Cryptocurrency Analysis

[IFX_Selena]

Bitcoin: what does its correlation with the Nasdaq show?

The technical picture on the Bitcoin chart is starting to cause concern. The support line of the hypothetical upward channel has not been broken yet. But remember that this channel is just an outline, not a technical constant.

But the fact that the price is hitting the mirrored resistance level of 61,048.64 in the process of an alleged rebound in a trend is starting to cause concern. Well, 60,000 - 61,000 is a key support zone, and, as previously assumed, breaking through it, Bitcoin could fall to $55,000, or even $52,000 per coin.


WHAT DOES BITCOIN'S CORRELATION WITH THE STOCK MARKET TELL US?

According to a recent Bloomberg report, Bitcoin's correlation with the Nasdaq 100 during the pandemic has dropped to almost zero in recent days. The correlation peaked in September 2021. Back then, tech stocks and Bitcoin traded almost in parallel. The correlation between the two has always remained positive since February 2020.

However, the situation has changed in recent months. The Nasdaq is up 11% since late September 2021. On the other hand, Bitcoin added 40%.

This divergence occurs at a time when the main cryptocurrency is considered a tool for hedging inflation. The recent rally in Bitcoin prices, during which it approached the $70,000 mark, was associated with growing price pressures in the global economy.


IS BITCOIN REALLY A FULL-FLEDGED PROTECTION AGAINST INFLATION?

It is difficult to give an unambiguous answer to this question. While many market participants and experts claim Bitcoin is a hedge asset, its recent volatility is once again in doubt. Already, the depth of the correction from the all-time high is 10%, which is starting to cause concern.

In an interview with Bloomberg, Carsten Menke, head of next generation research at Bank Julius Baer in Zurich, expressed his opinion on the matter:

"The lack of consistent and negative correlation between bitcoin and stocks clearly suggests that it is not yet a safe haven."

This is evidenced by the fact that during periods of turmoil in the financial markets, Bitcoin, like other riskier assets, tends to suffer.

But do not assume that everything is lost. Not everyone believes that this fact speaks of the unsuitability of BTC as a hedge instrument.

Esme Pau, an analyst at China Tonghai Securities in Hong Kong, takes the opposite view. Pau calls Bitcoin a "smart" way to hedge inflation.

"I urge investors to focus on the long-term trend and do not think short-term changes in correlation should be considered representative," she stressed.


SO WHAT WILL HAPPEN TO BITCOIN?

A local correction in Bitcoin does not mean a change in the bullish trend. Therefore, in the long term, it is likely to continue to grow. As noted earlier, the main cryptocurrency has about six months more for this.

As for the near future, it is worth focusing on the technical picture. The only question is how much the correction will deepen.








Ekaterina Kiseleva
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Trading signal for ETH/USD on November 18 - 20, 2021: sell below $4,200 (6/8)


Ethereum (ETH) broke sharply the uptrend channel formed since October 9. Right now, the crypto is trading below the 200 EMA (4,500) and a decline is likely to happen in the next few hours towards the level of 3,750.

As Ethereum is below the 21 SMA located at 4,500, it indicates the possibility that it will continue its fall. Ethereum is expected to continue its correction movement in the next few hours towards 4/8 of murray at 3,750.



On October 10, Ether managed to break and consolidate above the 21 SMA. It was trading above this moving average until November 16, when it broke below and now expectations are negative.

As long as ETH trades below the 21 SMA and below the 6/8 murray, there is a possibility that it will continue to fall and could reach the 200 EMA located at 3,169 in the medium term.

The eagle indicator touched the 95-point zone on November 7 that is an extremely overbought mark. Ether is likely to continue trading below the high of 4,863 and could continue the correction in the next few days.

Our trading plan for the next few hours is to sell between the two levels below the 21 SMA (4,500) and below 6/8 of murray, with targets at the psychological level of 4,000 and up to the level of 3,750 which represents a key support.


Support and Resistance Levels for November 18 - 20, 2021
Resistance (3) 4,437
Resistance (2) 4,344
Resistance (1) 4,234

Support (1) 4,062
Support (2) 3,962
Support (3) 3,869


A trading tip for ETH for November 18 - 20, 2021
Sell below 4,200 or if pullback to 4,500 (SMA 21) with take profit at 4,062 and 3,750 (4/8) and stop loss above 4,320 and 4,610.





Dimitrios Zappas
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Bitcoin could drop to $53k: under what circumstances will this negatively affect the global bullish trend?


Bitcoin has been in a correction for the last week, not so much because of negative news, but because of the panic reaction of speculative traders. The coin will continue to be within the upward trend, but there is a possibility of aggravation of the current correction.

A further decline in the price does not cancel out the fundamental bullish mood of the market for the subsequent growth of BTC quotes, however, theoretically, the deepening of the correction may contribute to a significant postponement of a new stage of growth and even a full-fledged trend reversal.

As of 11:00 UTC, Bitcoin is trading in the $60k region and is showing more and more signals for further price declines. The market has formed a powerful support zone and has already bought out the price three times when reaching $58.6k. However, right now, the quotes are starting to decline again, which indicates another line retest.

The more often the price tests a certain zone, the more likely it is to break out on the next entry. And within the current local bearish movement, there is every reason to believe that BTC will continue to decline and enter the fluctuation range of $53k- $57.6k, which is a significant worsening of the correction, not without the help of bears.

The main fundamental factor behind this decline is the excessive volatility of Bitcoin at the current growth stage. According to the historical context, November has always been a highly volatile month for BTC, and given the rise in inflation and the increased correlation with the US dollar, the cryptocurrency received an additional incentive for sharp price surges.

In addition, the local euphoria in the market provoked an influx of short-term investors who want to play on the rise in prices. This category of investors acquired the coin at the $60k level, which makes it psychologically unstable in the opposite upward price movement. Local negativity due to tightening control over cryptocurrencies proved that the market is prone to inadequate reactions, which provoked a sell-off.

It is worth noting the interests of large capital, which are playing down not the first bullish rally. The main strategy of large capital is to "shake up" the retail audience, which, when the price drops, begins to get rid of coins, and further absorb them.

A similar pattern is observed with the current price drop when one of their largest BTC holders purchased 200 coins during a local sale. On the one hand, this is the manipulative behavior of the dominant category of investors, but, on the other hand, this is a significant improvement in the cryptocurrency market, thanks to which the further upward movement will be more systematic and calm.

Bitcoin's technical picture also signals a breakdown of the support zone at $58.6k and a further decline to the $53k-$57.6k area. The MACD is approaching zero, which is a bearish sign and a lack of strength of the upward momentum. The Stochastic Oscillator left the bullish zone, breaking through the 40 mark, which indicates the prevalence of selling over buying. The relative strength index is declining less actively but is also approaching a decline over 40, which indicates a lack of strength in the long-term upward trend.

In the event of a breakdown of $58.6k, buyers will try to redeem the offered volumes, which will slow down the price drop, and for some time we can expect fluctuations in the $56.2k-$56.5k region. Subsequently, the price will break through the local support corridor and start moving along the main range of $53k-$56k.

A fall in the price into this area does not cancel the long-term upward impulse, but if the news background aggravates and the holders are not confident, a local reversal of the medium-term trend can be expected, which could accelerate the decline to $53k and significantly increase selling pressure.

In this case, the likelihood of a full-fledged bearish breakdown of $53k rises significantly and casts doubt on the long-term upward trend.



With a decline below $53k, we should expect a drop in the range of $47.8k-$50k, which coincides with the Fibo level of 0.382. At the breakdown of this mark, a full-fledged bull market is canceled, and the price goes into the stage of consolidation of a protracted correction.

Most likely, the Bitcoin price rebound will occur in the range of $53k-$57k, which fully corresponds to the bullish scenario, and collecting liquidity from this range will allow a much faster start of the recovery period and move on to a full-fledged bullish rally cycle.







Artem Petrenko
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

XRPUSD vulnerable to more downside if price breaks below $1.

XRPUSD is trading around $1.08. Price briefly broke out and above the key resistance trend lines at $1.13 and $1.24, but we are now again below them. Price is now challenging important Fibonacci support and channel levels.



Red lines - bullish channel

Blue rectangle -major support

Black lines -Fibonacci retracement

XRPUSD is challenging the 61.8% Fibonacci retracement and the lower channel support at $1.03-$1.05. Breaking below this support area will put pressure on price and most probably will bring it closer to the major support area (blue rectangle). As long as price is above the blue rectangle area, bulls have hopes of another bull run coming. So far price is making higher highs and higher lows. Ideally price will not break below $1.03.






Alexandros Yfantis
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

BTC analysis for November 18,.2021 - Watch for the brakout to confirm further direction

Technical Analysis:



BTC has been trading sideways at the price of $59,000. Potential for the breakout in next period.


Trading recommendation:

Due to sideways market condition and inside day so far on the market. My advice is to watch for potential breakout to confirm further direction.

Downside breakout of the support at $57,780 can confirm drop towards $54,250

Upside breakout of resistance at the price of $61,150 can confirm test of $62,700

Stochastic is showing downside pressure....






Petar Jacimovic
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Wave analysis for BTC/USD on November 18, 2021

BTC/USD, H1 timeframe:



According to Elliott's theory, the formation of a global corrective trend for the BTC/USD pair is seen. The second half of a large impulse wave (A), which is the first wave of this trend, is shown on the hourly timeframe.

It seems that the impulse wave (A) is fully done. Therefore, the price began to build a new bearish wave after its completion. We see the initial part of the bearish correction, or rather its first impulse wave.

To date, sub-waves 1 and 2 have been fully completed. The initial part of the third wave is being formed on the last section of the graph. The exchange rate is expected to decline to the level of 57673.35 in the near future, where a small impulse sub-wave [1] of a smaller wave level, consisting of sub-waves (1)-(2)-(3)-(4)-(5), can be completed. After that, it is expected to grow in a bullish correction [2], which will not be big.

In the current situation, opening sell deals can be considered.


Trading recommendations: It is suggested to sell from the current level. Take profit is noted at 57673.35.






Roman Onegin
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Cryptocurrencies today: the battle between long-term buyers and leveraged speculators



Bitcoin hovered around $ 60,000 as traders held back the excessive speculation that led to the surge to record highs last week.

It initially declined by 3.4%, but recovered and stayed unchanged. Some said the drop was caused by traders closing positions before the end of the year, but the decline in coins such as Dogecoin and Shiba Inu suggests that speculation has decreased.



"Some cleansing of meme coins might pressure the stalwarts as a necessary part of the evolving, strengthening ecosystem," said Bloomberg Intelligence commodity strategist Mike McGlone. "We say the sooner the better for the speculation machine coins to experience some purging, so as to move on with the adoption process of crypto assets in investment portfolios."

Meanwhile, the market capitalization of Dogecoin declined from $ 80 billion to around $ 31.5 billion.



Shiba Inu also fell from $ 41 billion to $ 26.6 billion.

Carter Henderson, portfolio manager at Fort Pitt Capital Group, said: "For the most part, people are going into the end of the year and taking gains - taking some off the table - as we head into a quiet period in the market. People are just locking in gains."

Bitcoin prices, which are up 108% this year, have been bolstered by key advances such as the launch of three Bitcoin futures ETFs in the United States, despite a string of regulatory measures in China and concerns over new tax reporting requirements in the United States.

McGlone said it could stabilize around $ 60,000, while Ethereum may hit $ 4,000. As such, the next level to watch in BTC is $ 60,000, as it could provoke a large jump to $ 100,000.

"This is a good battle between long-term buyers and leveraged speculators," Henderson said.





Andrey Shevchenko
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Technical Analysis of ETH/USD for November 18, 2021


Crypto Industry Outlook:

Solana Labs co-founder Raj Gokal tweeted that the battle between Ethereum and the so-called "ETH killers" is unnecessary, and the real goal of those working in the cryptocurrency industry should be to include "every human" in Web 3.0.

Gokal commented on the tweet of co-founder of venture capital Placeholder, Chris Burniske, who wrote that "despite the beautiful words, the L1 knives are fully worn. [...]. It affects almost all communication, so don't take what you see and hear as the truth."

In response, Gokal emphasized that "it does not have to be a struggle", arguing that the goal of all people working in the cryptographic space should be to include "everyone" in the 3.0 network.

According to statistics, SOL currently ranks fifth in the ranking of digital assets by total market capitalization at $ 68.8 billion and overtakes fellow ETH killer Cardano (ADA) (sixth with $ 65.5 billion). ETH ranks well ahead of them - in second place - with a market capitalization of around $ 552 billion.

Over the past year, the SOL rate has increased by 11,300%, while ETH has gained 908% during this time.


Technical Market Outlook

The ETH/USD pair has bounced from the level of $4,059 which is just below the 161% Fibonacci projection for the wave 3/C seen at $4,145. The bounce was shallow and very short-lived as the local high was made at the level of $4,337, just above the technical resistance seen at $4,322. The next target for bears is seen at the level of $3,888 (previous wave 4 low). The weak and negative momentum still support the short-term bearish outlook for ETH. Please notice, the five wave impulsive increase might had been terminated at the level of $4,870 already and now might be the time for a deeper correction.

Weekly Pivot Points:
WR3 - $5,138
WR2 - $5,019
WR1 - $4,756

Weekly Pivot - $4,615
WS1 - $4,352
WS2 - $4,211
WS3 - $3,960


Trading Outlook:
The next long-term target for ETH is seen at the level of $5,000. Nevertheless, in order to continue the long-term up trend, the price can not close below the technical support at the level of $2,906. The level of $1,728 (61% Fibonacci retracement of the last big impulsive wave up) is still the key long-term technical support for bulls. The level of $3,677 is the key mid-term technical support for bulls.







Sebastian Seliga
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Technical Analysis of BTC/USD for November 18, 2021

Crypto Industry Outlook:

The Bank of Russia will only fully adopt the central bank's digital currency (CBDC) if the digital ruble meets several conditions in the pilot tests, Governor Elvira Nabiullina said.

Nabiullina spoke about the digital ruble to the State Duma's Financial Markets Committee, revealing more details on the introduction of CBDC.

The Bank of Russia will only accept CBDC after it has made sure that the rubles can be easily converted from cash to digital and non-cash ruble and only on a one-to-one ratio.

"It should be a real, full-fledged ruble, with no discounts or anything else," noted Nabiullina, adding that the central bank expects to test the digital ruble for at least a year before it is actually released to the market.

Nabiullina stressed that the digital ruble should not affect local inflation:

"We assume that the introduction of the digital ruble will in no way accelerate inflation and will not affect inflation" - she noted.

Russia experienced a huge spike in inflation during the COVID-19 pandemic. According to official figures from the national statistics service Rosstat, domestic inflation reached its highest level in almost six years, rising 8.1% in October. The Bank of Russia reportedly expects it to cut its inflation rate to 5% or 6% no earlier than 2023.


Technical Market Outlook

The BTC/USD pair is about to terminate the ABC corrective cycle at the level of $57,685 and might bounce towards the technical resistance seen at the level of $62,188. The next big target for BTC is seen at $70,000, but the first target for the wave 5 is located at $70,508. Nevertheless, the wave 5 might had been terminated at the level of $68,987 already and now the market is developing the corrective cycle. The momentum is weak and negative, which supports the short-term bearish outlook for BTC. The nearest technical support is seen at the level of $57,740.

Weekly Pivot Points:
WR3 - $74,186
WR2 - $71,563
WR1 - $67,476

Weekly Pivot - $68,414
WS1 - $60,726
WS2 - $58,026
WS3 - $54,090


Trading Outlook:
According to the long-term charts 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. This scenario is valid as long as the level of $52,943 is clearly broken on the daily time frame chart (daily candle close below $52,000).







Sebastian Seliga
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Trading plan for Bitcoin for November 18, 2021



TECHNICAL OUTLOOK:

Bitcoin might have carved a potential bottom around $58,400 levels on Wednesday. The crypto could resume its rally towards $75,000 going forward as bulls remain inclined to be back in control. A potential sideways correction might be complete around $58,400 or prices could re-test $56,000 lows before resuming higher again.

The Fibonacci 0.382 retracement of its recent upswing between $40,000 and $70,000 is passing through $56,000 mark. High probability remains if prices drop through the support zone. Also note that the channel support is seen passing close to $56,000 levels as well. Bitcoin should be well poised to resume higher from here soon.

The overall wave structure remains constructive for bulls with potential to rally towards $75,000 at least. On the flip side, a break below the channel support and subsequently below $40,000 would change the near term outlook to bearish. In that case, bears might want to test $28,600 lows before finding some support.


TRADING PLAN:

Potential rally towards $75,000 against $50,000.

Good luck!






Oscar Ton
Analytical expert of InstaForex
© 2007-2021