Cryptocurrency Analysis

[IFX_Selena]

BTC analysis for July 13,.2021 - Downside continuation and potential for drop towards $30.000

Technical Analysis:



BTC has been trading downside as I expected. The main cause for the downside movement was the breakout of the bear flag pattern in the background.


Trading recommendation:
Watch for selling opportunities on the rallies using the intraday time-frame. Downside targets are set at the price of $30.000 and $29.000.




Petar Jacimovic
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Large investors continue to accumulate bitcoin - bullish signal

While the bitcoin exchange rate stands in one place and does not know which direction to choose, according to CryptoCompare, in June of this year, for the first time in 2021, more cryptocurrency derivatives were sold than real coins. Trading volumes on both the spot and derivatives markets decreased by more than 40% last month. After the biggest drop in May, the market share of derivatives in June was 53.8% compared to 49.4% in May. The volume of derivatives in June amounted to $3.2 trillion, and the total spot volumes reached $2.7 trillion.

The company notes that during the crypto winter, which was observed after the largest bitcoin jump in 2018, the cryptocurrency derivatives market often exceeded the spot market.

In the chart below, you can see the monthly drop in the volume of bitcoin futures trading in billions of US dollars.



It is clear that as a result of the fall of bitcoin and the decrease in volatility, spot trading volumes decreased by 42.7%, while in June of this year, the total volume of derivatives fell by only 40.7%. Open interest in bitcoin and ether futures also fell by 31.8% and 29.3%, respectively. At the moment, the largest derivatives exchanges are Binance, OKEx, and Bybit.

But despite this, there is also good news, which once again proves the competent approach of investors to the market.

Speculators are again decreasing, but the number of real crypto enthusiasts is only increasing. The Glassnode report indicates that BTC reserves on centralized exchanges fell to April levels when bitcoin was above $60,000. Last time, during the growth phase, most of the BTC was bought by Grayscale Bitcoin Trust and other institutional funds, which led to a constant net outflow of cryptocurrency from exchanges. But when a sharp decline began in May, speculators and investors quickly returned to the market and began to move coins to exchanges en masse for subsequent sale. This only accelerated the decline of the market in the future. Now, judging by the graph, investors have started accumulating the first cryptocurrency again.

This is a very good sign for the cryptocurrency market, as it indicates that large investors who actually earn on the market believe in the further growth of bitcoin in the future and are in no hurry to get rid of it. Apparently, even in the case of a fall to $10,000, which everyone has been talking about so much lately, nothing will change for the industry. It is enough to recall the fall of bitcoin to the level of $3,500 after rising to a maximum of $20,000. Large investors remained and continued to accumulate their positions, which then resulted in an increase in the area of $60,000. History repeats itself.



As for the technical picture of bitcoin, it has not changed after the weekend. Buyers have real problems with the breakout of the $36,000 resistance, which creates quite a lot of problems for further growth. A breakout of this range will lead to a new upward wave to the upper border of the side channel of $41,100. Only after the breakout of this range can we seriously talk about a new wave of BTC growth to the highs of $46,700 and $52,000. The bears face a completely different task. First, they need to prevent bitcoin from going above $36,000, and then somehow break below the support of $32,400, which was formed at the end of last month. Only after that can one expect a decline to the area of the lower border of the side channel at $30,000. A breakdown of this level will collapse the rate to the lows of $25,700 and $21,650. It is still too early to talk about $10,000, but in the future, this level can become the real bottom of the cryptocurrency market.



In conclusion, I would like to say a few more words about the fact that Fidelity Digital Assets plans to pay more attention to the cryptocurrency market. According to Tom Jessop, president of Fidelity Digital Assets, the company plans to increase its staff by 70% at once, because the demand for cryptocurrencies continues to increase, as well as interest in this industry in general. Fidelity Digital Assets is an asset management subsidiary of Fidelity Investments. Jessop also noted that he is facing a great demand for ether.

The new employees will focus on creating new products that are offered in the crypto asset market, in addition to bitcoin. The company will also provide services for trading digital currencies.





Jakub Novak
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Trading plan for Bitcoin for July 13, 2021



Technical outlook:
Bitcoin continues to trade in a range between $33,000 and $34,500 since last few trading sessions. It continues to provide range trading opportunities for traders as they continue to buy around $32,800/33,000 and take profits close to $34,000/500 levels respectively. It is still advisable to continue buying close to $33,000 and take short term profits close to $34,000/500 levels respectively.

Bitcoin is seen to be trading around $33,000 levels at this point in writing and is expected to push through $34,500 at least from here. Immediate support is seen at $28,000 mark while resistance comes in around $36,000, followed by $42,600 levels respectively. The crypto is expected to reach at least $43,000 if prices are able to push through $36,000 levels respectively.

On the flip side, if Bitcoin breaks below $28,500, bears might want to drag further low towards $26,500 and $19,000 levels respectively, going forward. Trading bias remains on the north side for now and bulls might be preparing to rally towards $36,000 levels at least. Short term target can be projected towards $43,000 levels at least.


Trading plan:
Remain long for now, stop @ 28,000, target @ 43,000.

Good luck!





Oscar Ton
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

China and Elon Musk continue to plunge Bitcoin!



The latest drop in the bitcoin exchange rate is inextricably linked to the negative fundamental background from China, the United States, and some other countries, where the regulation of the cryptocurrency sphere has been tightened. Elon Musk, who sometimes likes bitcoin, sometimes does not like bitcoin, regularly added fuel to the fire. Therefore, from a fundamental point of view, bitcoin moves very, very logically. When one of the most famous businessmen and investors in the world, Elon Musk, regularly spoke words of support for the first cryptocurrency, it grew and grew strongly. Now, when Elon Musk criticizes bitcoin, it is not surprising that it no longer shows growth. The same applies to news from China or the United States. According to various analytical agencies, at the end of June, about 70% of Chinese mining companies had already turned off their equipment and were preparing to export it to other countries that are more friendly to mining and cryptocurrencies. Thus, the low volatility of bitcoin in recent years is also due to the fact that the number of miners has sharply decreased and the hash rate of the network has fallen. Of course, all this mining equipment(or most of it) will start functioning again sooner or later. But the very fact that the authorities of one of the largest countries in the world(both in size and economy) have launched an open war against bitcoin speaks volumes. And he, of course, does not give a positive example to many investors and traders. Recall that bitcoin is bought not only by uncles in suits with bank accounts worth several billion dollars. Ordinary people, students, and employees who want to invest a little and earn a little are also interested in Bitcoin. And the fundamental background has an extremely strong influence on such people. Since they are not professional investors, in the event of a drop in the value of an asset, they try to get rid of it and, of course, there is no talk of new purchases. And some large investors and institutions cannot pull bitcoin out of the swamp.

By the way, all the same, Elon Musk recently criticized bitcoin for its slowness. "Bitcoin and Ether use a multi-level transaction system. However, the transaction speed is slow and the cost is high. The advantage of DOGE is that this cryptocurrency maximizes transaction speed at a basic level and minimizes transaction costs with exchanges, "the head of Tesla wrote on Twitter.



Technically, on the 4-hour timeframe, bitcoin quotes have consolidated below the uptrend line, and just yesterday bounced off the Senkou Span B line. Therefore, in the short term, we expect a new fall in bitcoin quotes to the levels of $31,100 and $29,700, which are key for bitcoin. The further fall of the cryptocurrency will entirely depend on the ability of the market to keep the rate above these levels.





Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Bitcoin is expected to fall to $10,000



The situation of Bitcoin has not changed at all for the last few days. Its quotes continue to remain in a very narrow price range, approximately between the levels of $ 32,000 and $ 36,000. Such a channel is very narrow for the leading digital currency. The same can be said about the volatility of this cryptocurrency in the last few weeks. The price changes on average by 1.5-2 thousand dollars per day, which is very small again for bitcoin. Thus, we have all the signs of a flat. A flat is the reluctance of investors to actively trade at this time. Roughly speaking, this means that supply and demand do not change, so the price does not move practically from the spot. It is noteworthy that some crypto experts continue to say that that bullish traders continue to increase purchases. Perhaps, this is the case, but only the second half of the experts believe that Bitcoin will collapse to the level of $ 10,000 soon.

It can be recalled that it was predicted that Bitcoin's quotes would decline at least in the area of $ 19,000 - $ 24,000. In principle, we continue to expect exactly this development of events. We remind traders that listening to cryptocurrency experts is a small task, simply because it should be clearly understood why this or that expert or investor gives this or that forecast for Bitcoin. We have repeatedly drawn the attention of traders to the fact that when an investor who owns decent amounts of Bitcoin (or presumably owns) predicts the price of Bitcoin in 2021 at $ 100,000, then such a forecast is unconvincing. It is clear that this investor wants his assets to continue to grow, and for that, new flows of investments and investors are required in the bitcoin network. Due to such ambitious forecasts and promises of a bright future, many investors are trying to increase the value of their own crypto assets. The same applies to many experts who are closely related to the crypto industry and work, for example, on the exchange. The same mechanism works here. It is very beneficial for these people that investors and traders conduct as many transactions as possible, buy and sell cryptocurrencies as actively as possible, and so on. Therefore, they also provoke public interest with unrealistic forecasts. However, experts who predict a new decline in bitcoin should be listened to, since they hardly have any personal interest.

In any case, it is foolish to expect a new one to start immediately after the completion of the upward trend. It can be recalled that in all cases earlier, Bitcoin lost 80-90% of its value after the bullish trend is over. We see no reason why this time will be different. Moreover, the fundamental background for the entire cryptocurrency market remains extremely negative, and Bitcoin continues to drag most other cryptocurrencies down with it. As a result, sellers may try to break through the levels of $ 31,100 and $ 29,700 again in the near future.



Technically, Bitcoin has declined to the support level of $ 31,100 five times already. Therefore, Bitcoin can theoretically continue a new round of movement to the upper border of the side channel, that is, to the level of $ 40,700. However, it continues to be inclined downwards and may return to the level of $ 31,100 in the near future. In order for Bitcoin to further fall, it should break through the levels of $ 31,100 and $ 29,700. From our point of view, it's just a matter of time.




Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Ethereum continues to move lower as expected.

In ourprevious posts on Ethereum, we noted the bearish wedge pattern and warned that a breakdown was the most likely scenario and price could fall towards $2,000. Price has now also formed another bearish pattern and we now see a price potential dip towards $1,800.



Red lines - wedge pattern

Green line - consolidation break down

Red horizontal lines -Fibonacci extension targets

Ethereum is breaking today out and below the sideways consolidation we were in for a couple of sessions. Current price action implies that a move towards $1,800 is highly likely. Resistance is found at recent high of $2,165, Our first target is at $1,934 and our second and most probable target is at $1,800-$1,790. Short-term trend remains bearish as price is vulnerable to more downside.






Alexandros Yfantis
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

BTC continues to fluctuate, but there are prerequisites for growth

Bitcoin spent June 2021 controversially, testing the bottom at around $28,800 and reducing its market dominance share by 3%. The cryptocurrency began the new month with fluctuations in the usual narrow range, which shifted towards $32,000- $35,000. At the same time, BTC is very successful in defending the long-term support level and shows the prerequisites for a possible bullish breakout.

We are talking about the level of support in the region of $32,500. It is above this mark that the first cryptocurrency has been traded since mid-May. As of July 12, the market has never closed under the indicated line. Given the bearish sentiment of the main indicators, the $32,500 mark becomes a platform for a possible reversal of the bitcoin price movement. In the short term, the MACD indicator is showing a bearish crossover and the RSI is below the 20 mark, indicating that interest in the cryptocurrency is waning. A similar trend is shown by daily trading volumes, which fell to $20 billion. In addition, social activity on the bitcoin network remains in the negative zone of -1.16. This is a record high since 2019, indicating a clear distrust from retail players entering the market with short-term goals.



Despite the obvious skepticism from the retail audience, whales continue to increase their presence in the asset. Over the past week, the number of bitcoins on the wallets of major players has increased by 65,000. This can provoke a local shortage of coins on the exchanges, which can become an impulse for price growth. However, this will not happen if the big players do not start walking. At the same time, there is a trend towards a possible recovery of BTC/USD quotes to local highs. This is evidenced by the positive level of the bitcoin financing rate, which was recorded on the largest cryptocurrency exchanges.

The main problem of bitcoin at the current stage is a series of difficult resistance zones in both directions, which prevent the asset from making a bullish or bearish breakout. Staying close to the averaged positions of the price range of $32,200 - $40,500, BTC cannot form a single movement front. At the same time, the main technical indicators point to the formation of a bullish trend, which does not develop due to the passivity of institutions and fears of retail traders. This situation was formed due to several factors. One of them was the recovery of the classic stock markets, which took away part of the audience of their crypto market. This is evidenced by statistics, which show trading volumes on cryptocurrency exchanges fell by 55% in June. Institutions do not take short-term actions and look to the long-term, which is not able to affect the current rate of the cryptocurrency. Considering all this, the market needs time to accumulate the required volumes. As of July 12, technical indicators are showing growing bullish sentiment, but there will be no strong upward movement in the coming week.



In a narrower perspective, bitcoin will continue to fluctuate within the lower horizontal support zone of $32,200, with the prospects of a bullish breakout to $36,000. In the hourly perspective, the MACD indicator forms a bearish intersection and continues to move down. The RSI indicator shows a slight upward movement, which will end around 20. Despite the pessimistic short-term prospects of bitcoin, everything is getting better globally. The mining industry is resuming work at full capacity, thanks to which the hashrate in the BTC network is growing rapidly. In addition, since July 5, bitcoin mining companies have resumed accumulating cryptocurrency. The interest of large companies in bitcoin is gradually resuming. The asset management fund Lincoln Avenue Capital bought a thousand bitcoins for $33,500. However, long-term purchases are unlikely to contribute to breaking through the local bearish flag, which has almost formed on the bitcoin charts. The next few days will show the market sentiment and determine the further movement of BTC quotes.







Artem Petrenko
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Bitcoin: Low volatility becomes a problem

Bitcoin continues to trade sluggishly, staying below the level of 34,708.27. Technically, this dynamics leaves preconditions for a decline to support a wide sideways range of 31,082.82 - 41,980.24. But it is unknown when it will reach this border. To do this, you first need to update the lows on June 8-9.

It is very inconvenient to trade BTC/USD with such sluggish dynamics in the middle of the sideways. And it is better to wait for reaching one of the boundaries of the corridor 31,082.82 - 41,980.24. But low volatility also has other side effects - a decrease in the volume of cryptocurrency trading on exchanges.

This is certainly not the main reason, which is a consequence of other global processes. But it certainly plays a role of its own: it is inconvenient to trade speculatively with such sluggish dynamics, which is confirmed by statistical data.

Research data from Monday showed that trading volumes on major cryptocurrency exchanges fell more than 40% in June. The Chinese crackdown on miners was not in vain. The second reason was the decrease in volatility.

Research by London-based CryptoCompare showed that spot trading volumes fell 42.7% to $2.7 trillion, while derivatives trading volumes fell 40.7% to $3.2 trillion.

For the cryptocurrency market, China's policy remains a headwind. A drop in the price and volatility of cryptocurrencies leads to a decrease in spot volumes.

In June, the main cryptocurrency lost more than 6%, hitting its January low. And the upheavals in May, which began with the decision of Elon Musk and intensified by the Chinese ban, cost bitcoin a loss of 35%.

Now that bitcoin is in a narrow range between 30,000 - 35,000, trading volumes are falling. Cryptocurrency is not very interesting with such low volatility. Volumes tend to rise sharply during periods of sharp price fluctuations. In addition, miners are now accumulating coins without selling bitcoin on exchanges.

CryptoCompare also notes that the major cryptocurrency exchange Binance, which has received close attention from regulators around the world, has retained its position as the largest platform in terms of spot trading volume. Nonetheless, sales on Binance fell 56% in June to $668 billion.

Other research from Glassnode and Santiment's analyst team shows optimistic signs in the market.

Mining companies have resumed accumulating bitcoins without selling them. This reduces the pressure on the main cryptocurrency as fewer coins are sold.

In parallel, the recovery of the bitcoin hash rate was noted, which can also be regarded as a positive sign for the market after the Great Mining Migration.

At the end of June, due to the persecution of miners in China, the BTC hash rate collapsed from an all-time high of 171 EH/s to 58 EH/s, reaching its lowest level since 2019. Now the hash rate has partially recovered, reaching 92.5 EH/s.

Against this background, the expectations of a possible reversal of BTC/USD from the support of the sideways 31,082.82 - 41,980.24 upwards and the growth of the cryptocurrency do not lose their relevance in the medium term. But you still have to go down there.






Ekaterina Kiseleva
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

JPMorgan: El Salvador and bitcoin may face serious problems amid bitcoin adoption

According to JPMorgan Chase & Co., the risks that El Salvador bears after the introduction of bitcoin as a legal tender are very significant, which can create a number of problems for both the country and the cryptocurrency.

Bitcoin trading volume is currently around $40-50 billion per day, but most of it passes through major cryptocurrency exchanges. Another part of bitcoin is blocked on illiquid addresses, while more than 90% of these bitcoins do not even change hands for a year or more.

After the statements made by the authorities of El Salvador, the daily payment activity using bitcoin in the country jumped to 4% of the volume of transactions within the network, which is about 1% of the total volume of issued tokens. This can seriously affect the prospect of bitcoin as a means of volume.



The initiative of El Salvadoran President Nayib Bukele to make bitcoin a legal tender in the country has caused a lot of controversy about whether it is profitable and what problems can result from it. Bukele said that bitcoin will help counter the low level of banking services in the country and reduce the cost of money transfers. But the International Monetary Fund, which is currently negotiating with El Salvador about its loan program, is among those who question this rationale. Even many supporters of bitcoin say that it is really a good means of saving, but its usefulness as a payment mechanism is significantly limited.

The IMF is confident that El Salvador's adoption of bitcoin as a legal tender may entail a number of risks and problems on the side of the Central Bank. The adoption of bitcoin as a legal means of payment raises a number of macroeconomic, financial, and legal issues that require careful analysis. The IMF experts believe that crypto-assets can create significant risks, and effective regulatory measures are very important when working with them.

But, in addition to this, JPMorgan also sees a number of other problems related to El Salvador and bitcoin. Recent surveys among experts indicate a fairly widespread skepticism about bitcoin as a means of exchange. The high volatility of bitcoin is another problem along with the official dollarization in the country. A steady imbalance in demand for the conversion of bitcoins into US dollars and vice versa can seriously hit dollar liquidity, which will eventually lead to fiscal problems and the risk of inflating the balance of payments, JPMorgan said.

El Salvador has recently approved a law allowing companies to accept bitcoins in exchange for goods and services. President Nayib Bukele stressed that the digital currency will help to resist the low status of the entire banking system of El Salvador, as well as reduce the cost of sending money transfers. He did not forget to mention the great future of the country's economy thanks to the introduction of bitcoin.



As for the technical picture of bitcoin, it has not changed after the weekend. Buyers have real problems with the breakout of the $36,000 resistance, which creates quite a lot of problems for further growth. Going beyond this range will lead to a new upward wave to the upper limit of the side channel at $41,100. Only after the breakout of this range can we seriously discuss the topic of a new wave of BTC growth to the highs of $46,700 and $52,000. The bears face a completely different task. To begin with, they need to keep bitcoin above $36,000, but a breakdown of the lower border of the side channel in the area of $30,000 will collapse the rate to the lows at $25,700 and $21,650.





Jakub Novak
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

BTC analysis for July 12,.2021 - Bear flag pattern breakout and potential for drop towarsd $32.130

Technical Analysis:



BTC has been trading sideways at the price of $33.600 and there is bear flag in creation.


Trading recommendation:
Watch for potential selling opportunities due to bear flag pattern with downside trend in the background.

Downside targets are set at the price of $32.130 and $30.00.

Stochastic is showing overbought condition and fresh bear cross, which is another sign and confirmation for the downside rotation.

Key resistance is set at the price of $35.000.





Petar Jacimovic
Analytical expert
InstaForex Group © 2007-2021