highest traded volume (POC – PointOfControl) – 399
11.05.21 – the level of the highest traded volume (POC – PointOfControl) – 351

The POC has moved down. The price is above the POC. The market is moving sideways. Today, you can enter long and short positions.


2. Long-term trend analysis
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 with the trend. Thus, your trades will be more profitable and less risky. According to the classic Dow theory, there are three main trends:

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

These trends should be analyzed before you enter the market. Now, let's take a look at them.

The long-term trend is the daily trend. In this case, trades are conducted 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. If the daily candlestick closes above EMA 48, it will indicate the upward trend. You should enter long positions. Otherwise, if the daily candlestick closes below EMA 48, then it is the downward trend and you should enter short positions.



The price is above EMA 48. It is a long-term upward trend. You should consider entering long positions.


3. Mid-term trend analysis
The mid-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 H4 chart, it will indicate the upward trend. Thus, you should enter long positions. Otherwise, if the candlestick closes below EMA 48 on the H4 chart, it will indicate the downward trend. Consequently, you should enter short positions.



The price is above EMA 48. It is an upward mid-term trend. You should enter buy positions.


4. Short-term trend analysis
A short-term trend is the trend in the H1 time frame. Moreover, it can show an entry point into the market. We 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 positions. Alternatively, if the candlestick closes below EMA 48, it will indicate the downward trend. Consequently, you should enter short positions.



The price is above EMA 48. It is a short-term upward trend. You can buy the instrument. The long-term trend, the mid-term trend, and the short-term trend are in line.


5. Japanese candlestick analysis
A classic Japanese candlestick analysis is applied to the daily time frame. The daily candlestick is analyzed.



The white daily candlestick has closed upward. Its extreme points are within the extreme points of the previous candlestick. It is a Hammer candlestick pattern, heading upward. The candlestick has a short body and a long lower shadow. Today, you can open buy positions.


6. Conclusion
Volume analysis – BUY/SELL.
Long-term trend analysis – BUY.
Mid-term trend analysis – BUY.
Short-term trend analysis – BUY.
Japanese candlestick analysis – BUY.

Conclusion: You can buy and sell LTC/USD on May 12, 2021, as various analyses provide different forecasts.


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, BCH/USD. Gains for three months: 11.1%. Drawdown: 4.88%.


Statement:


I do not open new trades due to market uncertainty.

The risk per trade is 1% of a deposit. A Stop Loss for new trades is placed beyond the daily extreme points. We do not set a Take Profit 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

[IFX_Selena]

Technical Analysis of BTC/USD for May 12, 2021

Crypto Industry News:
Global interest in Dogecoin surpassed interest in Bitcoin for the first time. According to data from Google Trends, the values assigned to each cryptocurrency from May 2-8 are 56/100 points for DOGE compared to 48/100 for BTC.

DOGE searches over the past 12 months have often been closely correlated with Bitcoin's highs and lows. This week, however, shows not only no link, but also a higher level of interest in DOGE in absolute terms.

In mid-April, the coin gained 80% in value in just one day, achieving 5,000% annual returns. As the quintessence of the meme cryptocurrency, many spikes in asset prices have been fueled by social media posts. This mainly concerns the endorsement of Tesla CEO Elon Musk.

However, as noted in April, a high level of interest in an asset does not necessarily indicate its success in the markets. Indeed, this week has been noticeably bearish for DOGE, coinciding with its debut notoriety for the coin during Musk's performance on Saturday Night Live.



Technical Market Outlook:
The BTC/USD pair has bounced from the technical support located at the level of $54,719 ( low at $53,789) and might be going up towards the key short-term supply zone located between the levels of $60,000 - $58,322. The recent wave up has ended with a Pin Bar candlestick at the level of $57,939 but the momentum is slightly above the neutral line already, so the next target for bulls is seen at the level of $58,322 and $59,596. The larger time frame trend remains up as long as the level of $47, 707 is not clearly broken.

Weekly Pivot Points:
WR3 - $67,229
WR2 - $63,211
WR1 - $60,975

Weekly Pivot - $56,852
WS1 - $54,336
WS2 - $50,318
WS3 - $48,012


Trading Recommendations:
Event despite the recent correction from $64,789 to $47,060 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. Any correction or local pull-back should be used to open the buy orders. This scenario is valid as long as the level of $50,000 is clearly broken on the daily time frame chart (daily candle close below $50k).






Sebastian Seliga
Analytical expert
InstaForex Group © 2007-2021