Cryptocurrency Analysis

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Bitcoin vulnerable to a move towards $23,000-$16,000.

As we mentioned in previous posts, Bitcoin price had formed a triangle pattern. Price mostly moves sideways after the strong decline from $65,000. Such a triangle pattern is usually a continuation pattern and usually find near the end of the trend. What this means is that although the most probable scenario is for price to break the triangle to the downside, this will most probably be the final leg down before a major bounce or counter trend move.



Red lines - triangle pattern

Black line - support

Blue line - expected size of decline of triangle break down

Yellow rectangle -target area

Bitcoin will most probably break towards the downside as long as price is trading below $39,000-$40,000. My target area is between $23,000 and $16,000. Support by the triangle is found at $34,500-$35,000. Breaking below this support we should see downward pressures on price. However as we mentioned above, I expect this sell off to be the last one and then price to start a major bounce or new upward move that will at least push price towards $45,000. Trend remains bearish as price continues making lower lows and lower highs. There is no reversal signal yet.






Alexandros Yfantis
Analytical expert
InstaForex Group © 2007-2021

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Institutional investors cannot save Bitcoin



Institutional investors and traders are in no rush with new purchases of bitcoin. This, of course, does not mean that there are no buy deals at all now. Otherwise, bitcoin would continue to fall, and not stand in one place. However, the efforts of institutional investors are clearly not enough to create a Bitcoin shortage on cryptocurrency exchanges. After all, it is the shortage of coins available for purchase that makes sellers raise prices, which leads to an increase in the rate of the first cryptocurrency. According to the analytical service Santiment, "whales'' have added another 50,000 coins to their wallets over the past 10 days, but this did not provoke any growth in the value of bitcoin, as retail traders (of which there are many more) and miners continue to actively sell, not believing in the fact that in the near future, bitcoin is able to restore the "bullish" trend. It is also reported that the volume of open positions in bitcoin futures on the Chicago Mercantile Exchange fell to its lowest level since mid-December 2020 - $1.36 billion. The number of active positions has halved compared to mid-April, when bitcoin was at its maximum positions. Thus, the fundamental background, even of this nature, continues to indicate that it will be very difficult for Bitcoin to show serious growth in the near future. Institutions can buy as many coins as they want, but if the rest of the market is actively selling, the rate will not grow. Thus, we continue to expect a drop in bitcoin quotes in the medium term. The best way now to determine the possible direction of Bitcoin movement is through technical analysis. Of course, news from Elon Musk or the governments of China or the United States can come at any time. However, this information is more likely to create additional pressure on the first cryptocurrency than help it. Retail traders must believe again in Bitcoin's growth, but there is no reason for this right now.



Technically, bitcoin on the 4-hour timeframe continues to position itself between the two trend lines, even though they are already as close to each other as possible. Nevertheless, in the near future, a breakthrough of one of the trend lines may be carried out, which, in theory, can suggest in which direction to expect further movement of "digital gold". However, there is a rather subtle point here. Because if bitcoin continues to move frankly sideways, a breakout of any of the trend lines will not be considered a breakout and a signal to open trades. We advise you to be careful. So far, bitcoin is at the lower trend line, so there is a greater likelihood of going to the level of $30,500.





Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

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Technical Analysis of BTC/USD for June 7, 2021

Crypto Industry News:
The end of the Bitcoin 2021 Conference definitely belonged to the President of El Salvador, who announced an action that is an unprecedented confirmation of the revolutionary nature of Bitcoin. Nayib Bukele announced via Zoom that he will be submitting a bill to recognize BTC as legal tender in parliament.

Bukele believes that central banks are increasingly taking measures that may adversely affect the economic stability of El Salvador. He also added that in the short term, the movement would create jobs and help ensure financial integration for thousands of people in the country. El Salvador's central bank will also accept bitcoin as part of its reserves, while citizens will be free to transact using cryptocurrency.

The Republic of El Salvador is a country in Central America that lies on the Pacific Ocean and borders with Guatemala and Honduras. El Salvador is the smallest in terms of area in the Central American Intermarium, but densely populated.

Bukele's speech was taped in advance and it was aired at the conference during a speech by Jack Mallers, founder of Strike, a cryptocurrency wallet built on the Lightning Network.


Technical Market Outlook:
Not much has changed over the weekend as the BTC/USD pair is still testing the lower short-term channel line around the level of $36,050. The momentum is still hovering around the neutral level of 50, but is not dropping lower yet. 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 - $43,458
WR2 - $41,521
WR1 - $38,273

Weekly Pivot - $36,222
WS1 - $33,131
WS2 - $30,800
WS3 - $27,577


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 7, 2021

Crypto Industry News:
The UK's strict anti-money laundering laws seem to be a major stumbling block for crypto companies in the country.

According to the UK's Financial Conduct Authority (FCA), several crypto companies in the country may be getting ready to go out. In a statement released on Thursday, the regulatory agency revealed:

"A significant number of companies do not meet the required standards under money laundering laws. This has caused an unprecedented number of companies to withdraw their applications."

According to the report, 51 companies have so far failed to meet AML FCA standards and may be forced to stop operating in the country.

By withdrawing their license applications, crypto companies must stop all cryptocurrency services or risk fines and legal action from the FCA. Such companies may only resume operations after meeting FCA's AML protocols. Then they will be entered on the list of registered cryptocurrency companies.

As previously reported in the media, FCA expanded its temporary registration system for crypto companies from July 2021 to March 2022. This nine-month extension is expected to give FCA enough time to clear the backlog of pending license applications.

The FCA has 90 pending enrollment applications and only five duly registered UK crypto companies. Meanwhile, some of the 51 companies that have retired their licensing applications may not be covered by the FCA's AML rules, meaning their actions may not result in a forced closure.

Companies that fail to meet AML FCA requirements by the end of the enrollment period will also be forced to return all customer deposits.

In January 2020, the FCA became the AML police force for the UK cryptocurrency market, which marked the start of mandatory business registration for cryptocurrency companies in that country.


Technical Market Outlook:
The ETH/USD bounce has bounced from the level of $2,639, which is a local technical support for the price and might be developing a Triangle pattern around the current levels. 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 - $3,628
WR2 - $3,236
WR1 - $2,995

Weekly Pivot - $2,426
WS1 - $2,383
WS2 - $2,000
WS3 - $1,765


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