Cryptocurrency Analysis

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Sweden to regulate crypto transactions soon

Following the steps of other central banks, Riksbank announced that it will start regulating crypto transactions in Sweden soon. Obviously, the growing popularity of cryptocurrencies are attracting the attention of policymakers.



Ireland and Japan already joined the move against cryptocurrencies, but so far it did little harm to the market. Derville Rowland, one of the senior officials in the Central Bank of Ireland, said the craze in the market is very concerning because cryptocurrencies are speculative, not to mention unregulated. He said investors need to be aware that they could suffer huge losses in the crypto market.

The central bank of Sweden agrees on these statements and pointed out risks such as money laundering and fraudulent schemes. Because of this, the government is already tightening standards for crypto transactions, but not in terms of a ban, but on the development of control at the international level.

Many governments have long been trying to suppress the crypto market, but their efforts are obviously unsuccessful. As such, China stepped up its measures, placing a ban on crypto transactions in the country. They reasoned that risks are very high, enumerating concerns on scams, money laundering and huge losses.

As for the United States, the Federal Reserve said it needs more time to decide the right approach to regulation.

The European Commission basically said the same thing, affirming that it is figuring out what is the best way to create a regulatory framework for cryptocurrencies.





Jakub Novak
Analytical expert
InstaForex Group © 2007-2021

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Some investors sell bitcoin at a loss



While bitcoin is trading ambiguously around $36,000 per coin, various studies show that institutional investors have severely lowered their level of interest in bitcoin, miners stop mining until better times, and retail short-term investors are selling bitcoin, as they do not believe in its growth in the near future. We have said several times before that small traders and investors are focused on quick profits and cannot afford to keep Bitcoin on their balance for years. Thus, now, when it became clear that the "bullish" trend is over and it will not recover soon, retail traders have begun to get rid of Bitcoin at any cost, sometimes at a loss. The corresponding technical indicators allow us to draw just such a conclusion. Despite the fact that retail traders do not own a large number of coins, there are a lot of them, therefore, in aggregate, they may have even more coins than institutional ones. This suggests that retail investors continue to have a significant impact on the bitcoin price. Plus, one should not forget that most of the coins (according to research) lie dead weight on their wallets. Out of the 19 million mined coins, about 15 practically do not move, so there are about 4 million coins in circulation. Thus, even any large sale or purchase of several thousand coins can lead to a serious change in the course. What can we say about those periods when the markets began to get rid of bitcoin en masse? Even the sale of 100,000 coins may be enough for the rate to drop by $10,000 or more. Also, many experts believe that not only bitcoin, but the entire cryptocurrency market will continue to fall, which is also not surprising at all. Despite the fact that the bitcoin dominance index has seriously decreased recently, it still continues to have a strong influence on the entire market and continues to pull its "counterparts" along with it. Thus, if we remove from the field of view all the forecasts of "experts" who are already expecting $100,000 per coin and more in 2021, then reality shows that bitcoin is waiting for a long period of consolidation and, possibly, a new fall.



Technically, bitcoin on a 4-hour timeframe not only failed to overcome the Ichimoku cloud, but also went into a kind of flat. In addition, we managed to form two trend lines at once, which squeezed bitcoin between themselves. Thus, in the near future the "spring" may straighten and the market will move with renewed vigor in one direction. The only question is, which one? If there is a breakdown of the lower trend line, the chances of a further fall will increase, at least to the level of $30,500. If the upper trendline is crossed, bitcoin will try to recover to the level of $43,852.




Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

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Technical Analysis of BTC/USD for June 2, 2021

Crypto Industry News:
Blockchain Bitcoin charges a fee for each transaction and distributes the proceeds to the miners. Charges increase when the demand for transaction processing exceeds the miners supply. On April 21, average fees hit a record high of $ 62.8 per transaction.

Conversely, charges go down when mining supply exceeds demand. The drop in fees suggests that bitcoiners are not as keen on trading as they were just over a month ago.

This could have something to do with the recent crash in the cryptocurrency markets, which saw the price of BTC drop from $ 60,000 to $ 36,000 in just a few weeks.

Bitcoin miners also seem to be less interested in processing transactions anymore. Mining difficulty - the amount of computing power needed to verify transactions in the network - fell by 16% on Sunday. This is the biggest drop in over a year. Mining bitcoin becomes easier as the overall computing power supporting the blockchain decreases.

Due to the overall cooling of the cryptocurrency market, fees on the Ethereum network have also dropped. According to CoinGecko data, global cryptocurrency market capitalization has fallen from last month's high of around $ 2 trillion to the current level of $ 1.6 trillion.

Lower prices, fees, and mining power appear to follow from government efforts to mine bitcoin in China, where most miners are based. The cryptocurrency exchanges Huobi and OKEx have already begun to restrict some transactions, and officials in Inner Mongolia are considering banning BTC mining altogether.


Technical Market Outlook:
The BTC/USD pair volatility has decreased significantly, but the bulls are climbing higher step by step. The momentum is still hovering around the neutral level of 50, but is not dropping lower and the price is still seen around the short-term trend line resistance. The market still trades under the supply zone located between the levels of $43,1459 - $41,794, so bears are still in full control of the market and only a strong breakout above the level of $41,096 (38% Fibonacci retracement of the last wave down) would temporary change the outlook to bullish. The next target for bears is May 19th low seen at the level of $29,701.

Weekly Pivot Points:
WR3 - $58,682
WR2 - $52,643
WR1 - $41,961

Weekly Pivot - $35,513
WS1 - $25,163
WS2 - $18,359
WS3 - $7,655


Trading Recommendations:
Even despite the recent correction 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 $30,000 is clearly broken on the daily time frame chart (daily candle close below $30k).







Sebastian Seliga
Analytical expert
InstaForex Group © 2007-2021

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Technical Analysis of ETH/USD for June 2, 2021

Crypto Industry News:
According to the May 31 report, there has been a significant increase in the use of OTC platforms since China announced its position on bitcoin mining and tightened restrictions on financial institutions and payment operators in the context of providing cryptocurrency services.

Exact volume figures are difficult to establish as Chinese OTC transactions are made on a peer-to-peer basis and use third party payment platforms. However, the exchange rate between the Chinese Yuan and the popular Tether stablecoin (USDT) is seen as a key measure of sentiment in the local cryptocurrency market - as demand for USDT increases during market downturns.

The USDT / CNY exchange rate fell by as much as 4.4% after the Communist Party's announcements, although since then it has recovered more than half of the losses. The recovery suggests that as markets began to consolidate, the peak of sales may have passed.

One of the fears driving China's tightening stance on cryptocurrencies seems to be capital outflows from stock exchanges. Bloomberg speculates that over-the-counter trading may not carry the same risk of losing capital as conventional exchanges. It has been suggested that regulators may not be so strict when dealing with this sector.


Technical Market Outlook:
The ETH/USD pair has broken through the upper channel line around the level of $2,505 and tested the local technical resistance seen at $2,638. The new local high during this move up was made at the level of $2,594. Nevertheless, as long as the price is still under the level of $2,914, the bears are still in full control of the market and the next target for bears is seen at the level of $1,729, $1,633 and $1,544. The nearest technical support is still seen at the level of $2,201.

Weekly Pivot Points:
WR3 - $4,688
WR2 - $4,131
WR1 - $2,922

Weekly Pivot - $2,341
WS1 - $1,141
WS2 - $579
WS3 - $181


Trading Recommendations:
Ethereum has lost more than 50% of the recent gains from the lows of March 2020 and now is currently in the counter-trend corrective cycle. The next long-term target for bears is seen at the level of $1,728 (61% Fibonacci retracement of the last wave up) and $1,420 ( January 2018 swing high). The up trend is resumed when the level of min. $3,000 is clearly violated.







Sebastian Seliga
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

JPMorgan: Bitcoin may crash to $24,000



Over the past day, Bitcoin has shown no desire to either restore the upward trend or start a new round of correction. It was a weak day for Bitcoin, which does not happen often. One may get the impression that at this stage of its formation, bitcoin has found, if not a "fair price", then the price of equilibrium between supply and demand, which are now present on the market. Now, everyone is waiting for new data to understand what to do with Bitcoin in the near future. There are two themes that threaten Bitcoin. Topics of a possible tightening of regulation of the cryptocurrency sphere in China and the United States. Recall that in China, financial organizations have been banned from providing any services related to cryptocurrencies, and they also want to ban mining. In the United States, they want to oblige all exchanges and other cryptocurrency companies to provide the Tax Administration with information on all transactions over $10,000, and in addition, they are developing other innovations, since the volume of the cryptocurrency market exceeds $1.5 trillion and many American investors use it for hiding their income, in order to evade paying taxes. Thus, governments are beginning to slowly "tighten the screws", which is very displeasing to investors and traders, who often use bitcoin and other tokens just to remove unnecessary assets from the field of visibility, as well as to make money on investments that are nowhere to be found and cannot be tracked. In general, this news does not add optimism to investors, so no one is eager to buy bitcoin now, even at the current "very attractive prices." We are inclined to believe that the decline in quotes will continue in the medium term, but bitcoin can also consolidate in the range of $32,000 - $42,000 for a couple of months. What we are definitely not expecting is the recovery of the upward trend.

Meanwhile, analysts at JPMorgan said that bitcoin could plunge to $24,000 per coin. The bank believes that after bitcoin fell by more than $30,000 in just a month and a half, institutional interest in this coin has greatly diminished. Thus, according to the bank, the fair price for 1 coin can be between the levels of $24,000 and $36,000. However, in the long term (5-10 years), Bitcoin may grow to $145,000 per coin. Such a "theoretical" mark can be achieved if each investor's portfolio contains equal shares of gold and "digital gold". In this case, their capitalization may become equal, and the price of bitcoin may rise to $145,000 per coin. But now, in the coming years, much will depend on the actions of governments and central banks. We agree with this forecast, as we also believe that in the near future BTC will be prone to fall. But in the long term, it will resume growth, as has happened more than once.



Technically, bitcoin's fuse has faded and it is now trading around the $36,000 level. At this time, investors are in no hurry to buy bitcoin again, and miners get rid of the mined coins. The fundamental background remains unfavorable, so we believe that digital gold has more chances of a return to the $30,500 level than growth. If bitcoin quotes manage to gain a foothold above the 38.2% Fibonacci level - $41,000, then this will slightly increase the likelihood of further growth in digital gold, but traders still need to get to this level.





Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Bitcoin: the main reason for the collapse and the chances of recovery

Bitcoin continues to consolidate, and the technical picture on the daily chart has not changed significantly compared to yesterday. Therefore, the forecast given on Monday has not lost its relevance.

But on the 4-hour time frame, the technical picture looks more interesting, giving information for thought. But we will look at it a little later.

In the meantime, it is worth dwelling on the reason for the recent collapse of the cryptocurrency market. Yes, we know that these were Tesla's claims to bitcoin because of its non-environmental nature, the ban of China. But few people talk about the third reason, which was probably the main one. And the above news factors are just triggers.

After the collapse of the market, opinions about the leverage factor occasionally and timidly slipped in the statements of experts. But today, another article showed that this topic still deserves attention.

Many experts cite leverage as one of the reasons for the collapse of bitcoin. It was those who bought digital coins using margin conditions that started liquidating positions after receiving negative news. It was as if they were swept away by the wave of the fall. And it was repeatedly mentioned earlier that it was speculators, not holders, who left the market.

In particular, one of those who cited this reason was the host of the podcast "The Wolf of All Streets", Scott Melker.

"Of course, there was a big cycle of negative news, but cycles of negative news always seem to kick in when the system gets off the hook," Melker said.

"At a BTC price of between $60,000 and $50,000, we saw liquidations on exchanges of nearly $10 billion, which at the time was about three times more than any previous liquidation. Then from $40,000 to $30,000, we saw another $10 billion [in liquidation] before the price went back to about $40,000. In total, this is about 800,000 traders who completely liquidate their accounts," he added.

But if leverage was the main reason for the Bitcoin market crash, then in May it was not mentioned in the conversation about the BTC drop. "Leverage was dropped from the conversation because it is the real answer. But nobody wants you to have a real answer," said Melker.

As for the other news, Melker believes that there was nothing really "new" about it. The same China "banned" bitcoin repeatedly, but this time the market collapsed.

Going back to the graph, which is the 4-hour time frame, after the market crash, recovery occurs, forming an equilateral triangle. It is an ambiguous figure in terms of direction. But the exit from it usually occurs impulsively.

If its upper side is broken, then, given the technical potential of development, BTC/USD will most likely be able to overcome the resistance of 41,980.24 and gain a foothold higher. If quotes break through the lower border of the triangle, the downside potential will send BTC/USD to support at 28,392.99.

As you can see, at least a double bottom, a triangle, local targets for bitcoin, and a wide frame of the range 28,392.99 - 41,980.24 remain unchanged at present.







Ekaterina Kiseleva
Analytical expert
InstaForex Group © 2007-2021

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Cryptocurrency market analysis on June 1, 2021



The wave counting of the 4-hour chart of bitcoin still suggests an increase in quotes. After the cryptocurrency quotes fell by more than $30,000, two upward waves were already built. Thus, I assume that at this time, the construction of a new three-wave structure has begun, where waves a and b are already present. If this is true, then the increase in prices will continue with the current levels in the framework of the assumed wave c with the targets, positioned above the expected peak of wave a. That is, above the $42,000 mark. However, at the moment, bitcoin quotes are moving up with great difficulty. Affected by the lack of a good news background, which has always been of great importance for the cryptocurrency. Thus, I consider an alternative option to build tools of complex corrective structures, which will be horizontal or close to such. It is already clear that the instrument is in a triangle, which means a very limited range of movements of the main cryptocurrency.

The news background for bitcoin remains rather negative. There is, of course, news that inspires a little optimism in the hearts, but there are really few of them. Recent major news has come from China and the United States, where the authorities have set out to severely restrict mining and uncontrolled operations with bitcoin and other cryptocurrencies, which greatly reduces the demand for the asset. I believe that it is this news that prevents bitcoin from developing at least a corrective increase within the wave counting presented above. However, for example, in Argentina, there has recently been an increase in mining capacity and, in fact, an increase in the number of miners themselves. Inflation in Argentina is very high, reaching 50% per year. Thus, the national currency depreciates almost twice every year, as well as the savings of the country's residents. In search of protection from inflation and taking advantage of low electricity prices, local residents began to actively buy mining equipment and mine bitcoin, since even the latest drop in its quotes still makes it very profitable to mine and then sell it.

It should also be noted that Argentina has a law that prohibits local residents from buying foreign currency in large quantities. Thus, the population does not have the opportunity to protect themselves from inflation by buying a more stable currency. Therefore, bitcoin and other cryptocurrencies for them are really a good way to make money and partly win back the depreciation of the local currency. However, one positive news from Argentina is clearly not enough for bitcoin to continue its growth. Recently, many central banks have issued statements warning investors that they could lose everything on bitcoin transactions. The cryptocurrency itself was also sharply criticized, which is overly volatile and speculative, and is also rarely used for its intended purpose, that is, as a means of payment.

Based on the analysis, I believe that the three downward wave structure is complete. The current wave counting indicates a possible rise within wave c, I continue to recommend buying bitcoin for each MACD upward signal with targets located around $42,500. An unsuccessful attempt to break through the 61.8% Fibonacci level could lead to a new decline in bitcoin, but I more hope that in the coming year, the cryptocurrency will build complex corrective structures and will not resume the upward trend.





Chin Zhao
Analytical expert
InstaForex Group © 2007-2021

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Trading Signal for BTC/USD (Bitcoin) for June 01 - 02, 2021: Buy above $34,400, Symmetrical triangle



In the early trading hours of the American session, BTC / USD (Bitcoin) is trading within the symmetrical triangle according to a 4-hour chart, showing a consolidation signal after the fall in May to nearly $30,000. Now we notice that BTC is ready to challenge again the psychological level of $50,000.

On the other hand, Nikolaos Panigirtzoglou, JPMorgan strategist and Bitcoin expert said: The longer-term signal remains problematic as it has not yet shortened. Price drops to the $26,000 level would still be needed before the longer-term momentum.

In the medium term, Panigirtzoglou sees a fair value for Bitcoin in the range of $24,000 to $36,000. Analysts believe that the May crash in Bitcoin has severely weakened institutional demand, which is likely to keep prices at this level for now.

In view of these discouraging factors for BTC, from a technical point of view, we expect the $ 30,000 floor, confirmed by a double bottom, to give support for BTC to stay above this level. On this condition, the crypto asset will be able to break again the downward pressure zone of $50,000 and thus reach the goal of $75,000 by the end of the year.

Our recommendation is to continue buying BTC, if it makes a technical bounce at the 21 SMA or the bullish line of the triangle, around $34,555. Provided that it breaks and consolidates above the symmetrical triangle, we can buy BTC with targets at the 200 EMA at around of $46,946.


Support and Resistance Levels for June 01 – 02, 2021
Resistance (3) 40,059
Resistance (2) 39,282
Resistance (1) 37,934

Support (1) 34,652
Support (2) 32,551
Support (3) 31,369




Dimitrios Zappas
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Technical analysis of Bitcoin

BITCOIN


May was dominated by the bears, who took a break in the last week of the month. As a result, bitcoin continues to remain in the zone of attraction formed by the accumulation of levels in the region of 37,297 - 35,594 - 34,354 (monthly Tenkan + monthly Kijun + the final line of the weekly cross). The breakdown of the zone and the continuation of the decline will eliminate the weekly golden cross and open the way to the final border of the monthly golden cross of the Ichimoku cloud (27177). If the bulls manage to limit the current downward correction of the higher time frames by the supports achieved, then they will have to restore their positions through the following important resistances - 41,432 (monthly Fibo Kijun + weekly Kijun + daily Fibo Kijun) - 44,615 (daily medium-term trend) - 47,235 (weekly levels + daily Fibo Kijun).



Bulls performed an upward correction on H1 and are currently fighting for the most important levels of 36,000 - 36,215. Work and positioning above the levels, as well as an upward reversal, will give preference to strengthening the mood of the bulls. The resistance of the classic Pivot levels serves as upward benchmarks within the day, these are 37,934 - 39,282 - 41,217. The loss of support for key levels (36,000 - 36,215) and a reliable consolidation below will change the current balance of power in the lower halves in favor of the bears. At the same time, the main task for the bears will be to overcome the supports of the higher halves (35,594 and 34,354).


In the technical analysis of the situation, the following 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)





Evangelos Poulakis
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

ETH rushes to $3,000, Ripple once again defeats the SEC, but the market is waiting for the BTC reaction: analysis and forecasts

The new week began with relative calm for the cryptocurrency market. The indicators of the major altcoins continued to fluctuate in the ranges due to the collapse of bitcoin, however, they began to show considerable desire to return to growth. Thanks to numerous attempts to go beyond psychological marks, the total capitalization of the cryptocurrency market has increased by 3%.

ETH has managed to break out of the initial fluctuation range of $2,200-$2,400 and hit the $2,700 mark. As of 11:00 UTC, the main altcoin is quoted within a narrow corridor of $2,500-$2,700. However, at these levels, the asset began to fluctuate again, having risen in price by only 2% per day. At the same time, daily trading volumes are gradually increasing, reaching $42 billion. But the dynamics of price changes in a few hours suggests that the cryptocurrency still does not have sufficient market support to reach a new level and overcome the $3,000 mark. The main reason for this is too much dependence on bitcoin, which, in fact, is the anchor for the entire market. Ethereum has a rather positive individual news background, which contributes to the growth of quotes, however, the asset only managed to escape from one corridor to another. In addition to the upcoming London update, the developers have fixed the EIP-1559 vulnerability that caused the asset's network to be overloaded during the last mass sale. Thanks to this, the commission algorithm has stabilized. Soon, the coin will continue to strive for the level of $2,800, and eventually to $3,000, but growth will be significantly slowed by the market situation.



The XRP token has been the main driver of the market in recent days due to another victory, albeit local, of Ripple over the SEC. Recall that as part of the trial, representatives of the SEC were again denied a request to provide information about Ripple's legal advice. This news, coupled with the previous defeats of the SEC, can be perceived as support for the cryptocurrency market from the country's judicial system. However, the Ripple token failed to take advantage of the positive situation, and the cryptocurrency, having reached $1.08, rolled back to $1.01. Taking into account the indicators of the horizontal charts, as well as the daily trading volumes, which remain in the region of $6.5 billion, we can conclude that the market did not perceive another victory of Ripple. Therefore, in the near future, the main target of XRP/USD will be to consolidate above the $1 mark and slowly move towards $1.2 with parallel price consolidation.



Litecoin indicators continue to remain in the region of $170-$180, but the asset is accumulating critical mass. The cryptocurrency managed to jump to 14th place in terms of capitalization with a result of $11.9 billion. Altcoin also managed to slightly shift the range of fluctuations, which is clearly visible on the horizontal charts. LTC/USD indicators are quoted in the region of $188-$195, which indicates the prerequisites for more active growth. However, the limiting factor for the cryptocurrency is its excessive dependence on bitcoin, which is experiencing problems and is preparing to retest the $40,000 mark. Soon, the cryptocurrency will try to gain a foothold above the $200 mark, however, in the event of a negative impulse, LTC will test the strength of the support at $170.



Despite the rather turbulent market environment, cryptocurrencies are showing signs of life and are preparing for the start of a protracted growth. Thanks to another victory over the SEC, investors are starting to return to the game, as evidenced by statistics, which shows that the trading volume on cryptocurrency exchanges has exceeded the $2 trillion mark. However, bitcoin has the final say in the future development of the market. Soon, the cryptocurrency will finish accumulating volumes for the assault on the $40,000 mark, which will either herald a new growth cycle, or will plunge the market into another period of depression.




Artem Petrenko
Analytical expert
InstaForex Group © 2007-2021