Cryptocurrency Analysis

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Cryptocurrency traders found new market assessment tool through "Fear and Greed Index"

The relatively young cryptocurrency sector continues to develop, acquiring its own instruments. The traditionally meager stock of criteria for evaluating the token market has now been replenished with its own "fear and greed" index.

Progressive crypto enthusiasts are now breaking spears in heated battles about the reasons for the 21% drop across the entire web of tokens, including Bitcoin, and to a slightly lesser extent Ether.



In particular, it became known that they are actively promoting the new fear and greed index via Twitter and other social networks to reinforce the view that the recent price drop is actually a great opportunity to support Bitcoin.

Recall that in traditional markets, fear and greed indicators are an indicator of investor sentiment based on factors such as volatility, momentum, and demand.

The crypto version developed by Alternative.me should help traders and investors determine if traders are overly optimistic (greed polarity) or bearish (fear polarity). Unlike a traditional index, the crypto VIX takes into account several other factors - typically informational, such as social media trends and Google searches.

The index ranges from 0 ("Extreme fear") to 100 ("Extreme greed"). It currently stands at 25. When Bitcoin hit an all-time high of nearly $69,000 last month, it was around 80.

Crypto VIX traders interpret the index, as well as the relatively lower bitcoin price, as being oversold and that prices are about to rebound and go to "the moon," said Troy Wiipongwii of the blockchain research lab at William & Mary University.

The index images posted on Twitter are referred to by some as "sexy" and replace the word "fear" in the image with the word "buy".

Many private crypto investors are in favor of the index.

"We have so little information about cryptocurrencies that this 'fear and greed' index becomes important for understanding market sentiment," says Ali Yilmaz, an investor. "I buy fear and sell greed."

Bitcoin enthusiasts have used a number of reasons in the past to explain why falling Bitcoin prices are perfectly normal, including comparing it to previous bull races or saying that volatility is part of the digital currency's DNA. The experts also shared several unexpected reasons that could trigger the recent drop in BTC and altcoins.

Indeed, the market has long been ripe for the introduction of its own tools that will help players assess the market situation quickly and efficiently.

However, in this index, an attempt to interpret any drop in digital coins as a reason for buying is alarming. Obviously, this is a clear attempt by the developers and fans of the index to stimulate demand in times of correction. Interestingly, with wider distribution, this index can indeed induce many to buy on the downturn, which means it can really influence the quotes in the future.

In addition, while experts say the index can technically be a marker of market sentiment, it has serious flaws.

"Ultimately, no indicator or index can fully predict market movements," Wiipongwii said. Indeed, as the market role of Bitcoin and other altcoins changes, it is clear that their relationship with macro factors will change. Index developers will have to constantly introduce new calculation algorithms to keep the index up to date.





Egor Danilov
Analytical expert of InstaForex
© 2007-2021

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Hearings on the regulation of cryptocurrencies in Congress begin. Industry executives walk on thin ice

On Wednesday, the heads of six major representatives of the cryptocurrency industry are going to ask Congress to act cautiously by introducing new rules regarding digital assets. Otherwise, they risk directing the mining and turnover of the crypt underground or outside the United States.

Hearings on the regulation of cryptocurrencies in Congress begin

On the eve of the hearings in the Financial Services Committee of the US House of Representatives, which begin at 10:00 Eastern standard time, the leaders of the world's largest crypto companies announced that they are going to support clearer rules of market regulation. But in addition, they want to emphasize that excessively restrictive measures will not suppress activity, but simply push it away from the reach of the United States.



"Without special legislative solutions that are openly discussed with public participation, the United States risks unnecessarily burdensome and intimidating laws and regulations," Alesia Haas, Coinbase Inc.'s chief executive, warned in testimony released Tuesday.

"This can effectively push crypto activity underground or to offshore exchanges that have little or no compliance programs."

The testimony released by the commission before the hearing lays the groundwork for what will probably be the most high-profile and closely monitored high-stakes event. Part of the reason lies in the fact that American lawmakers are categorical and put additional pressure on the leaders of the cryptocurrency so that they protect their business and concretize ideas for their control.

"It would be productive for us if the leaders presented an active agenda regarding what Congress can do to protect consumers and investors, the government will receive its taxes, and criminals and terrorists will be banned from using cryptocurrency," said analyst Jaret Seiberg from the Cowen Washington Research Group.

Some managers advocate a simplified regulation regime.

"There are several examples of US regulatory decisions that are legal abroad, which harms American investors, innovators, and workers," said Bitfury CEO Brian Brooks.

"There is a reason why cryptocurrency talents are no longer concentrated in Silicon Valley, the birthplace of the original commercial Internet," he believes.

Is the crypto industry in the future or already in the past?

The rapid growth of cryptocurrencies and, in particular, "stablecoins", which are digital assets whose value is tied to traditional currencies, has attracted the attention of regulators who fear that they could jeopardize the financial system if they are not properly controlled.

Some politicians, such as Senator Elizabeth Warren and Securities and Exchange Commission Chairman Gary Gensler (a well-known defender of cryptocurrencies), are also concerned that the products may be used for illegal purposes or to benefit unsuspecting consumers.

In November, a working group led by the US Treasury recommended to Congress to adopt a law according to which stablecoins should be issued only by firms that have insured deposits, for example, banks. According to analysts, Wednesday's hearing may serve as a good indicator of how likely it is that Congress will pass such legislation on digital currency.

In fact, despite the restrictions that many semi-legal firms operating with stablecoins face, this will have a beneficial effect on the industry in the end.

Well, it seems that the heads of companies are not going to give the advantage of the play-off, for which they have developed a unified approach to the upcoming hearings. They are guided by the belief that the US will not be able to give up the benefits of the turnover of BTC and other tokens.

"Stablecoins and their capital markets on the Internet are not too big to go bankrupt, but now they are too big to ignore," said Jeremy Allaire, CEO of Circle Internet Financial. "The policy framework should support an open and competitive playing field and allow new technologies to flourish."

Proponents say that stablecoins can revolutionize payments by offering a reliable, inexpensive, and instant way to transfer funds around the world. Executives say the United States should play a leading role in the development of this technology, just as US regulations allowed the Internet to flourish in the early 1990s.

"Let's work together to ensure that US policymakers will be the ones to lay the groundwork for a productive, smart, and regulatory roadmap for this technology worldwide," Denelle Dixon, head of the Stellar Development Foundation, said in a prepared speech.

"I hope that we can all agree that cryptocurrency and stablecoin should not be buzzwords thrown around to incite fear of the unknown."

But the calculations of industry leaders may not be justified. The increased demand for bitcoin and other tokens, which has been observed since the beginning of the pandemic, is a direct consequence of the surplus of the cheap dollar due to low-interest rates from the Fed.

In addition, cryptocurrencies are too volatile, so there are always enough bulls and bears in the market to provide sufficient liquidity.

Being under pressure from the banking sector, which makes full use of the opportunities of the crypto market to ensure profitability on the portfolios of its investors, US politicians condescendingly turn a blind eye to illegal trafficking for $ 3-4 billion and such "trifles" as cases of large extortion or theft using cryptocurrencies.

However, when the era of cheap loans ends, bankers will start withdrawing money from the cryptocurrency markets. The role of bitcoin and other altos in portfolio investments will decrease, and then Congress will cease to be a "kind uncle."

The heads of crypto companies should take advantage of the opportunity that Congress (temporarily) provided them and offer a clear and fairly transparent scheme for using blockchain in calculations. Because if they don't do it now, the legislators will do it on their own. From which the holders of the crypt are unlikely to benefit.

Or the regulator will simply put a big fat cross on the industry that has become unnecessary - until the next major crisis when banks will again need a gray market for speculation.

Of course, transparent regulation implies paying taxes and declaring all transactions with the crypt, but only this will help legitimize the industry. And fans of gray methods will have to adopt the methods of bankers who got the hang of hiding assets in the last century.






Egor Danilov
Analytical expert of InstaForex
© 2007-2021

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Trading signal for BITCOIN on December 08 - 09, 2021: buy above $50,500 (200 EMA)



After the sudden drop on December 4, BTC has entered a constant recovery phase. Altcoins also follow the flagship cryptocurrency. Bitcoin is likely to continue to recover from the loss of more than 30%, only if it consolidates above the psychological level of $ 50,000.

At the beginning of the American session, it is trading at 49,107. This represents a negative signal. If the crypto carries on trading below the 200 EMA and below 0/8 of Murray, more falls are expected in the next few days.

The short-term resistance barrier that BTC wants to test at 55,201, (21 SMA) remains the target for the bulls. If Bitcoin trades above 50,200 in the next few hours, we will have an opportunity to buy with targets at 55,200 and up to 1/8 of a Murray at 56,250.

If BTC breaks above the 55,200 level, it could again reach the psychological level of 60,000 and climb up to the all-time high of 68,962. On the contrary, as long as it remains below the 21 SMA and the 200 EMA, the crypto is expected to decline to -1/8 Murray at 43,750 and down to the psychological level of 40,000.

The eagle indicator touched the extremely oversold level around 5 points. Therefore, Bitcoin is expected to continue the technical rebound and may reach the resistance of 56,250 in a few coming days.


Support and Resistance Levels for December 08 - 09, 2021
Resistance (3) 53,365
Resistance (2) 52,621
Resistance (1) 50,773

Support (1) 48,924
Support (2) 47,827
Support (3) 43,750


A trading tip for BTC on December 08 - 09, 2021
Buy above 50,500 (200 EMA) with take profit at 55,201 (21 SMA) and 56,250 (1/8), stop loss below 49,100.







Dimitrios Zappas
Analytical expert of InstaForex
© 2007-2021

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BTC analysis for December 08,.2021 - Downside continuation in the play


Technical analysis:



BTC has been trading downside today after the very weak close daily close yesterday. I see further downside continuation.


Trading recommendation:

Due to strong selling pressure today and the downside trend in the background, my advice is to watch for selling opportunities on the rallies.

Downside targets are set at the price of $47,285 and $42,240.

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

Resistance level is set at the price of $52,000





Petar Jacimovic
Analytical expert of InstaForex
© 2007-2021

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Trading plan for Bitcoin on December 08 2021



Technical outlook:
Bitcoin bounced off around $42,500 over the weekend. The crypto might have found support around the 18 months trend line support as seen on the daily chart. It rallied through the $52,000 highs on Tuesday and faced mild resistance there before pulling back towards $49,000. Bulls would remain inclined to be back in control ahead of the $42,500 lows in the near term.

Bitcoin retraced its recent upswing between $28,600 and $69,000. The Fibonacci 0.618 mark around $44,000 provided the necessary support and bounce as depicted on the daily chart. High probability remains for a bullish turn from here and push higher towards $70,000 at least. A push above $52,000 will be now required to accelerate further according to the price action.

On the flip side, if the price drops below $42,000, Bitcoin would drop further through the $40,000 initial support as marked on the chart here. A break below $40,000 would suggest a further decline towards $28,600. For now, the structure remains bullish against $40,000.


Trading plan:
Potential rally through $70,000 against $40,000.

Good luck!






Oscar Ton
Analytical expert of InstaForex
© 2007-2021

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Wave analysis for BTC/USD on December 8, 2021


BTC/USD, H1 timeframe:



According to Elliott's theory, the first half of a descending simple zigzag is formed for the main currency pair BTC/USD. Only the first part of this zigzag – wave [A] can be currently noticed. This wave is an impulse pattern that consists of five sub-waves (1)-(2)-(3)-(4)-(5).

Following the end of the downward impulse [A], two parts of the upward correction [B] were formed – the initial diagonal (A) and the correction (B). Accordingly, growth in the final wave (C) should be expected in the near future. It can take the form of an impulse or a finite diagonal.

The entire correction wave [B] can be built to the level of 58410.00. This level is determined using the Fibonacci line tool. At the specified price point, the magnitude of the wave [B] will be 50% of the impulse wave [A]. There is a high probability of achieving this coefficient.

Therefore, an upward movement of the market is expected in the near future, which means it is worth considering opening buy deals.


Trading recommendation:
It is recommended to buy from the current level and take profit at 58410.00.





Roman Onegin
Analytical expert of InstaForex
© 2007-2021

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Quantum Economics: Pullbacks are inherent in the market



Bitcoin, which is the largest crypto coin, has demonstrated a steady recovery and is growing for three days in a row after its value collapsed on Saturday by more than 35%. Chart observers predict that such a rally will be able to push this digital token back to the area of 55700 dollars per coin.



On Tuesday, this coin showed a 3.6% increase to $51,897, while other smaller tokens also showed growth.

According to Bloomberg Intelligence analyst Mike McGlone, the cryptocurrency market has resumed a more stable bullish trend. The market has seen speculative traders exit stop orders, and they attract more sustainable buy-and-hold types.

Bitcoin and other cryptocurrencies strongly fell in price this weekend amid a stronger anti-risk sentiment, which also included sell-offs in many areas of the US stock market. This happened as a sharp rise in inflation forces central banks to tighten monetary policy, threatening to reduce the tailwind of liquidity that has lifted a wide range of assets.

Mati Greenspan, Quantum Economics founder, and CEO said that it is important to remember that such pullbacks are an integral part of a market that is increasingly hungry for excessive risks. From time to time, the riskiest parts of the market, in this case mainly mime coins and metaverse tokens, really need to be dumped.

"Let's hope we've already seen the worst of it," Greenspan added.






Andrey Shevchenko
Analytical expert of InstaForex
© 2007-2021

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Bitcoin Salary: Take a Queue

The bitcoin exchange rate recovered after the biggest drop over the weekend from $56,000 to $42,000. Many, including the largest players, took advantage of this moment and bought the world's first cryptocurrency that had fallen in price.

A similar collapse was observed in altcoins, but there the correction took place in different ways. Not only did the ether manage to win it back instantly—returning to a level above $4,000, but even then the demand did not decrease, and at the time of writing this review, ETH is testing the $4,400 border.



Who gets a salary in bitcoins?

Recently, there have been more and more slogans that no matter how bitcoin is tried to be introduced into the real world of settlements and payments, it is unlikely to be done in the near future. In the next 3-5 years, the cryptocurrency will remain either a purely investment or a highly speculative instrument. The main reason is its excessive volatility. Would you agree to receive a salary that would decrease by more than 20% the next day? The report is obvious.

If you got paid for your work last Friday, your wallet would drop 21% on Saturday. The fall in bitcoin happened in a matter of hours. Yes, technical factors, of course, contributed to the fall—the main one was the dumping of the "marginalists," who pretty much picked up positions counting on crazy profits by the end of the year, when bitcoin "will definitely be at 100K." But the fact remains—there is nothing good about it. The rapid decline only underscores the danger of an emerging trend fanned by politicians and celebrities receiving payments in cryptocurrency.

In the U.S., there are more and more calls to invest in the fast-growing cryptocurrency industry, and the leaders of the crypto industry are trying to promote policies that aim to receive salaries in cryptocurrency. A prime example is Miami Mayor Francis Suarez, who announced last month that he would receive his next paycheck in Bitcoin. Suarez also announced recently that he is working on a plan to pay more than 4,000 city government employees in cryptocurrency. Not only that, he also promised that city residents would be able to pay taxes in bitcoins.

New York City Mayor-elect Eric Adams also recently noted in an interview that he is exploring ways in which the millions of people working in the largest city in the United States could be paid their salaries directly in Bitcoin and other cryptocurrencies. He also noted that he will receive his first three salaries in Bitcoin.

Sports and show business stars also do not miss the opportunity to promote the crypto industry. Professional athletes Russell Okung, Odell Beckham Jr., and Aaron Rodgers have said they will be paid, at least in part, in cryptocurrency.

But despite the disadvantages, which are huge, there are also advantages, which politicians and stars are focusing on - the possibility of big profits, since many private investors are looking more and more at the field of cryptocurrencies, which is still highly profitable. Cryptocurrency could certainly fall, they said, but it could also rally to levels much higher at which wage payments were made.



Iceland will no longer accept miners

Iceland has begun an active struggle with miners and is not going to let them into its territory. Sharp power outages in Iceland have led the island's main company, Landsvirkjun, to cut supplies to some industrial clients such as aluminum smelters, data centers, and fishmeal factories. The company said on Tuesday that the low water level in the accumulator tank, a power plant malfunction, and a delay in receiving electricity from an external generator led to an immediate reduction in power.

Currently, Iceland's largest consumers of electricity are its giant smelters, built decades ago to generate cheap energy. Now, in the short term, cryptocurrency miners, tempted by the cheap electricity needed to mine new coins, now have nothing to do there.



As for the technical picture of Bitcoin

A clear return and consolidation above the level of $50,220 further fuel the demand for the asset that has fallen in price. The main task of buyers now is to break through the level of $53,190, going beyond which will provide good growth and return to $55,930, and then up to $59,400, which will put a "fat point" in the fall of the cryptocurrency on December 3. It will be possible to talk about the return of pressure on BTC after it returns below $50,220, which will definitely push it to the $46,900 region and open the way for $42,300.



As for the technical picture of Ethereum

While the bulls are actively fighting for the level of $4,404, a breakthrough of which will push buyers' interest in order to enter $4,647, and the historical maximum of $4,860 nearby. A good support and an area where large buyers will show themselves is the level of $4,140. It is of interest and I recommend relying on it. A breakout of this area will clearly create problems for traders, pushing Ether by $3,912 and quite possibly increasing pressure up to the $3,680 test—a bad call to end this year.






Jakub Novak
Analytical expert of InstaForex
© 2007-2021

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Is Bitcoin waiting for a V-shaped recovery?


On Tuesday evening, Bitcoin looks technically very good, which is especially pleasing.

According to Santiment, analytical data on the main cryptocurrency show that the recovery, during which Bitcoin rose to $ 52,000 per coin, is associated with calls in social networks to "buy the dip."

Buy the dip or Dead cat bounce?

Details:
Buy the dip - purchasing an asset after it has dropped in price
Dead cat bounce - small, brief recovery in the declining price

Earlier, Bitcoin's daily recovery is 5.86%. And although this is very good after a 20% decline over the weekend, everything is not so technically clear: the price is again at a fork.

On Monday, two possible scenarios were discussed: a pullback to the area of $ 52,000 - $ 53,000 per coin and a breakdown of the support at $ 48,000. The first one was realized.

Now, there is a new fork, and it is more important this time since we are talking about breaking through the border separating the bear market from the bull market.

Here, two scenarios can also be considered: a decline and transition to lateral dynamics within the range of 48,000 - 52,000 dollars, or breakdown of the zone of 52,000 - 53,000 dollars and consolidate higher.

We can talk about a V-shaped recovery in the second case. But in the meantime, there is a risk that the current recovery will be a "dead cat bounce or a small, brief recovery in the declining price."


What caused the market to collapse?
Santiment reported that renewed fears related to the COVID-19 pandemic among larger market participants could be one of the reasons for the collapse of cryptocurrencies. Apparently, the broad market sell-off was caused by profit-taking by institutional market participants.

Reports show that institutions sold over $500 million worth of Bitcoin, which caused an "aggressive liquidation" in the crypto derivatives market, which led to a drop.

In addition, the company explained the large long shadow on the Saturday afternoon candle by the fact that a large number of users began to redeem this drop.


But what about the ambitious goals for Bitcoin's growth?
In November, JPMorgan analysts updated in their analytical review the Bitcoin price forecast by $146,000 per coin in the long term. These goals were calculated with the expectation that the volatility of the cryptocurrency would fall and institutional investors would prefer BTC instead of gold.

Then analysts led by Nikolaos Panigirtzoglou showed that they see Bitcoin as a scarce product that increasingly competes with gold for investors' preferences as a hedge against inflation. They argued that gold has not responded to increased concerns about inflation in recent weeks, which is at a 13-year peak in the United States and is rising sharply around the world.


New threats
However, another factor has appeared on the market. Rising inflation requires the Fed to tighten monetary policy. According to some experts, the curtailment of quantitative easing, the rise in the cost of money may become the external factor that will put pressure on risky assets, including cryptocurrencies.

Therefore, the expectation of hawkish actions from the Fed may not let Bitcoin go higher yet. This is one of the reasons why the well-known stock-to-flow (S2F) cryptanalyst PlanB model has stopped working.







Ekaterina Kiseleva
Analytical expert of InstaForex
© 2007-2021

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Bitcoin: digital gold will cost $100,000, but now with a shifted schedule, and not in 2022, but in 2023



Bitcoin bull and InTheMoneyStocks chief market strategist Gareth Soloway predicted that bitcoin would still hit the $100,000 milestone, but said it could reach that level in 2023.

The analyst stated that bitcoin is still ready for a further pullback, after which the price will enter an even more difficult period, which may last until 2023.

According to Gareth, back in August, he predicted that the price of bitcoin would fall to $20,000, indicating an "unconditional" rise in bitcoin.

"One of the things I was talking about is that bitcoin will eventually reach the $18-20,000 mark. I really have no questions," he said. He also warned people against buying before the April highs in October, citing this as a possible landmine.

Be that as it may, the crypto community is coming to terms with its failed bitcoin price forecast after almost all of their bullish quarter forecasts continue to fade into oblivion.

Their forecast was broken after the market went into a frenzy of short selling on Saturday morning, causing bitcoin to fall below $43,000, which nevertheless became its biggest sell-off in more than four months.

Willy Woo temporarily postponed his forecasts that the asset will reach $100,000 by the end of the year, citing many factors, including Omicron's fear and possible whale counterfeiting on major exchanges.

Bitcoin fell almost 5% on Monday as the start of the week gave no respite to the world's largest cryptocurrency after a tiring weekend when at one point it lost more than one-fifth of its value.

As a result of the debacle, the bitcoin price and the amount invested in bitcoin futures returned to where they were at the beginning of October, before a massive price spike occurred on November 10, as a result of which the token reached an all-time high of $69,000.

Traders said the weekend's drop was due to a broad shift away from riskier assets in traditional markets due to concerns about the Omicron coronavirus variant combined with lower trading liquidity, which tends to hit cryptocurrencies over the weekend.

"The leverage markets have been completely reset, and the open interest in the leverage markets has been completely reset."

Over the weekend, when prices fell, investors who bought bitcoins by margin saw exchanges close their positions, which caused a cascade of sales. According to Coinglass, on Saturday, a number of retail-focused exchanges closed long positions on bitcoin worth more than $2 billion.

Ether, the second largest cryptocurrency in the world, was also affected on Saturday, although not as much. However, it fell 5.5% to $3,965 on Monday, compared with a November 10 high of $4,868, although it rose compared to a larger competitor.






Vitaly Kolesnikov
Analytical expert of InstaForex
© 2007-2021