Cryptocurrency Analysis

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Litecoin Drop May End Soon!

Litecoin is trading in the green at the time of writing at the 361.32 level. The rate registered an aggressive sell-off as Bitcoin decreased as well. Still, the price is trading above strong support levels, so the bias remains bullish.

The current decline could be only a temporary one if BTC/USD starts increasing again. The outlook is bullish despite the most recent drop. Any reversal pattern around the support levels could bring a new long opportunity.


LTC/USD STILL IN THE BUYERS TERRITORY!


LTC/USD dropped after failing to stabilize above the ascending pitchfork's upper median line (uml) or to approach and reach the R1 (429.13). The sell-off was stopped by the weekly pivot (348.84) and by the median line (ml).

Its failure to reach the 335.35 static support is signaling strong buyers in the short term. Also, the rejection from the confluence area between the median line and the pivot point could send the rate higher.


OUTLOOK!
Litecoin could increase again and resume its upward journey only if it stays above the median line (ml). Closing again above 364.55 could indicate further growth in the short term.

Dropping and stabilizing below the median line and under the weekly pivot (348.84) could indicate a further decline towards the lower median line (lml) and deeper to S1 (308.12).




Ralph Shedler
Analytical expert
InstaForex Group © 2007-2021

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Technical Analysis of ETH/USD for May 11, 2021

Crypto Industry News:
The Central Bank of the Russian Federation (CBR) launched the sandbox in 2018 as the development of financial technology and decentralized digital assets presented new challenges to regulators. Since the inception of the initiative, more than 70 entities, including financial institutions and fintech companies, have asked the regulator to test their new products, services, technologies and business models.

The recently released 2020 CBR Annual Report reveals that the bank allocated three crypto platforms to the sandbox last year. The bank has reviewed the operation of the cryptocurrency mining pool, crypto payment system and digital asset investment platform. However, no details were given on the current test results, but for the positive ones, the Bank of Russia is expected to present a roadmap for their integration.

In July, the Russian parliament passed a law providing for the introduction of special legal regimes for testing digital innovations. The central bank uses its regulatory "safe space" to study the potential effects of such projects. CBR can also outline steps that need to be taken to create the conditions for their introduction to the market.

The Bank of Russia has opposed the legalization of cryptocurrencies in the past, but has offered to allow cryptocurrency mining as long as miners sell their coins outside of Russia. With the entry into force of the Digital Financial Assets Act, digital coins are now recognized and regulated.

However, Russians cannot use cryptocurrencies for payments, government officials cannot own cryptocurrencies, and investments are limited to ordinary citizens. Earlier this year, an annual cap of 600,000 rubles (approximately $ 8,000) was introduced for investments in cryptocurrencies by "unqualified" market participants.

The central bank is currently working on the digital ruble project and is expected to present the first prototype of the CBDC platform by the end of this year. If all goes to plan, the testing phase should start in 2022. In the summer of last year, the CBR presented an updated concept of the digital ruble, after consultations with Russian financial institutions. This is to create a digital currency that would be more convenient for the banking sector.


Technical Market Outlook:
The ETH/USD pair has made a new all time high at the level of $4,204, but the Bearish Engulfing candlestick pattern was made at the top of the rally. Nevertheless, the next target for bulls is seen at the level of $4,500 as the up trend continues.The zone between the levels of $4,000 - $3, 980 will now act as a short-term demand zone. The key short-term support is seen at the level of $3,596. The momentum is strong and positive, so it supports the bullish outlook for ETH.

Weekly Pivot Points:
WR3 - $4,545
WR2 - $4,714
WR1 - $4,394

Weekly Pivot - $3,656
WS1 - $3,369
WS2 - $2,577
WS3 - $2,290


Trading Recommendations:
The longer term up trend on the Ethereum continues despite the local counter-trend corrections. The next long term target for ETH/USD is seen at the level of $5,000. The key long term technical support is seen at the level of $3,881, so only a weekly candle close below this level will invalidate the bullish scenario.






Sebastian Seliga
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Technical Analysis of BTC/USD for May 11, 2021

Crypto Industry News:
As one of the world's leading privacy advocates, Edward Snowden believes that Bitcoin is not private enough. Moreover, the long-awaited Taproot update could, in his opinion, make things worse.

Snowden's comments sparked outrage from other activists such as Alex Gladstein. The director of strategy at the Human Rights Foundation believes Snowden incorrectly provided an update known as the Taproot. Others have argued that he does not see the real importance of mainstream adoption of the project.

"Cryptocurrency - and by that name I am talking about Bitcoin - really fails comprehensively, terribly when it comes to privacy," said Snowden Marty Belcher of the Electronic Frontier Foundation at the Ethereal Summit on Thursday. The fire was fueled by the confession that Taproot was not as good a solution in this regard as the lion's share of the community expects.

Taproot, which was first proposed in early 2018, is in the process of being implemented as part of the Bitcoin protocol itself. When it goes online, it aims to improve privacy as well as scalability and security.


Technical Market Outlook:
The BTC/USD pair had been rejected from key short-term supply zone located between the levels of $60,000 - $58,322 and fell out of the short-term ascending channel zone.The bearish Engulfing candlestick pattern was made at the top of the rally. The local low was made at the level of $53,789 and the bearish pressure is increasing. The momentum is below the neutral line already, so the next target for bears is seen at the level of $52,291, $52620 and $51,239.

Weekly Pivot Points:
WR3 - $67,229
WR2 - $63,211
WR1 - $60,975

Weekly Pivot - $56,852
WS1 - $54,336
WS2 - $50,318
WS3 - $48,012


Trading Recommendations:
Event despite the recent correction from $64,789 to $47,060 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. Any correction or local pull-back should be used to open the buy orders. This scenario is valid as long as the level of $50,000 is clearly broken on the daily time frame chart (daily candle close below $50k).






Sebastian Seliga
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Binance cryptocurrency exchange has suspended withdrawal of funds



The 61.8% Fibonacci level for bitcoin is somehow enchanted. The price has rebounded from it at least 4 times in the last 10 days, after which it overcame it, and then began a new round of corrective movement. The correction scenario is still the main one for the first cryptocurrency in the world, and there are several reasons for this. The main one is the decline in demand for bitcoin and the flow of capital from bitcoin to altcoins. The influx of new investments is now not enough for BTC to continue growing. Also, the upward trend is clearly drying up, and the cryptocurrency cannot rise constantly. Therefore, in general, we continue to believe that bitcoin should collapse to $47,000 per coin in the near future. Of course, it will be extremely difficult to continue falling even lower, as institutional investors are unlikely to allow this to happen. When bitcoin falls, and most investors are retail, small or "hamsters", everyone immediately begins to dump their coins, which leads to a collapse of 80-90% of the value. But now, a large number of coins are concentrated in the hands of institutional investors, who are unlikely to discount the asset at the slightest price drop. However, "digital gold" may still drop to $47-43 thousand.

Meanwhile, representatives of one of the largest and most well-known cryptocurrency exchanges Binance, which even has its own cryptocurrency Binance Coin, announced the suspension of the withdrawal of any assets on Monday. "Rest assured our team is working on it. We apologize for any inconvenience caused and thank you for your patience," the official statement said. The reasons for this suspension were not given, and this gave rise to a small panic in the cryptocurrency market. How many times has a financial institution failed? Bitcoin fell by about 2.5 thousand dollars on Monday, and this news can become the basis for a further decline in the bitcoin quotes. The question now is how quickly Binance would like to explain to the markets what is going on, and how quickly it will fix the problem. So far, Bitcoin has found support near the Senkou Span B line, which coincides with the 38.2% Fibonacci level – $53,800. But if the situation with the exchange is not clarified today, bitcoin may continue to fall in price.

The Swiss holding company UBS Group announced its readiness to provide large clients with the opportunity and appropriate services for trading and storing cryptocurrencies. Thus, UBS Group has joined the list of the largest banks in the world that have integrated or will do so in the near future in their activities of cryptocurrencies and will open access to their clients to work with them. The world continues to accept bitcoin and expand the opportunities associated with it for every person. However, will this help Bitcoin continue to grow?



In technical terms, bitcoin is fixed below the 61.8% Fibonacci level, so now the correction scenario looks promising again. We are still waiting for the quotes to fall to the previous local low of about $47,000 per coin. At the same time, a rebound from the Senkou Span B line or a new consolidation above the 61.8% Fibonacci level will again allow us to expect the growth of the cryptocurrency.





Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

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Trading plan for Bitcoin for May 11, 2021



Technical outlook:
Bitcoin tested the resistance level around $59,600 again yesterday before reversing sharply lower. According to Gartley patterns, it might be carving $65,000 high earlier. It is expected to terminate around the $41,000-43,000 zone. Please also note that Fibonacci 0.382 retracement of the entire rally between $38,50 and $65,000 is seen towards the $41,500 mark hence raising probabilities for a bounce.

Bitcoin wave structure is constructive for bears as the corrective drop enters its third phase since $59,600 high. The crypto is seen to be trading around the $54,800 level at this point in time. It is expected to continue drifting lower from here. Immediate price support is seen around $52924, while resistance is at $59,600, followed by $61,000 and higher levels respectively.

A break below $52,924 will accelerate further lower towards $47,000 and further. Please note that the above drop remains corrective and once completed, Bitcoin is likely to resume its uptrend above the $65,000 mark. Traders might position themselves accordingly.


Trading plan:
Remain short, stop @ 65000, target @ 41000-43000

Good luck!




Oscar Ton
Analytical expert
InstaForex Group © 2007-2021

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Ethereum catches up with bitcoin in capitalization



The decline in popularity and demand for bitcoin can be seen not only in the value of the cryptocurrency. If you open the news feeds, presently, 40% of the total number of messages is devoted to Ethereum. Unlike bitcoin, ethereum continues to grow in price, attracting the attention of investors and traders. Ether is also currently in the first place in popularity, since it is in it that funds are now being invested. The bitcoin dominance index, meanwhile, continues to decline and is already only 42.4%. While the ether dominance index is already 18.3%. The name "ether" is already associated with very famous personalities who openly declare purchases of this cryptocurrency. For example, not so long ago, Miami Mayor Francis Suarez, announced that in March of this year he bought both bitcoin and ether. He made this decision after the US Senate approved a new stimulus package worth $1.9 trillion. According to him, Americans do not want to keep their savings in the US dollar, so they buy cryptocurrencies. Suarez also added that Bitcoin has reached a level of community acceptance too high to be banned at the state level. Recall that the Mayor of Miami is a fan of cryptocurrencies and has previously proposed investing about 1% of the city's reserves in digital gold. Earlier, Francis Suarez announced the possibility of paying salaries to civil servants in bitcoins. The official also announced his intention to create a bitcoin mining center in Miami, since, in his opinion, about 90% of miners mine coins using "dirty energy" outside the United States.

At the same time, many experts are targeting the $10,000 mark on ethereum. It turns out very nicely. Most forecasts for bitcoin say $100,000 per coin, and for ethereum - $10,000. Experts expect that it will be on the air in the near future that large investors and institutions will reach out, since this cryptocurrency is also traded on the Chicago Mercantile Exchange, like bitcoin. Also, experts believe that bitcoin has found its fair value in the price range of $50,000 - $60,000, and investors are not ready to pay more at this time. Thus, it is elementary that the attention of investors switches to alternative coins, which, unlike bitcoin, continue to grow. It is also reported that the revenues of Ethereum miners in April increased by 19% and amounted to $1.65 billion.



Technically, everything looks even more convincing. Ethereum has been growing for 14 days in a row, and only during this time it has doubled in price. 2 times in 14 days. Thus, now there really is no doubt that the popularity of the second cryptocurrency is growing at a tremendous pace and may approach bitcoin within 2021. The price is well above the rising channel, which indicates a strong bullish market sentiment.





Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

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Elliott wave analysis on Dogecoin suggests a new low ahead below $0.41


Dogecoin has moved in an impulsive pattern from the beginning of its up trend to recent all time highs. Now it is time for a correction and so far we have seen most probably only the first part of the correction.



Dogecoin has so far retraced up to the 50% Fibonacci retracement and this could very well be wave a of a three wave pull back correction. Wave b most probably is finished but until we break below wave a low, we can not say with certainty that wave b is over. A new higher high above $0.59 is not out of the question yet. Wave c should complete the entire correction with a new low below wave a low and most probably close to the 61.8% Fibonacci retracement. So if you are a fan of Dogecoin, I would still keep away and wait for a deeper correction before buying.





Alexandros Yfantis
Analytical expert
InstaForex Group © 2007-2021

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XRP/USD still below key resistance, vulnerable to a move towards $1.30

XRP/USD is still trading below $1.55-$1.65 resistance. Bulls are still unable to break above the resistance are in order to continue higher towards $1.80-$2. As we mentioned in our previous analysis on XRP/USD, as long as price is below $1.60, it is vulnerable to a deeper pull back.



Red rectangle - resistance area

Green line - trend line support

XRP/USD has also broken the green support trend line. Another sign of weakness. However price did not make a lower low than $1.31. Resistance at $1.63-$1.66 if broken will push price towards $1.75-$1.85. On the other hand if price continues to be weak, we should expect it to move lower towards $1.30 maybe break it. Next target would be $1.18. Concluding, as long as price is below the red rectangle area, price is vulnerable to a move lower. If bulls manage to recapture $1.63-$1.70, then I expect $1.97 to be broken with $2.10-$2.20 first target area.





Alexandros Yfantis
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Elon Musk and the Bank of England warn to take caution in investing in cryptocurrencies



Bitcoin continued its upward movement this weekend, but at the same time, it clearly lacks new fundamental reasons to continue this very rise. Simply put, despite breaking the important 61.8% Fibonacci level on the daily time frame, bitcoin's upward trend seems unlikely to continue. One gets the impression that the bulls are pulling bitcoin upward with their last bit of strength, but sooner or later they will miss it. The chart below clearly shows that the new short-term upward trend for bitcoin is drying up in the same way as the long-term trend (on the daily TF) was drying up a couple of months ago. Thus, a new round of downward movement may begin soon, despite all the forecasts of $100,000 in 2021.

Meanwhile, Tesla and Space X CEO Elon Musk urged everyone to invest in cryptocurrencies with caution. "Cryptocurrencies are promising, but please invest with caution," he tweeted. Recall that earlier, Musk repeatedly commented on various cryptocurrencies, which constantly provoked an increase in their value. At the same time, Musk has repeatedly called for caution in investing in digital assets. The Bank of England and its governor Andrew Bailey also warn about the danger. According to Bailey, cryptocurrencies have no intrinsic value, so investing and trading them pose a serious risk of losing all funds. He also added that such excitement in the cryptocurrency market is associated only with the "external value" of these assets.

Bailey recommends investing in cryptocurrencies only if you are willing to lose all your money. But while central banks warn, commercial banks continue to incorporate bitcoin into their operations. For example, according to the latest information, the financial giant Citigroup is going to launch the ability to trade cryptocurrencies and provide the ability to store them. According to the head of the bank's foreign exchange operations department, Itai Takman, since August 2020, their clients are actively interested in bitcoin, so the bank decided to provide them with the opportunity to trade cryptocurrencies, as well as provide new services and useful tools for the cryptocurrency sector.



Technically, bitcoin continues to be in an upward trend on the 4-hour time frame, but a slowdown in the upward movement is visible to the naked eye. The trend line clearly shows that at the moment the upward trend persists, however, if the price fixes below it, it will mean a new round of downward correction. We still believe that the corrective scenario for bitcoin is more logical at this time. However, we remind you that any fundamental theory must be confirmed by specific technical signals. Thus, to sell bitcoin, you need to wait until the trendline is crossed.




Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

BTC analysis for May 10,.2021 - Rising wedge in creation and potential drop towards $53.000

Technical analysis:



BTC has been trading sideways at the price of $58.000. Potential exhaustion on the upside and chance for the downside ration.


Trading recommendation:
Watch for potential selling opportunities if you see the breakout of the rising wedge pattern.

Downside targets are set at the price of $55.350 and $53.000.

Additionally, there is the bearish divergence on the Stochastic oscillator, which is good indication for the downside movement.Resistance set at $59.000





Petar Jacimovic
Analytical expert
InstaForex Group © 2007-2021