Cryptocurrency Analysis

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ETH falls into correction, ADA sets new all-time record: altcoin market forecast

The weekend turned out to be quite controversial for the altcoin market. On Saturday, the indicators of the main cryptocurrencies were actively growing, but the sudden collapse of bitcoin quotes did not leave the coins a chance. As a result, on May 17, the cryptocurrency market shrank by 8%, and the total capitalization fell to $2.1 trillion.

Ethereum confidently held its position near the all-time high of around $4,000, the main altcoin had all the prerequisites for continuing growth and setting a new record. If you look at the charts, you can see that the fall in ETH/USD quotes began on May 16, when bitcoin indicators began a downward movement. Musk's negative statements finished off BTC, which began to affect the performance of all cryptocurrencies. As a result, the impending correction of Ethereum was aggravated by a sharp collapse of the entire market. As of 13:00 UTC, the ETH/USD pair is trading at $3,520. The asset lost 7% in price, and the weekly dynamics of changes in quotes became negative (-11%). At the same time, ether is the only coin that has sufficient prerequisites for the resumption of growth. It is likely that the situation of a week ago will be repeated when ETH recovered earlier than others after the collapse of BTC and dragged the entire market with it.



A completely different dynamic is shown by the Ripple token, which managed to overcome the difficult psychological threshold of $1.4-$1.45. The cryptocurrency shows an excellent result and almost completely recouped the fall of yesterday. Judging by the charts, the token made a sharp jump on Saturday, which supported the market, and the asset continued to grow in smaller jumps. However, the collapse of bitcoin pushed the cryptocurrency to the level of $1,359, from where XRP resumed growth. As of 13:00 UTC, the crypto asset is quoted at $1.54 and continues to grow in price. The dynamics of changes in the value of the cryptocurrency over the past few hours have become extremely positive (+3.5%). The main reason for such rapid growth in altcoin quotes was another victory for Ripple in the courtroom. The company has gained access to documents that can prove that the regulator does not consider cryptocurrencies to be securities. This news not only contributes to the growth of the token quotes but also can inspire optimism in all market participants.



Litecoin indicators, like ETH, collapsed after the decline of bitcoin and the saturation of the crypto market with negative news. As of 13:00 UTC, LTC/USD quotes are quoted at $290, and the cryptocurrency itself has lost 8% in price. The dynamics of price changes for the week is -25.5%, which indicates the complete helplessness of the asset without the positive influence of external factors. The situation is different for altcoin ADA, which set a new all-time record at around $2.4. This allowed the cryptocurrency to climb to the 4th place in terms of capitalization with a result of $69.7 billion. However, the asset failed to overcome the negative of the market and dropped in price by 8% over the course of the day. As of 15:00 UTC, the coin is quoted at $2.18. The cryptocurrency has its own reason for negativity, because billionaire Mark Cuban condemned the coin, doubting the possibility of its practical application.





Despite the prevailing amount of negative news, the cryptocurrency market will begin to actively recover its positions in the next few days. The main driving force will be the XRP token, which gains investor confidence and allows the market to overcome the collapse caused by bitcoin. Ether will also begin to recover its positions, which will help weaker altcoins resume growth. However, it should be noted that such a scenario is possible with a more or less positive news background.




Artem Petrenko
Analytical expert
InstaForex Group © 2007-2021

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Square announces $20M loss on Bitcoin investments



While bitcoin continues its decline for more than a month, more and more players are changing their position from plus to minus. For example, Square, which previously invested $220 million in the purchase of "digital gold", said that it no longer plans to buy bitcoin. In its quarterly report, the company said that it suffered a loss of $20 million from the drop in the price of bitcoin to $45,000. "We have no plans for further investment in bitcoin," said Amrita Ahuja, the company's chief financial officer. At the same time, the CEO of the analytical company CryptoQuant, Ki Young Ju, hinted as gently as possible that bitcoin may continue its decline in the near future. According to him, large investors are transferring their coins to cryptocurrency exchanges, "so there may be increased volatility in the near future." In reality, this means that the "whales" come to the exchanges with one goal - to sell their coins. Consequently, the supply of bitcoin on the stock exchanges increases, but the demand is far from a fact. "If you are a long-term investor in bitcoin, then you have no reason to worry. Your portfolio is the same as that of US institutional investors," said Ki Young Ju, and his claim is highly controversial.

Also, bitcoin could be pressured by news from unofficial sources that the activities of the Binance crypto exchange, which is one of the largest and most famous in the world, have been investigated by the US Department of Justice and the US Internal Revenue Service for violations related to money laundering and tax legislation. It is reported that at this time, no charges have been brought against the exchange. A representative of the exchange itself said that they take the legislation very seriously and always cooperate with law enforcement agencies. According to the exchange's director, Changpeng Zhao, they are simply cooperating with law enforcement agencies regarding "bad players."

All this news is called "negative fundamental background". And the more such news comes in, the more difficult it is to count on the resumption of the bullish trend. It is possible that an avalanche-like fall has begun, which will take bitcoin very, very far down. And with it the entire cryptocurrency market.




Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

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BITCOIN: Technical analysis of the current situation

BITCOIN


The bearish traders, who outlined the preconditions for the decline in April, are busy with the implementation of the downward movement in May. Last week was productive for the bears. They managed to cope with the attraction of the daytime cloud and, having gone beyond it, worked out the breakout target (45275 - 43109). Now bitcoin is in a fairly wide support zone formed by benchmarks from different time intervals (46238 - 45275 - 43109 - 41432 - 40514). The attraction and influence of such strong levels, combining their efforts in the support zones encountered, can again delay the development of the situation for a long time. For the appearance of further plans, the bulls need to implement a rebound from the encountered support and attraction zone. The main reference point in this case will be the area of 55000, overcoming this milestone will allow making new plans. Intermediate resistances on this path can currently be noted at 48858 – 50895 – 53515. In turn, the breakdown of the support zones (46238-40514) will lead to testing of important monthly boundaries (Ichimoku golden cross 37297 – 34354), and also raise the question of eliminating the weekly Ichimoku golden cross, its final boundary is now located at 34790.



The advantage of the lower halves belongs to the bears. Support for classic Pivot levels can be noted at 42137 – 40124 – 36288. There is a downward trend, but at the moment bitcoin is in the correction zone. The main benchmarks for the development of the correction are located today at 45973 (the central Pivot level of the day) and 49289 (the weekly long-term trend). Fixing above can change the current balance of power in the lower halves and confirm the formation of rebound from the supports encountered in the higher halves.


The technical analysis of the situation uses:

higher time frames - Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels

H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)





Evangelos Poulakis
Analytical expert
InstaForex Group © 2007-2021

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XRP shows more signs of strength.

Despite the negative sentiment among most cryptocurrencies at the start of the week, XPR is showing signs of strength as price respects support and moves higher towards recent highs. XRP/USD has been differentiated from Bitcoin that is showing major topping signs.



Red lines - resistance trend lines

Blue lines- support trend lines

Green rectangle- major horizontal support area

XRP/USD made a high yesterday just above $1.60 while today price pulled back towards $1.30. The key support at $1.20 remains intact. Price has now moved above the short-term resistance trend line once again and has potential of reaching the upper resistance trend line at $1.65. As we explained in our last post, a break above $1.61 would be a bullish sign. XRP/USD shows that it is not so much affected by the negativity in other cryptocurrencies and might start a big upward move soon, if resistance is broken. We remind that bulls do not want to see price break below $1.20 as this will lead to a deeper decline towards $1 and lower.





Alexandros Yfantis
Analytical expert
InstaForex Group © 2007-2021

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BTC analysis for May 17,.2021 - Third target reached at $43.000 but potential for further downside towards $30.000

Technical analysis:



BTC has been trading downwards as I expected. The price reached my third downside target at the price of $43.000.


Trading recommendation:
Anyway, my advice is still to watch for selling opportunities on the rallies with the downside target at $30.100.

Stochastic oscillator is in the oversold zone but there is no fresh bull cross, which is still bearish tone.

Resistance is set at $47.000





Petar Jacimovic
Analytical expert
InstaForex Group © 2007-2021

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Trading plan for Bitcoin for May 17, 2021



Technical outlook:
Bitcoin has achieved its projected target towards $43,000 levels as we have been discussing since last several weeks. Prices have bounced off from just above $42,000 levels, falling short marginally from testing $41,500 levels, which is fibonacci 0.618 retracement of the entire rally between $3,850 and $65,000 levels respectively.

Bitcoin has raised through $50,400 levels at this point in writing and might continue to print higher highs and higher lows from here. It is quite possible that the corrective drop is now complete around $42,000 and Bitcoin might resume higher towards $65,000 mark from here. Most traders might have already booked profits around $43,000 mark as suggested earlier.

Bitcoin now has immediate interim support around $41,000 levels, while resistance is seen towards $60,000 levels respectively. A break above $60,000 from here will confirm that the trend has reversed and that bulls are back in control. The crypto turns a buy on dips from here.


Trading plan:
Remain long now, add more @ 42,000-45,000 zone, stop @ 40,000, target above @ 65,000.

Good luck!





Oscar Ton
Analytical expert
InstaForex Group © 2007-2021

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Bitcoin Buyers Reacted At Support!

Bitcoin resumed its sell-off after failing to stabilize above the $50,000 psychological level. The bias is bearish, so the price of Bitcoin could resume its sell-off after ending the current rebound.

The price action has signaled that BTC/USD could drop deeper. Still, we need confirmation as the rate hovers above a critical support area. Bitcoin could come back to test and retest the immediate resistance levels before going down.


BTC/USD BOUNCED BACK!


BTC/USD plunged after stabilizing below the descending pitchfork's median line (ml). I've told you in the last week that Bitcoin could increase in the short term only if it jumps and closes above 51,569 former high.

The 43,016 - 41,986.37 area is seen as a strong support zone. The price has bounced back after reaching this area. As you can see, the downside 50% Fibonacci line represents dynamic support, the price has started to increase from below it in the past.

The breakdown below 50,305 signaled strong sellers in the short term. BTCUSD could come to test and retest this level in the short term.


BITCOIN OUTLOOK!

Dropping and stabilizing below 41,986.37 could really confirm a larger decline far below 40,000 psychological level. Only a major reversal pattern above 43,016 - 41,986 area could announce a new swing higher.

A minor sideways movement followed by a new lower low could bring a new selling opportunity.




Ralph Shedler
Analytical expert
InstaForex Group © 2007-2021

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Technical Analysis of ETH/USD for May 17, 2021

Crypto Industry News:
MicroStrategy, a Virginia-based company, has added another 271 Bitcoins to its strategic reserves, highlighting CEO Michael Saylor's growing belief in digital assets.

The purchases were made through May 13 for an average price of $ 55,387, Saylor revealed. MicroStrategy now has 91,850 BTC in its books at an average purchase price of $ 24,403.

MicroStrategy also disclosed the purchase of the US Securities and Exchange Commission via an 8-K form filed on Thursday.

While the MicroStrategy purchase appears to have coincided with the recent Bitcoin price correction, triggered by Elon Musk's sudden decision to stop accepting BTC payments for Tesla vehicles, the economic intelligence firm is not mapping the market. Saylor indicated in February that he had no plans to slow down the pace of his company's BTC purchases when he seized digital assets worth $ 1 billion.

MicroStrategy tops the list of Bitcoin's corporate vaults, accounting for 0.437% of the supply of assets in circulation and acquires Bitcoin on the assumption that digital assets are a reliable means of custody in the face of a systemic dollar weakness.

The M2 money supply in the United States has increased sharply since the 2008 financial crisis and more recently since the COVID-19 pandemic. Since February 2020, the money supply has risen by almost 30% to $ 19.896 trillion, according to the Federal Reserve Bank of St. Louis. In retrospect, the year-on-year growth of the M2 money supply never exceeded 15% by 2020.


Technical Market Outlook:
The ETH/USD pair has made another wave down to the level of $3,162. The zone located between the levels of $3,184 - $3,000 is the key short-term demand zone and any violation of this zone will lead to another wave down towards the level of $2,955 and $2,757. The immediate technical resistance is seen at the level of $3,489, $3,552 and $3,596. The market is in full control of bears and only a strong breakout above the level of $3,623 (38% Fibonacci retracement of the last wave down) would temporary change the outlook to bullish (but still corrective in nature).

Weekly Pivot Points:
WR3 - $4,859
WR2 - $4,608
WR1 - $3,835

Weekly Pivot - $3,623
WS1 - $2,857
WS2 - $2,581
WS3 - $1,823


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 $3,000, so only a weekly candle close below this level will invalidate the bullish scenario.







Sebastian Seliga
Analytical expert
InstaForex Group © 2007-2021

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Technical Analysis of BTC/USD for May 17, 2021

Crypto Industry News:
Between 2020 and 2021, Square bought over $ 200 million worth of Bitcoins. Currently, the payment company does not anticipate buying more assets, according to its chief financial officer Amrita Ahuja:

"At the moment we have no plans for further purchases. [...] There are no plans at the moment to reassess where we are from a financial standpoint.

In October 2020, Square announced the purchase of Bitcoins worth $ 50 million, which was equivalent to 4,709 BTC, given the asset prices at the time. In February, the company announced that it would collect additional Bitcoins worth $ 170 million, or roughly 3,318 coins.

May saw Bitcoin's price sideways and downwards, although Square continued to record a significant profit from its BTC holdings.

"In Square's latest quarterly results, released on May 6, the company said it lost $ 20 million on its Bitcoin investments, despite rising to $ 472 million based on market prices."

However, Square Bitcoin's involvement does not stop with asset purchases. The Cash App company allows free Bitcoin transactions, unveiled in March. The Square Cash app also supports Bitcoin trading.


Technical Market Outlook:
The BTC/USD pair has made another wave down to the level of $42,261. The zone located between the levels of $43,097 - $41,794 is the key short-term demand zone and any violation of this zone will lead to another wave down towards the level of $40,942 and $39,969. The immediate technical resistance is seen at the level of $45,710, $46,371 and $47,077. The market is in full control of bears and only a strong breakout above the level of $47,077 would temporary change the outlook to bullish (but still corrective in nature).

Weekly Pivot Points:
WR3 - $67,286
WR2 - $62,987
WR1 - $51,788

Weekly Pivot - $47,852
WS1 - $35,984
WS2 - $32,386
WS3 - $20,567


Trading Recommendations:
Event despite the recent correction 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]

Elon Musk continues to comment on Bitcoin



While bitcoin is falling, it should also be noted that the second most popular cryptocurrency in the world - Ethereum - also continues to fall. At the moment, ether has lost more than $1,000 in value, which is approximately 25%. This is not as much as bitcoin, but it's still a fall. Thus, whether the majority of participants in the cryptocurrency market want it or not, Bitcoin drags the entire market down with it, with the exception of some tokens. Meanwhile, Elon Musk again began to comment on bitcoin and other cryptocurrencies, in particular his beloved Dogecoin, with which he is connected, as it turned out the other day, not just by interest. The developers of the Dogecoin cryptocurrency said they have been in cooperation with Elon since 2019. Thus, it can be assumed that Musk's interest in Dogecoin is not purely sporting. This time, the notorious billionaire posted on Twitter that, in theory, Dogecoin could become a more popular coin and overtake Bitcoin. "Ideally, Doge speeds up block time 10X, increases block size 10X & drops fee 100X. Then it wins hands down," Musk wrote. We cannot say that it was because of this statement that Bitcoin collapsed down again, but the trend can be traced with the naked eye. If Musk speaks positively about bitcoin, the cryptocurrency grows, if from the negative side, it falls. It seems that all participants in the cryptocurrency market are deliberately awaiting Musk's comments. Whether it is true or not, no one knows. Musk believes that Dogecoin is the future - and this cryptocurrency is growing. However, Elon Musk's opinion was immediately criticized by many members of the crypto community. The developers noted that if Dogecoin increases speed and decreases fees, as Musk says, then the entire network will become very vulnerable to spam attacks. Many other contributors also noted that commissions are spam protection. And Blockstream CEO Adam Back said that Musk does not understand how cryptocurrency works at all: "would be like someone wading into spaceX with ideas for a cuboid rocket fueled by water." Many also believe that Elon Musk wrote just another ironic troll comment. "Ideally, Tesla batteries last 10x longer, recharge 10x faster & drops costs 100x. Then it wins hands down," Uniswap founder Hayden Adams wrote back to Musk.



Technically, Bitcoin continues to move down on the 4-hour timeframe after breaking the upward trend line. The level of $47,000 has been taken, so the downward movement continues at the moment. Overcoming the level of $43,852 will further increase the likelihood of the continuation of the fall of the bitcoin quotes with the target of $38,467.





Paolo Greco
Analytical expert
InstaForex Group © 2007-2021