Cryptocurrency Analysis

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LTC/USD short-term analysis

LTC/USD has reached our $215 target and as we mentioned in our analysis we prefer to take profits of the triangle breakout. We observe in the short-term a weakness to break above $220 which was tested multiple times. This does not mean a trend change, I just believe that a pull back towards $190 is justified.



Red rectangle - resistance

Trend remains bullish and I do not want to go against the trend. However I believe it is best to take profits and stay neutral or with minimal bullish exposure in LTC/USD. Price could make a sharp pull back towards the beak out area of $190 or even lower.




Alexandros Yfantis
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Bitcoin breaks above $50,000

Following a significant plunge of 3%, the main cryptocurrency hit a new all-time high of $50,500. On Tuesday, the asset gained in value by 5%, bringing its total capitalization to $928 billion.

Notably, this followed a local decline in the entire crypto market, which caused losses for hundreds of thousands of traders around the world. After falling by $4,000, the main digital asset pared its losses, setting a new capitalization record. For now, the price of bitcoin is trading at around $48,000. However, this is the only major crypto asset that is showing positive dynamics.



Ethereum did not respond to bitcoin's rally but continued to decline in price. At the time of preparing this material, ether was trading in the area of $1,770 with no signs of recovering.



The situation with the Ripple's token is rather similar. The cryptocurrency has slipped to the $0.53 mark. However, there are already some signs of upside momentum, and XRP is likely to gain in value.



Litecoin has halted growth at the level of $210. Despite a slight intraday upward movement, the asset will hardly be able to boast of a stable and systematic increase in price.



Given the current performance of the cryptocurrency market, we can conclude that the price correction has affected all digital assets. Nevertheless, bitcoin managed to recover and resumed its uptrend amid the news on large investments from financial giant Morgan Stanley. The rest of the assets failed to resist and consolidated at the levels of the previous week.

A new bitcoin's record high may well trigger growth in other cryptocurrencies. However, digital assets barely reacted to the news about fresh investments in the first cryptocurrency. In addition, after hitting the previous all-time high, bitcoin pulled back down by 3%, which could happen again. But this time, such a pullback may have a far more severe impact on the entire market.




Artem Petrenko
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

BTC analysis for February 16,.2021 - Watch for potential downside rotation and test of $43.650

Further Development



Analyzing the current trading chart of BTC, I found that BTC is on the extended run and that is very exhausted around $50,000 level.


Key Levels

Resistance: $50,000

Support levels: $43,655 and $42,000.





Petar Jacimovic
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Morning review of cryptocurrencies for February 16, 2021

There have been no significant changes in the crypto market since yesterday. Nevertheless, BTC reached a new record high but failed to consolidate at this level yet.

Bitcoin consolidated above 48,178.13, which is the support level now. The level of 49.690.70 is seen as resistance, which is also the previous historic high. Today's attempt of the price to break through the high looks like a false breakout.

BTC/USD is moving in a narrow sideways range. Most likely, the price will break through one of the indicated levels of the range. At the same time, the price still can reach a new record high.



Bitcoin Cash touched the resistance level of 835.86, but failed to consolidate above it. Now, let's take a look at the H1 time frame. We have a sideways range in the area of 701.47 - 835.86. If the price does not break through support, the upward trend on BCH/USD may well resume. In case of a breakout at the horizontal level of 701.47, the price may go down to the 611.50 target.



Ripple is stuck in a narrow range between the support level of 0.5564 and local resistance located at 0.5957. In case the price breaks through the lower border of the range, the support level will be seen at 0.5345.



Ethereum has not broken through the sloping resistance level of 1874.20 - 1851.95. The target is gradually moving down along it. In case of a rebound, the downward terget will remain at the local support level of 1697.27. If the price breaks through the resistance of 1874.20 - 1851.95, ETH/USD will be able to reach the 161.8% Fibo Expansion level.



Litecoin is consolidating in the narrow sideways range of 210.96 - 218.92. So far, the price has not broken through its upper border. Therefore, a rebound is highly likely. If BTC hits a new historic high, LTC/USD's next resistance level will be 228.24.






Ekaterina Kiseleva
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Ethereum More Gains Spotted!

Breaking above the WL3 represents a long signal!

Ethereum is trading in the red on the H4 at the time of writing but the bullish bias remains intact. The price could drop only to retest the near-term support levels before jumping way higher.

Technically, ETH/USD has broken through significant resistance levels, that's why I'm expecting to see a further increase. The crypto should approach and reach new highs as long as Bitcoin's price continues to grow.


ETH/USD PRICE ACTION SIGNALS FURTHER GROWTH!


ETH/USD has retested the broken third warning line (WL3), the up channel's resistance, and the Pivot Point (1,747) level confirming this as strong support levels. I've told you in my previous analyses that the pair will continue to climb if it makes a valid breakout above the WL3 and if it stays above the red upside line.

The PP retest could represent a long signal. Buying again will be possible from these levels, having the fourth warning line (WL4) as a target.


ETHEREUM TRADING TIPS!

Buy from above 1,839 yesterday's high and use the R1 (1,928) and the R2 (2,056) as potential targets. Hide your Stop Loss below 1.660 former low.

R3 (2,237) should be used as a target if ETH/USD makes a valid breakout above the WL4.





Ralph Shedler
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Forecast for Litecoin for February 16, 2021

1. Analysis of LTC/USDT volume from Binance cryptocurrency exchange

The analysis is based on the horizontal volumes data on daily charts from the Binance exchange. The analysis is carried out based on the footprint-profile theory. According to the theory, the direction of the horizontal level with the highest trade volume within a day can indicate the likely direction of the trend. The highest trade volume is the level with the largest number of transactions carried out. That is, it is the level of major market players. Accordingly, if the highest trade volume level goes up, it indicates an upward trend. Otherwise, if the highest trade volume level goes down, it indicates a downward trend. Chaotic movements signal that the market is trading flat.

February 14, 2021 – the highest horizontal volume level; point of control (POC) = 214.88
February 15, 2021 – the highest horizontal volume level; point of control (POC) = 203.88

The point of control has moved down. The price level is above POC. The market is correcting sideways. Therefore, one can open both long and short positions.


2. Analysis of long-term trend

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

-long-term
-medium-term
-short-term

These are the trends you should analyze before entering the market. Now, let's take a closer look at these trends.

The long-term trend is the daily trend. In this case, deals are made in the daily time frame and are held for several days. The analysis of the daily trend is made with the help of the 48-period exponential moving average (EMA(48)). If the daily candlestick closes above EMA(48), it will indicate the upward trend. Therefore, you should enter long. If the daily candlestick closes below EMA(48), then it is the downward trend and you should enter short.



The chart indicates the upward trend. The price level is above EMA(48). This is why you should consider entering long.


3. Analysis of medium-term trend

The medium-term trend is the trend on the 4-hour chart (H4). In this case, we will also turn to EMA(48). If the candlestick closes above EMA(48) on the 4-hour chart, it will indicate the upward trend. Thus, you should enter long. Otherwise, if the candlestick closes below EMA(48) on the H4 chart, it will indicate the downward trend. Consequently, you should enter short.



The price level is above EMA(48). The medium-term upward trend coincides with the long-term one. Therefore, one should open long positions.


4. Analysis of short-term trend

A short-term trend is the trend in the H1 time frame. Moreover, it can show an entry point into the market well. We will turn to EMA(48) again. If the candlestick closes above EMA(48) on the H1 chart, it will indicate the upward trend. Thus, you should enter long. Alternatively, if the candlestick closes below EMA(48), it will indicate the downward trend. Consequently, you should enter short.



The price is above EMA(48), indicating a short-term downward trend. The long-term, the medium-term, and the short-term trend coincide. Thus, you can buy the pair.


5. Japanese candlestick analysis

A classic Japanese candlestick analysis is applied to the daily timeframe. In this particular analysis, we will also look at the daily candlestick.



Thus, we have a black downward daily candlestick. Its extreme low is below the low of the previous candlestick. It is a hammer candlestick pattern with a long lower shadow. The upward movement is highly likely.


6. Conclusion

Volume analysis: POC moved up -> BUY SELL.

Long-term upward trend –> BUY.

Medium-term upward trend –> BUY.

Short-term upward trend –> BUY.

Japanese candlestick analysis –> BUY.

General conclusion: On February 16, 2021 one can both sell and buy the pair


7. Statistics

To analyze how effective this approach is, the data on completed transactions is tracked. The forecast is made for four instruments: Bitcoin, Ethereum, Litecoin, and BCH/USD. Trading account monitoring:



February 2021: +4.95%.

One should refrain from opening new positions due to market uncertainty. A Stop Loss for new orders should be placed beyond the daily extreme points. We do not set a Take Profit order because we will continue to move the Stop Loss above the extreme points of the upcoming sessions.

Since trading is carried out on daily charts, this recommendation is relevant throughout the day.

Trade with the trend and you will generate profits!



Maxim Petrov
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

New record or deep downward correction? What to expect from crypto market in near future?

The first half of February and the whole January 2021 are setting the tone for the crypto market in the medium term. Both Ethereum and bitcoin have set fresh records week after week, thus propelling other altcoins upwards. However, on February 15, the stellar rally was interrupted by a sudden nosedive. As a result, crypto traders incurred massive losses of nearly $2 billion. Following an abrupt crash in the market, investors resumed speculations that a deep downward correction is just around the corner. This is likely to set the stage for a further downturn of prices of digital assets.

A dazzling rally of crypto assets in early February was triggered by a steady stream of positive news and arrival of large investors in the crypto market. All popular cryptocurrencies developed a confident bullish run. On the other hand, all of them exposed great dependence on bitcoin. The whole market was rattled by fresh records of the number one cryptocurrency. The only currency to remain immune to the overall rally is Litecoin. This digital asset has been on the rise irrelevant of trajectories of both Ethereum and bitcoin. Nevertheless, Litecoin has not been able to show resilience to the crash of the whole crypto market.



The downward correction has been brewing for a few recent weeks. So, the bitcoin price slumped by $4,000 within 24 hours that dealt a blow to the whole market. All popular cryptocurrencies tumbled in value, thus bringing retail investors losses of $2 billion. The catalyst for a nosedive was certainly bitcoin which conquered a new historic peak and immediately plunged 4%. This incident exposed the phenomenon that at this stage the crypto market is vulnerable to the king bitcoin.

Another crash is also looming. In the morning on February 16, bitcoin smashed through the psychological mark of $50,000 per token. Shortly after, it slipped to $49,998 and deeper to $48,800. At present, analysts say there are preconditions that the cryptocurrency with the largest market cap will not be able to extend its winning streak. Its price is likely to fall as low as $45,000 within the downward correction. In turn, this will drag down other cryptocurrencies that will dent investments and the overall market capitalization.

On the other hand, there are enough signs for a further bullish run. Over the recent 24 hours, bitcoin rebounded 4%. Its weekly gain is 55%. Such a roller coaster at this stage of the crypto market's development comes as no surprise. The reasons are the same: extreme volatility of digital assets and a looming correction of the crypto market. In any case, the market is in motion, heading for new milestone highs. Despite such gyrations, the market will hardly be trapped inside the bearish trend. *The market analysis posted here is meant to increase your awareness, but not to give




Artem Petrenko
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

CBDC halts crypto rally



The rally of Bitcoin and other cryptocurrencies stalled, after investors closed their positions in the market.

To add to that, this halt in Bitcoin has decreased the hype that sent cryptocurrency to Wall Street, due to the fact that large companies and investors have changed their attitude towards digital assets.

As cryptocurrencies become more and more popular, there is growing pressure on the world's largest central banks to advance their plans to issue digital money. Accordingly, this increases the threat to traditional money.

In fact, Bitcoin, which is the most popular cryptocurrency, has already moved from funding to large investors, companies and even cities. For example, Tesla's investment has driven BTC to an all-time high of nearly $ 50,000. Meanwhile, the Facebook-backed digital currency Diem, formerly known as Libra, is slated to launch this year.

To combat this, central banks of G7 countries outlined how a digital currency would function, but warned that progress would be slow.

CBDC is the electronic equivalent of cash.

Like banknotes or coins, they would give holders the right to make a direct claim to the central banks, overtaking commercial banks. With the support of central banks, they will be as "risk-free" as traditional money, and will allow holders to make online payments.

So far, access to central bank money is limited. But now, the situation is changing since central banks fear losing control of the global payment system in favor of cryptocurrencies, which are usually not controlled by any central authority or individuals.

Such could weaken the control of central banks over the money supply, one of the main ways of managing the economy. This threat has become more real amid the rapid proliferation of digital currencies.

Last week, financial firms BNY Mellon and Mastercard said they would support digital assets. City of Miami, on the other hand, is seeking to allow bitcoins to be used to pay workers, as well as to pay fees and taxes.

What will the CBDC look like?

CBDC can take the form of a token stored on a physical device such as a mobile phone or prepaid card, making it easy to go offline.

Alternatively, it can exist in accounts managed by an intermediary such as a bank, which will help the authorities control it and possibly pay interest in the form of interest.

While the idea for CBDC was born in part as a reaction to cryptocurrencies, there is no reason to say it should use a blockchain, or the distributed ledger that supports these tokens.

In fact, the People's Bank of China already said its digital yuan will not rely on blockchains, and it will be the first to issue CBDCs as part of its push to internationalize the yuan and reduce reliance on a dollar-dominated payment system.

According to local media reports, state-owned Chinese commercial banks are already testing a digital wallet app.

Meanwhile, the European Central Bank and the Bank of England are still on the stage of consulting. ECB President Christine Lagarde said it would take years to create a digital euro.

The Bank of Japan and the US Federal Reserve, on the other hand, put this idea on the back burner.

As for Sweden's Riksbank, it has begun testing its e-krona. The Bank of Canada has also accelerated work on its digital currency.

Smaller countries are moving forward too, with the Bahamas becoming the first country to roll out CBDCs nationwide.

But central banks also fear that massive migration to CBDC will devastate commercial banks, depriving them of a cheap and stable source of funding, such as retail deposits.

In a crisis, this would leave them vulnerable to overspending in their coffers, as clients would prefer the security of an account guaranteed by a central bank.

For this reason, most projects have a limit on how much each consumer will be allowed to keep in the CBDC. For example, remuneration rates may be lower to reduce attractiveness.




Andrey Shevchenko
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Forecast for Bitcoin for February 16, 2021

1. Analysis of BTS volume from Chicago Mercantile Exchange (CME)

The analysis is based on the horizontal volumes data on daily charts from the Chicago Mercantile Exchange. The analysis is carried out based on the footprint-profile theory. According to the theory, the direction of the level with the highest trade volume within a day can indicate the likely direction of the trend. The highest trade volume is the level with the largest number of transactions carried out. That is, it is the level of major market players. Accordingly, if the highest trade volume level goes up, it indicates an upward trend. Otherwise, if the highest trade volume level goes down, it indicates a downward trend. Chaotic movements signal that the market is trading flat.

February 12, 2021 – the highest horizontal volume level; point of control (POC) = 48,105
February 15, 2021 – the highest horizontal volume level; point of control (POC) = 49,515

The point of control has moved up. Meanwhile, the price level is below POC. The market is correcting sideways. Therefore, one can open both long and short positions.


2. Analysis of long-term trend

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

-long-term
-medium-term
-short-term

These are the trends you should analyze before entering the market. Now, let's take a closer look at these trends.

The long-term trend is the daily trend. In this case, deals are made in the daily time frame and are held for several days. The analysis of the daily trend is made with the help of the 48-period exponential moving average (EMA(48)). If the daily candlestick closes above EMA(48), it will indicate the upward trend. Therefore, you should enter long. If the daily candlestick closes below EMA(48), then it is the downward trend and you should enter short.



The chart indicates the upward trend. The price level is above EMA(48). That is why you should consider entering long.


3. Analysis of medium-term trend

The medium-term trend is the trend on the 4-hour chart (H4). In this case, we will also turn to EMA(48). If the candlestick closes above EMA(48) on the 4-hour chart, it will indicate the upward trend. Thus, you should enter long. Otherwise, if the candlestick closes below EMA(48) on the H4 chart, it will indicate the downward trend. Consequently, you should enter short.



The price is above EMA(48). The medium-term trend is the upward one. Apart from that, it coincides with the long-term trend. Therefore, one should open long positions.


4. Analysis of short-term trend

A short-term trend is the trend in the H1 time frame. Moreover, it can show an entry point into the market well. We will turn to EMA(48) again. If the candlestick closes above EMA(48) on the H1 chart, it will indicate the upward trend. Thus, you should enter long. Alternatively, if the candlestick closes below EMA(48), it will indicate the downward trend. This means you should enter short.



The price is above EMA(48). The trend reversed. Thus, we have a short-term upward trend. The long-term, the medium-term, and the short-term trend coincide. Therefore, you can both buy and sell the pair.


5. Japanese candlestick analysis

A classic Japanese candlestick analysis is applied to the daily timeframe. In this particular analysis, we will also look at the daily candlestick.



Thus, we have a black downward daily candlestick. Its extreme low is below the low of the previous candlestick. It is a hammer candlestick pattern with a long lower shadow. The price is likely to move within a corridor.


6. Conclusion

Volume analysis: POC moved up -> BUY/SELL

Long-term upward trend –> BUY.

Medium-term upward trend –> BUY

Short-term upward trend –> BUY

Japanese candlestick analysis –> SELL

General conclusion: On February 16, 2021 one can both sell and buy the pair


7. Statistics.

To analyze how effective this approach is, the data on completed transactions is tracked. The forecast is made for four instruments: Bitcoin, Ethereum, Litecoin, and BCHUSD. Trading account monitoring:



February 2021: +4.95%.

One should refrain from opening new positions due to market uncertainty.

A Stop Loss for new orders should be placed beyond the daily extreme points. We do not set a Take Profit order because we will continue to move the Stop Loss above the extreme points of the upcoming sessions.

Since trading is carried out on daily charts, this recommendation is relevant throughout the day.

Trade with the trend and you will generate profits!




Maxim Petrov
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

One step up to $50,000 per bitcoin. Bearish divergence creates the risk of significant cryptocurrency correction

After a sharp fall on Monday morning, the bitcoin exchange rate returned to the area of its historical highs and is ready to continue the upward trend observed since the beginning of this year. Bitcoin has already risen 3.6% to $49,913 in Asian trading on Tuesday.



The growth of bitcoin was facilitated by the wider spread of the cryptocurrency among investors. The latest driver of bitcoin's growth was the purchase of $1.5 billion worth of bitcoins by Tesla. However, the talk about the emergence of new players from Wall Street continues.

The speculativeness of bitcoin and its value are the determining factor that deters many institutional investors from entering the cryptocurrency market. However, it is unlikely that this approach will ever change. Therefore, investors will either have to measure themselves against this, or watch on the sidelines for the movements that occur in the market. Many experts are convinced that bitcoin should stabilize around $50,000 before it begins its new hike to the area of $100,000, which is a longer-term prospect.

The risk that we are waiting for a repeat of 2018, when after another historical high, the bitcoin exchange rate lost more than 70% of its value, is always present. Therefore, when buying a cryptocurrency at the current exchange rate, you need to be prepared for the fact that the exchange rate can return to the area of 25,000, or even 20,000, in just a few months.

Whether other companies will follow Tesla's example is a big question. Many experts doubt that the electric car maker will start a new trend, as there should be a pretty good reason to invest corporate money in such a risky asset as bitcoin. On the other hand, there are companies like MicroStrategy that invest in cryptocurrencies. In his latest statement, CEO Michael Saylor said that Tesla's entry into the world of cryptocurrencies has made bitcoin more attractive to large businesses, which in the future may encourage other companies to explore the demand for this type of asset for investment.



Morgan Stanley is considering investing in cryptocurrencies, but it has not yet reached serious statements. Rumors that Apple will also start accepting cryptocurrency payments are not unfounded. All this supports the bitcoin exchange rate at current levels. But as soon as the enthusiasm runs out, the risk of a larger downward correction will immediately increase. Therefore, interest in bitcoin from major players is necessary.

For example, from the latest such news, we can highlight BNY Mellon, which stated that it has formed a team engaged in the development of a platform for storage and administration and digital assets. Mastercard Inc. plans to allow cardholders to make transactions with certain cryptocurrencies on its network. However, old-timers of the cryptocurrency market may remember that such news was enough in 2018, when the bitcoin exchange rate was falling inexorably. Therefore, the risks are great, but the desire to catch the "outgoing train" of the cryptocurrency market is even higher.

How much do Bitcoin miners earn?

Another problem, which is not as important as it may seem, but requires a solution, is the increase in the cost of transactions, which now amounts to about $20. This is due to the increase in the cost of bitcoin miners' work to maintain the network's operability. According to the Clark Moody Bitcoin platform, bitcoin miners earn 0.97 BTC for just one transaction fee per block. This is the average value for the last 2000 blocks. However, recently, transaction fees have increased quite a lot. They now amount to about $20, which determines a large share of the total remuneration of the miner. Bitcoin miners currently earn a total of about $40 million a day. Thus, the fees alone account for 13.47% of the total revenue of bitcoin miners. This suggests that as Bitcoin mining rewards decline, fees will continue to rise, thereby providing a constant economic incentive for miners to maintain the health and security of the network. But there is also a downside to the coin. The rising transaction costs are sure to scare off smaller investors, as the average commission increases, BTC may become too expensive to use. But there are also those who believe that such a phenomenon is good news. Quantum Economics believes that high fees mean that many players accept bitcoin, as the increase in fees indicates competition among players.

Why will Bitcoin live?

Allianz stated that there are a number of arguments in favor of bitcoin. If earlier there were calls for the reasons for investing in bitcoin: "You don't trust the system - invest in Bitcoin. You are afraid of inflation, depreciation - you invest in bitcoins. Treasury bond yields are too low - add bitcoin in your investment portfolio," now the reasons are different. The main focus is on bitcoin – as a means of payment, as well as a good way to invest. Again, the report focuses on Tesla, as well as several private sector companies that are considering using bitcoin as a form of payment and investment.

Bear in mind that there is another equally interesting moment - when normal ETFs for bitcoin will finally appear. An exchange-traded fund can be an attractive tool for a private investor, but so far there are no such offers. Although there are exchange-traded products that track cryptocurrencies in Europe, US regulators have repeatedly thwarted attempts to introduce them in the US, citing concerns of possible manipulation due to insufficient liquidity. However, after the sharp rise in bitcoin that we have seen recently and the change of leadership at the Securities and Exchange Commission, the prospect of the first bitcoin ETF in the US seems to be becoming more real.



As for the technical picture of bitcoin, everything suggests that in the near future we will achieve a breakthrough of 50,000 and the growth will continue. There has been too much consolidation around the 49,000 level recently. The attempt to form a bear market, which speculators made earlier this week, resulted only in new purchases, which once again confirms the bull market. The technical flag pattern, which is clearly visible on the chart, also indicates a break in the resistance of 49,500, after which the highs at 52,000 and 55,000 for bitcoin open. It will be possible to talk about a bear market after sellers achieve a breakthrough of support for the lower border of the flag in the area of 45,500 per bitcoin. This may cause a more significant deep correction in the area of 37,800 and 33,300. The fact that the constant growth of the bitcoin exchange rate coincides with the bearish divergence that is formed on the MACD indicator also indicates a possible fall in the event of a failed attempt to break through 49,500 in the near future.




Jakub Novak
Analytical expert
InstaForex Group © 2007-2021