Cryptocurrency Analysis

[IFX_Selena]

"Crazy diapers" are incomprehensible to regulators

A meeting of the US market regulators on the situation with the "diapers" from Reddit WallStreetBets is due to take place today. It was initiated by the Chairman of the US Treasury, Janet Yellen.

Even before the event, Yellen told reporters that she was trying to achieve a "deep understanding" of the situation with what she called the "crazy" pump of GameStop shares and other assets that have become sensational in recent days.

The head of the Treasury, a former female chairman of the Fed, reacted cautiously to the situation, noting that regulators need to make sure that the work of financial markets is correct and effective. At the same time, private investors should be protected.

According to Yellen, this situation is not for the entire period since the 2008 crisis. It is necessary to understand whether these retail investors have a job, and if not, people need to be supported.

So, for now, the task of the meeting will be to discuss whether the recent pumps are worth the backlash. But what it will be, if necessary, Yellen did not say.

However, the actions of the regulator, even if they follow will not affect the unregulated cryptocurrency market. Does this mean that the coins will accelerate as we have seen in recent weeks with the example of Dogecoin and Ripple? There is no answer to this question yet. Everything is only assumptions.

Meanwhile, for Ripple, the technical picture has not changed. XRPUSD quotes continue to moderate consolidation in the middle of the sideways range of 0.3512 - 0.4348.






Ekaterina Kiseleva
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Short-term technical analysis on Litecoin

LTC/USD today reached a high at $158. In our previous analysis we noted that price could reach $160-65 if resistance was broken. I believe we came very close to our target. However bulls so far were not able to keep prices that high and LTC/USD is pulling back.



Red line - resistance (broken)

Blue rectangle - support (previously resistance)

Green rectangle - support

EURUSD is back testing the break out area of $145. Short-term trend remains bullish. Support is found at $141 and if this level holds, we could see next week a move above $160. The RSI is back to neutral territory. This pull back is considered a buying opportunity and we remain bullish as long as price is above $125. We raise our key support level from $118.50 to $125.





Alexandros Yfantis
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Bitcoin fails conquer new peak, growth cancelled

As it was expected in the morning review, crypto traders were eager to break resistance of the Triangle pattern. However, the bulls exhausted their strength. BTC has not been able to overcome the highs of last Friday, so the price tumbled inside the Triangle.

Now this technical picture sets the stage for weakness of the most traded cryptocurrency. The upward target is seen at $35,828.56. This target has been nearly reached. The strong mirror support is at $34,708.27. A bounce is possible from this level. In case it is breached with the price fixation below it, there is a likelihood of the price move towards the Triangle's support. This will open the door to the price exit out of the Triangle downwards.

Meanwhile, it is premature to make such long-term conclusions. Let's wait and see how the BTC price will develop in relation to the Triangle pattern. I suggest we should check whether it will be retested and whether the bulls will make another attempt to take revenge.






Ekaterina Kiseleva
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Cryptocurrencies extend gains despite volatility in stock markets

Global stock markets are rather mixed today. Asian stocks failed to hold onto their positions following several days of gains and shed by 2%. This is mainly due to investor concerns over the coronavirus, which continues to have a severe impact on the quotes. The European Union, the United States, and China have already launched a mass vaccination campaign, while most countries in Asia still cannot receive vaccines. The market is expected to rally after the first official news of the coronavirus drug comes out.

In the United States, the situation is more challenging. Market participants are not afraid of the worsening Covid-19 situation, but the market is still trading with very slight gains. Moreover, a 0.1% increase in US indices was triggered by the release of Amazon and Alphabet's financial reports. Another positive news for the American market was a rebound in US services sector activity, which accelerated to 58.7% from 57.7%.

The situation in the European stock markets is rather uncertain as well. Stocks continue to fluctuate. Despite the decline in key indices and coefficients, economic statistics remain above the expected level.

Against the backdrop of rather weak stock market dynamics, cryptocurrencies are extending gains. The main reason for their active growth is still the announcement of Visa Inc about the creation of software for digital transactions of American banks' clients. Bitcoin continues its massive rally, backed up by the news about the American investment fund that is planning to invest in the cryptocurrency market.



Apart from that, Elon Musk provided a boost to the cryptocurrency with one of his signature meme-tweets. Dogecoin skyrocketed to an all-time high after he posted a tweet. As for ether, the situation is uncertain. Ether is gaining in value, but it is likely to lose ground after the launch of futures. However, this digital asset will begin to decline only if the network activity of Ethereum miners falls rapidly. However, Grayscale in their report has already proposed a way to improve the Ethereum protocols, which will help keep the dynamics within the normal range.

Despite mixed dynamics in the stock markets, the cryptocurrency continues to extend gains, even affecting the balance of some exchanges. Taking into account all the innovations, announcements, and the beginning of mass vaccination campaigns, the markets will see an active and stable rally in the near future. This also applies to the cryptocurrency market. It is becoming clear that even fluctuations in global markets do not affect some cryptocurrencies. This means that bitcoin may soon hit $40,000, and XRP - $0.4. Ether may approach the $1,700 mark, but only if ether futures are launched correctly.




Artem Petrenko
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Trading Signal for BTC for February 04 - 05, 2021

The BTC has reached the 8/8 murray area key level as this is a resistance zone, the bullish force continues to prevail, therefore the next target will be the +1/8 murray level around $ 40,625.

The BTC has a primary and a secondary bullish trend, both trends are giving it bullish strength, because it is now located at the resistance of $ 37,500, we expect a rebound in the area of the 200 EMA for a new bullish wave.

If the BITCOIN breaks the primary trend, we expect it to rebound in the area of the 200 EMA and the 21 SMA both are located at 34.629 this zone will be key to maintain an uptrend.

Our recommendation is to buy above the 200 EMA, with targets at $37,500 and $40,625.


Support And Resistance Levels For February 04 - 05, 2021

Resistance (1) $38,618
Resistance (2) $39,865
Resistance (3) $42,887

Support (1) $35,980
Support (2) $34,733
Support (3) $33,472






Dimitrios Zappas
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Litecoin likely to rebound

Yesterday, Litecoin did not bounce off from the strong support level of 146.04 after its breakdown. At the same time, the growth in the area of 146.04 - 171.25 was stopped by the intermediate level of 151.83 (dotted line).

Today, following bitcoin, altcoins corrected downwards. At the time of writing this article, LTC/USD reached the support level of 146.04. An attempt at a false breakout of the horizontal shadow on the 4H chart create prerequisites for further recovery of the price.

Thus, there is a possibility of an upward rebound. Therefore, it can be a signal for long deals. A risky scenario for entering the market is to buy from the current values with a stop for the shadow of the previous price. The nearest target for growth will be yesterday's highs near the local resistance level of 151.83.

Cautious traders should wait for a more distinct rebound of LTC/USD as it will confirm that the pair will consolidate near the support level of 146.04. However, there is a risk of losing the right moment as well as part of the profit, getting a less favorable ratio of stop and profit in the trade. What to choose? I think that we risk it in any case. If we enter the market now, we will place a small stop. In the extreme case, when the horizontal level of 146.04 is broken and the pair reverses upwards, it will be possible to re-open long deals.

An alternative scenario would be a breakdown of the support level of 146.04. If LTC/USD consolidates below this level, it will decline to the nearest target at the horizontal level of 135.89.





Ekaterina Kiseleva
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Litecoin Escaped From Continuation Pattern!

Litecoin (LTC/USD) is trading lower at 148.33 level versus 158.99 today's high. Still, this could be only a temporary drop before the rate jumps way higher. Technically, it has turned to the downside to test and retest some former resistance levels.

Technically, the price was into a short-term correction which has ended after the price's failure to approach and reach the 111.04 lower low. It has moved sideways on the H4 chart developing a triangle pattern. Now the rate has escaped from this continuation pattern suggesting that the major uptrend should resume.


LTC/USD TEMPORARY DECLINE?



So, LTC/USD increased as much as 158.99 and now it has slipped lower to retest the R1 (145.55) and the median line (ML). The price has registered an aggressive breakout through these levels, so the current retreat could be natural.

Stabilizing above the median line (ML) and beyond the 23.6% Fibonacci level indicates a potential upside movement towards the 186.00 historical high. Actually, further growth will be activated and validated by a new higher high, jump above 158.99 today's high, and if it closes above the R2 (161.40).

From the technical point of view, LTC/USD could resume its current bearish momentum if it stabilizes under the median line (ML) and if it closes below the R1 (145.55).


LTC/USD TRADING TIPS!

Buying will be possible if LTC/USD jumps and closes above 158.99 today's high. Closing above the R2 (161.40) suggests an increase towards the upper median line (UML), around the R4 (188.88).





Ralph Shedler
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Elon Musk back on Twitter to support Dogecoin

Against this backdrop, the cryptocurrency has gained 50% today amid a new post from Tesla's chief. The price of Dogecoin jumped to 0.05798 US dollars per token after Musk first tweeted "Doge", and then wrote, "Dogecoin is the people's crypto."

Notably, the same happened to bitcoin last week. It rallied right after Elon Musk tagged it in his Twitter. Musk said he is a big supporter of bitcoin. A day earlier, his messages triggered a rise in Dogecoin. Commenting on this situation, the billionaire said it was just a joke, just like the Dogecoin cryptocurrency itself. Funny enough, even such jokes can influence the crypto market. What if Dogecoin becomes the world's next cryptocurrency, Musk said.

By the way, he has since removed the tag #bitcoin.





Ekaterina Kiseleva
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Elon Musk raised the cost of Dogecoin by 1.5 times with just a post on a social media site

The interaction of people in social networks has created a new successful concept of building a business – a personal brand. Communication with the services takes place not only through advertising, but also through conditional communication with the creator of the brand, its main beneficiary. Most of all, the genius, billionaire, playboy, philanthropist, and Iron Man of our time – Elon Musk – succeeded in this.

The owner of Tesla and SpaceX has repeatedly shown the greatness of his power, raising the shares of different companies in one social media post. The most recent example is the "pump" of GameStop shares, which began to rise in price with double force after Elon Musk's tweet. The billionaire did not stop and today, February 4, posted on Twitter a picture of the Falcon 9 rocket taking off and added the caption "Doge." Just 50 minutes later, the value of Dogecoin soared by 47%.

Thanks to Musk's Twitter account, the altcoin set a local high, stopping at $0.059. We see another juggling of the financial markets performed by the owner of Tesla and SpaceX. This was already observed a week ago, when Elon posted on Twitter about the rising price of bitcoin. As a result, the position of the first cryptocurrency has strengthened and increased in price by 15%.



The posts of media and influential people on Twitter, the well-coordinated work of Reddit traders show how much influence social networks continue to receive. Such actions already cause loud resonances in the financial markets and may soon become the strongest tools for influencing the value of certain assets and become opponents of large manipulative investors. Given the digital nature of cryptocurrencies as an instrument of the financial market and its dependence on such shares may have a defining character.

We should not forget the news that the Visa payment system is preparing software for the interaction of bank customers and cryptocurrencies. This can increase the capabilities of the community and its individual personalities, and can influence the processes of the cryptocurrency market. Most likely, such changes are inevitable, and they can turn out to be a manipulative tool for some, and a completely unpleasant surprise for other participants in the cryptocurrency market.




Artem Petrenko
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Forecast for Litecoin on February 4, 2021 – BUY SELL




1. Analysis of bitcoin futures volumes from the Chicago Futures Exchange (CME).

Bitcoin is the flagship of the cryptocurrency market, so we will first analyze its movement. The analysis uses data on horizontal volumes from the Chicago Futures Exchange on daily charts. The analysis is based on the "Footprint Profile" theory, in which the movement of the maximum volume level for the day can indicate the likely direction of the trend. The maximum volume level is the level at which the maximum number of transactions was made, that is, the level of a large player. Accordingly, the displacement of the maximum amount of levels up indicates an upward trend. Moving the maximum volume level down indicates a downtrend. The chaotic movement of the maximum volume levels indicates a flat in the market.

02.02.21 – Maximum horizontal volume level (POC - Point Of Control) - 34580
03.02.21 – Maximum horizontal volume level (POC - Point Of Control) - 36990

POC moved up, the price reaction after the infusion of this volume is upward. There is a possibility of continuing the upward movement.


2. Analysis of the long-term trend.

The trend is a friend of a trader. Many traders know this saying, but do not know how to use it. The answer is simple: trade only in the direction of the trend. This way your trades will have more profit potential with less risk. According to the classical Dow theory, there are three main trends:

-long-term;
-medium-term;
-short-term.

These trends need to be analyzed before opening any transaction. This is what we will do in this analysis.

The long-term trend in this analysis is the daily trend. Trades will be made on a daily timeframe and held for several days. The daily trend is analyzed using the EMA (48), an exponential moving average with a period of 48. If the daily candle closed above the EMA(48), it means that we are facing an upward trend and should buy. If the daily candle closed below the EMA(48), it means that the trend is down and you should sell.



The chart shows an upward trend, the price is higher than the EMA (48), ergo in this situation, you should only consider purchases.


3. Analysis of the medium-term trend.

In this analysis, the medium-term trend will be the trend on the 4-hour chart (H4). The EMA (48), an exponential moving average with a period of 48, will also be used for the analysis. If the H4 candle closed above the EMA (48), then the trend is upward and you should buy. If the H4 candle closed below the EMA (48), it means that the trend is downward and should be sold.



The price is holding above the EMA (48), but it seems that a correction is beginning. The medium-term trend is still up and coincides with the long-term trend, so you should buy.


4. Analysis of the short-term trend.

The short-term trend, which can show well the entry point to the market, will be considered a trend on the H1 timeframe. The EMA (48), an exponential moving average with a period of 48, will help us. If the H1 candle closed above the EMA (48), then the trend is upward and you should buy. If the H1 candle closed below the EMA (48), then the trend is downward and you should sell.



The first H1 candle closed below the EMA (48). The short-term upward trend is over. Long-term, medium-term, and short-term trends do not coincide, there are signs of corridor movement in the market, you can both buy and sell.


5. Japanese candle analysis.

The classic Japanese candlestick analysis is used for the daily timeframe. In this analysis, we will also analyze the daily candle.



Closing the daily candle upwards, the candle is white. The high is above the high of the previous candle, which indicates an upward movement. The candlestick shape is trendy, large body and small shadows. Upward movement is likely, so you should buy.


6. Conclusions.

Volume analysis: POC moved up, price reaction is up - BUY.

Long-term trend: up - BUY.

Medium-term trend: up - BUY.

Short-term trend: up - SELL.

Japanese Candlestick Analysis - BUY.

General conclusion: 04.02.21 – there is a corridor in the market, you can both buy and sell.


7. Statistics.

To analyze the effectiveness of this approach, statistics on completed transactions will be kept. We continue to be in this transaction:

03.02.21 Litecoin BUY: 150.70; SL: 129.63; Risk per trade: 1% of the deposit. With a deposit of $ 10,000, lot 0.05

The stop loss is located behind the daily extreme. We do not set a take profit, as we will accompany the transaction by moving the stop loss beyond the extremes of the new days. Since trading is conducted on daily charts, this recommendation is relevant throughout the day.




Maxim Petrov
Analytical expert
InstaForex Group © 2007-2021