Cryptocurrency Analysis

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BTC analysis for May 18,.2021 - Sellers in control and potential for drop towards $30.000



Technical analysis:
BTC has been trading at the important pivot support at $42.300 and no big reaction from buyers is sign that sellers are still in control.


Trading recommendation:
Watch for potential selling opportunities on the rallies with the downside target at the price fo $30.370.

Stochastic is showing oversold condition but with no bull cross, which is another sign that sellers are in big control.





Petar Jacimovic
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Bitcoin reversal possibilities from $40k

Bitcoin has been moving lower as expected by our analysis and has already reached the upper target area of our target $43,000-$40,000. The RSI in the 4 hour chart is showing bullish divergence signs. This is just a warning and not a reversal signal.



Red lines- bullish divergence

If Bitcoin makes a new lower low and the RSI provides a new bullish divergence, then we should expect a bounce towards $47,000-$50,000 to follow. Major resistance remains key at $58,000 area. So far price is making lower lows and lower highs. In the short-term the chances of a bounce are high as long as the RSI is diverging. Nevertheless we should not forget that the trend is bearish and sell offs and crashes start from oversold conditions in the markets. Traders need to be very cautious.





Alexandros Yfantis
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Elon Musk: "Bitcoin is highly centralized"



The bitcoin exchange rate has collapsed to $43,000-$44,000 and is in no hurry to start a new round of upward movement. In this morning's article, we said that at this time, the option of continuing the correction does not look as likely as it did a week ago. The reason is that the quotes have fallen to the important support level of $43,852, and for the quotes to continue falling, the price mustn't overcome this level. Thus, everything now depends on it. The correction itself, which began in mid-April, looks quite convincing, so we can assume that the upward trend will resume soon. However, recall that the trend for bitcoin has been maintained for more than a year, and previously any upward trend was relatively short-term in the long term. A year and a half at most. Thus, from this point of view, bitcoin quotes will continue their way down. The fundamental backdrop for bitcoin remains extremely unattractive.

It all started with the power outages in the Xinjiang region in China, which led to the shutdown of a huge number of mining farms. In the last few days, Elon Musk came to the fore, who with several of his tweets and statements forced many investors to get rid of bitcoin. Unfortunately, this is the reality in 2021, when one functionary, even a famous billionaire, can bring down the cryptocurrency market with one tweet. "A single coal mine in Xinjiang flooded, almost killing miners, and Bitcoin hash rate dropped 35%. Sound "decentralized" to you?" Musk wrote on Twitter. A little later, Musk said that Tesla did not sell the remaining (about 90%) bitcoin coins, which helped the rate of "digital gold" to recover a little.

However, the main thing is different: Musk continues to manipulate the market. Consciously or unconsciously, it doesn't matter. No one knows how many bitcoins Tesla actually sold. This will only be available from the company's second-quarter reports, which will not be released soon. In addition, the markets continue to react very violently to Musk's statements, as if he is the creator of the cryptocurrency and can really bury it or, on the contrary, bring it to the kings. Also one of the Twitter users wrote: "Bitcoin owners will give themselves a slap in the face next quarter when they learn that Tesla got rid of the rest of their coins. Given the amount of hate Musk is getting right now, I wouldn't blame him." Under this message, Musk himself wrote: "That's right." In general, from a fundamental point of view, we would say that bitcoin will continue to decline.



In technical terms, bitcoin continues to move downwards on the 4-hour time frame after breaking the ascending trend line. The level of $43,852 is taken, so at the moment the downward movement continues. Overcoming the level of $43,852 will further increase the probability of continuing the fall of bitcoin quotes with the target of $38,467.





Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

XRP challenges major resistance

XRP/USD today briefly moved above key resistance levels of $1.60-$1.66 and reached as high as $1.70. However price has moved back towards $1.60 so we can not say yet that resistance is broken. So far price is supported and there seems to be a differentiation from the rest of the crypto market and specifically from Bitcoin.



Red line - resistance

Red rectangle- resistance area

Blue lines - support

Green line- major support area

XRP/USD best scenario for bulls is to see price break above the red resistance trend line and the horizontal resistance area. This would signal that a move above $2 is coming over the next couple of weeks. However traders should also take into consideration more bearish scenarios. In case price gets rejected at $1.60, we could see a pull back towards the blue support trend lines. First pull back target could be at $1.32. Next target would be at $1.15-$1.25. My primary scenario sees price break out soon and break above $2 targeting first $2.08 and next $2.65.





Alexandros Yfantis
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Technical analysis of the BCN/USD pair

BCN/USD


A fairly deep decline occurred during the previous week, which resulted in an encounter with a strengthened support area, and a slowdown on yesterday's daily chart. The formation of a rebound from the reached support levels will contribute to the retest of the previously broken levels of the daily cross - 1159.19 (medium-term trend) - 1312.12 (short-term trend). If the bulls manage to regain the support of the daily Ichimoku gold cross, then another test of the high (1638.69) will become relevant again, with the subsequent possibility of forming a new extremum. But if the bulls fail to complete the current downward correction, and the encountered supports 1040 - 1064 - 1109 (Ichimoku levels of different timeframes) are broken, then the development of a downward movement can be expected. The next pivot points are the levels of a fairly wide support zone, the first and nearest of them can be noted at 945 – 919 – 886.



The main advantage in the smaller time frames currently belongs to the bears. Nevertheless, the pair has been in the correction zone for quite some time, after managing to take the central pivot level (1087). In terms of the development of an upward correction, the main interest is now aimed at resisting the weekly long-term trend (1195). A consolidation above which will change the current balance of forces on the hourly chart. After that, the upward pivots will be 1270 (R2) and 1372 (R3). But in the event that bearish activity returns, the support of the classic pivot levels can be noted at 1006 - 904 - 823 today.


Ichimoku Kinko Hyo (9.26.52) and Kijun-sen levels in the higher time frames, as well as classic Pivot Points and Moving Average (120) on the H1 chart are used in the technical analysis of this instrument.





Evangelos Poulakis
Analytical expert
InstaForex Group © 2007-2021

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Ethereum Printed Continuation Pattern!

Ethereum is trading at 3,476.67 level at the time of writing. The selling pressure remains high as the price plunged below strong support levels. In the short term, the price found temporary support, and now it looks to trade higher again.

The price dropped as the price of Bitcoin registered a strong sell-off as well. BTC/USD has bounced back, that's why ETH/USD rebounded. Ethereum's corrective phase was somehow expected after its amazing growth.


ETH/USD REBOUND!


ETH/USD has found support on the 50% retracement level and on the weekly S1 (3,156.01) level. Now the crypto is trading back above 38.2% and under the first warning line (WL1) which acts as a dynamic resistance.

You can see that the price is trapped within a downward channel. The bearish pressure remains high as long as Ethereum is trading under the downtrend line. Technically, the downtrend line is seen as a continuation pattern.

A valid breakout from this chart formation could signal a new leg higher towards 4,380.64 all-time high.


ETHEREUM OUTLOOK!

The pressure is high as long as it stays below 3,591.46 high and under the downtrend line. It could drop anytime again if it fails to take these upside obstacles as soon as possible.

The upper median line (uml) of the ascending pitchfork remains the immediate dynamic support. Maybe a consolidation or a major bullish reversal pattern could indicate that the corrective phase is over.

A bullish closure above 3,591.46 static resistance could signal further growth towards the weekly pivot (3,769.96).

Dropping and stabilizing below the upper median line (uml) could signal a larger corrective phase.





Ralph Shedler
Analytical expert
InstaForex Group © 2007-2021

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Bitcoin stayed on the edge of the abyss!



By some miracle, Bitcoin was kept from fixing below the level of $43,852. However, it still held on, so the implementation of the correctional scenario is currently on pause. Recall that bitcoin has not had a strong fundamental background to continue to grow in recent months. Many consider the first cryptocurrency and the entire market to be overheated. However, it still cannot be said with certainty that the upward trend will not ultimately be resumed. At the moment, it just looks the other way around. We saw a classic three-wave corrective structure. Thus, now, when bitcoin failed to overcome the level of $43,852, and the correction looks impressive, it may just start to grow. However, this requires not only staying above the $43,852 level, but also a rebound from this level. It is not yet clear and unknown whether the buyers will be able to save bitcoin from the edge of the abyss. After all, it is possible that in recent days, bitcoin has been sold by large investors, both private and institutional. If so, they now need new reasons to start investing in bitcoin again.

Meanwhile, the crypto community lashed out at Elon Musk for his posts on Twitter regarding Bitcoin and Dogecoin. According to many market participants, Musk, with his statements and comments on cryptocurrencies, greatly affects the entire market, which often leads to losses. Moreover, many believe that Musk's posts have nothing to do with reality at all. Some experts say that Musk has absolutely no understanding of how money works. Others believe that Musk is simply provoking people online. Also, the crypto community is not happy with the fact that Musk is promoting the Dogecoin cryptocurrency, with which, according to the developers of this token, he has been associated since 2019. At the same time, Musk began to criticize Bitcoin again and publish false information about the first cryptocurrency on Twitter, causing irreparable damage to its ecosystem. True, most of the accusations against Elon Musk still sound far-fetched. Formally, Elon Musk has every right to comment on bitcoin and other altcoins. It is not his fault that the cryptocurrency market treats his statements as signals from the Fed about a change in monetary policy. On the other hand, Musk can use this factor for his personal interests and with the aim of manipulating the markets. According to some experts, Musk's statements can lead to a strong drop in bitcoin quotes, so people who own bitcoin have less money for everyday needs. Although, it is unlikely that the critic who said this is worried about ordinary people. Rather, it's about billionaires who are also losing money because of the words of the CEO of SpaceX and Tesla.



Technically, bitcoin dropped to the support level of $43,852, but failed to overcome it on the first attempt! Now is a very important time for bitcoin. In principle, the correction looks complete, so now either the downward movement will continue, but within the framework of the downward trend, or a new round of upward movement will begin within the existing upward trend. Thus, we would suggest cautious purchases from the level of $43,852. But if BTC overcomes this level, its fall will continue with the targets of $38,467 and $30,501.





Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Bitcoin continues to lose position because of Elon Musk

Elon Musk has again put fear among investors that the cryptocurrency market is overheated, not to mention at the complete mercy of speculators. His recent Twitter posts compelled traders to sell their positions, so as a result, the value of Bitcoin slipped again, continuing the bearish trend it was experiencing for two weeks already. Many believe that Musk is doing this to test the strength of the market, or to make Bitcoin cheaper so that he can gain new large positions.



But some are convinced that Musk really sold his positions, especially after the large inflow seen on various cryptocurrency exchanges. To add to that, Musk responded to a Twitter post that says he might have sold his positions already given the amount of hate he is receiving. Musk answered "Indeed", shaking the confidence of investors. Such led to a 10% drop in Bitcoin, bringing it to a new three-month low. Although on Monday morning, he made it clear that Tesla has not sold its bitcoins yet, so the price bounced back to $ 45,000.

Obviously, Musk's statements have been the main driver of the crypto market this year. Bitcoin hit $ 64,000 when Tesla revealed that it invested $ 1.5 billion in the cryptocurrency. And on a Twitter post, Musk said Tesla's recent earnings report proves that Bitcoin can be used as an alternative to keeping cash on a balance sheet.

But now, pressure on the market has returned, even amid Musk's assurances that Tesla has not sold a single bitcoin. Apparently, there was a one-day transfer of 20,000 BTC to Bitfinex last week, bringing the rate down below $ 58,000.



And just this weekend, price has fallen below $47,500, hitting $43,000. If Bitcoin continues to trade downwards, it might reach $37,900 this week, or as low as $33,300. The range will be $39,500 - $33,300. But if Bitcoin returns to $47,500, it will have an opportunity to reach $52,000 again.





Jakub Novak
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Technical Analysis of BTC/USD for May 18, 2021

Crypto Industry News:
Michael Novogratz's Galaxy Digital company published on Friday a report entitled "On Bitcoin's Energy Consumption: A Quantitative Approach to a Subjective Question", providing access to its open source calculation methodology.

A study by the Galaxy mining arm estimates that the annual electricity consumption of the Bitcoin network is 113.89 TWh, including the energy consumption of miners, the energy consumption of the pool, and the energy consumption of the nodes. According to Galaxy estimates, this is at least two times lower than the total energy consumed by the banking system and the gold sector on an annual basis.

Galaxy Digital Mining claims that while Bitcoin's energy consumption is transparent and easy to track in real-time with tools like the Cambridge Bitcoin Electricity Consumption Index, assessing energy use in the gold industry and traditional financial system is not that simple.

"The banking sector does not report electricity consumption data directly," the report reads. Moreover, the retail and commercial banking system requires multiple settlement layers, while Bitcoin offers clear final settlement. Based on Galaxy's estimates of the energy consumption of banking data centers, bank branches, ATMs and card network data centers, the total annual energy consumption of the banking system worldwide is estimated at 263.72 TWh.


Technical Market Outlook:
The BTC/USD pair has made another wave down to the level of $42,082 and bounced off the lows towards the immediate technical resistance is seen at the level of $45,710, $46,371 and $47,077. Please notice, the market still trades under the trend line resistance. 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 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]

Technical Analysis of ETH/USD for May 18, 2021

Crypto Industry News:
According to a new report, the Iranian government continues to closely monitor the cryptocurrency mining industry, initiating new measures against domestic cryptocurrency miners.

Mostafa Rajabi, a spokesman for the Iranian Ministry of Energy, said mining cryptocurrencies using household electricity is not legal and therefore such miners will face heavy fines, a local news agency said.

Household energy cryptocurrency miners will also be required to compensate for potential damage to the electricity grid, the official said.

Rajabi said the government has taken these steps to deal with Iran's energy shortage - as a result of foreign sanctions on hydrocarbons and reduced hydropower production due to less than average rainfall.

Rajabi stated that unauthorized mining of cryptocurrencies could damage the local power grid and lead to power outages. He said last week that as much as 87% of cryptocurrency mining operations in Iran are illegal.

The energy crisis in Iran has prompted the government to tightly control the energy-intensive industry. In 2018, Iran's Supreme Council Secretary for Cyberspace said that Iran's various government ministries had approved mining as an industry. Ultimately, the Iranian government approved cryptocurrency mining as an industrial activity in 2019, subjecting it to a licensing system and a regulated electricity price system.

In April, the central bank authorized banks and licensed foreign exchange stores to use cryptocurrency as payment for imports in order to mitigate the effects of sanctions imposed by the United States.


Technical Market Outlook:
The ETH/USD pair has made another wave down to the level of $3,122 and bounced towards the immediate technical resistance is seen at the level of $3,489, $3,552 and $3,596. 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 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