Cryptocurrency Analysis

[IFX_Selena]

Trading Signal for BTC/USD (Bitcoin) for May 20 - 21, 2021: Buy above $40,000



A combination of bearish factors resulted in the 54% correction in recent days. For example, earlier this month when US Treasury Secretary Janet Yellen and Securities and Exchange Commission Chairman Gary Gensler expressed their concerns about the cryptocurrency sector.

Besides, negative comments came from Elon Musk. Chinese trade associations warned about investing in cryptocurrencies. This undoubtedly spooked crypto investors and the market liquidated to the 1/8 murray level around $ 29,701 correction of more than 50%.

The fall to $29,701 on May 19 makes us think that the market has established a very strong bottom and it is likely that it will try again to test this strength when it does a double bottom or triple bottom. Only then we have a long-term bullish perspective.

On the 1-hour chart, we note that BTC is trading above the 21 SMA and above the 2/8 Murray key support level. As long as BTC is holding above these levels, a bullish move to the zone of the EMA 200 is in the cards.

The BTC chart shows that the crypto is ready to challenge the $4,7250 zone in the short term. We also notice the formation of a shoulder head shoulder pattern. As long as you trade above 2/8 ($37,500), your target will be $47,250.

The technical reading of the eagle indicator is giving a bullish signal and has some ground to cover up to overbought levels. This indicator also shares the idea that BTC will continue its technical rally.

Our recommendation is to buy right now above 40,191 and above 37,500, with targets at 43,750 and 47,250.


Support and Resistance Levels for May 20 – 21, 2021
Resistance (3) 49,213
Resistance (2) 47,581
Resistance (1) 44,590


Support (1) 38.897
Support (2) 33,645
Support (3) 30,774




Dimitrios Zappas
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

BTC analysis for May 20,.2021 - Key pivot set at $42.500

Technical analysis:


BTC has been trading upwards after the strong rejection of the strong support at $30.000. THe key pivot is now set at $42.500.


Trading recommendation:
The rejection from the $42.500 can be good sign for short setups and potential for test of $35.00The breakout of the $42.500 can be good sign for buying setups with the target at $46.840





Petar Jacimovic
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Ripple Exit Its Range Soon?

Ripple was trading at 1.1600 at the time of writing. The price bounced back but now it has found a temporary resistance again. XRP/USD registered a 43% drop in yesterday's session as the cryptocurrency market has crashed.

Ripple has found strong support, demand, right below the 1.0000 psychological level, and now is fighting hard to increase. Personally, I believe that XRP/USD may register a new decline soon, maybe to retest the immediate support levels before developing a swing higher.


XRP/USD ENDED ITS SELL-OFF!


Ripple has been trapped inside a range. A valid breakout from this sideways mode will really bring a good trading opportunity. XRP/USD has registered only a false breakdown with great separation below the S2 (0.9994) signaling the current rebound at least until the S1 (1.2244).

Stabilizing above the descending pitchfork's upper median line (UML) could signal a potential growth towards the 150% Fibonacci line.

XRP/USD could continue to move sideways in the short term. Only a valid breakdown below the 50% retracement level and under the S2 (0.9994) may announce a downside breakout and a deeper decline.


FORECAST!
Ripple could increase in the short term if it stays above the 50% retracement level and beyond the S2. The price could approach and reach the 150% Fibonacci line even if it moves sideways.

Personally, I believe that a valid breakout above the 150% dynamic resistance could signal that the rate will come back higher towards 1.7 area. I would like to see a consolidation above the 1.0000 level before the rate starts increasing again.





Ralph Shedler
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Trading plan for Bitcoin for May 20, 2021



Technical outlook:
Bitcoin had extended its drop yesterday through $30,000 levels, while fibonacci extensions were pointing towards $37,000 levels as discussed earlier. Please note that the crypto has bounced right off the trend line support, indicating that bulls might be back in control. Also note that previous support around $28,500 remained intact.

Bitcoin traders might prepare to initiate fresh long positions between $36,000-39,000 zone with risk just below $28,000 mark. The upside potential now remains above $65,000 in the next few trading sessions. The crypto is seen to be trading around $39,900 levels at this point in writing and is expected to resume rally from here on.

Immediate support is just around $28,800; while resistance is seen at $60,000, followed by $65,000 levels respectively. If bulls are back in control, Bitcoin will stay above $30,000 mark and continue higher above $65,000 levels, going forward.


Trading plan:
Remain long, stop @ 28,000, target @ 65,000 plus.

Good luck!





Oscar Ton
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

JPMorgan: Institutions have started transferring money from bitcoin to gold



The fundamental background for bitcoin in the last month has been extremely poor. There were several messages from China, where there were accidents in coal mines, and there was a shortage of coal, which led to interruptions in the supply of electricity to some regions of the country, which provoked the suspension of the mining process on many farms and lowered the hash rate of the network by 20-40%. There were the constant and uncontrolled posts on Twitter by Elon Musk, who either praises Bitcoin or criticizes it, and the news that Tesla offered its customers the opportunity to pay for electric cars in bitcoins, then reversed its decision. Plus, there was the news from the US Department of Justice that an investigation has begun against the Binance crypto exchange. In addition to this was the so-called "altcoin season". Also in China, regulators have banned financial institutions from providing any services related to cryptocurrencies. These are just the main news of recent times, which clearly spoke not in favor of "digital gold". According to the latest information provided by the American investment bank JPMorgan, institutional investors have been transferring their capital from bitcoin to gold in the last month, although they have been doing the opposite for the last two quarters. The bank's experts analyzed the number of closed bitcoin futures over the past month and came to the conclusion that the outflow of large investors has begun from the bitcoin network. In principle, this is not surprising, since bitcoin has become cheaper in the last month, and yesterday it completely collapsed downward. Also, many analytical companies and independent experts reported that a record number of coins have arrived on cryptocurrency exchanges over the past few days. This means that many digital gold owners have been trying to get rid of their coins. Thus, so far, the conclusions for Bitcoin are not encouraging. If institutionalists seek to get rid of their investments in cryptocurrency, then it is unlikely that we will have to rely on them to save bitcoin from a new fall. Therefore, in the coming days, we need to wait for new information from market participants. It is unlikely that we will see these days forecasts that say bitcoin will reach $100,000 per coin until the end of the year. Most likely, the negative background will only intensify. Of course, the market itself is now waiting for new statements by Elon Musk, who can not only lower the rate by several thousand dollars, but also easily raise it. In any case, we are waiting for news.



Technically, bitcoin on the 4-hour timeframe fell to two important support levels, after which it began a corrective rise. But, as we can see, the cryptocurrency has not yet managed to gain a foothold above the critical line of Kijun-sen, which lies at the level of $39,755. If such a consolidation takes place, it will be possible to count on the growth of "digital gold" to the level of $43,852 or slightly higher.





Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Bitcoin loses 10% of its market value

Bitcoin collapsed again yesterday, reminding investors of the instability of the crypto market. It dipped by as much as 10%, giving it a market cap of $ 724,907,570,669.

So all in all, BTC has fallen by 29% from its highest value, and its market capitalization has decreased by $ 500 billion. And although there was an impressive rebound after, which made it possible to compensate for up to 15% of the loss, traders will most certainly not forget this tragic decline.



As for Ethereum, which is currently the second largest cryptocurrency, a massive drop of more than 40% was observed. Meanwhile, Musk's favorite token, Dogecoin, lost roughly 45%.

The sell-off came at a time when stocks and commodities were also under pressure, and when the Federal Reserve released the minutes of its most recent meeting. It disrupted the work of large crypto exchanges such as Coinbase Global and Binance.

But all of these started when Tesla CEO Elon Musk announced that his company will no longer accept bitcoins as payment.

Then on Tuesday, the People's Bank of China escalated the situation, when it said it does not recognize digital tokens as a form of payment. The central bank also imposed a number of restrictions on companies, forbidding them to engage in crypto transactions.

As a result, Bitcoin dropped to $ 29,700, which is very tragic since a month ago it was trading at $ 64,000. But for traders who have long been waiting for a correction, this decline is very good news.

In any case, there is nothing to worry about on the crypto market as long as Bitcoin remains above the 200 MA. Doing so will maintain the bullish trend. Accordingly, a drop below the level will immediately result in a sharp collapse, which is what happened with Bitcoin back in 2018. That time, BTC hit $ 20,000 and started a bear market. The downward movement lasted for two years.



Still, the medium-term forecast for Bitcoin is full of hope, as from the 200 MA, there is a chance of a quick recovery to $ 52,000, and then a sharp jump towards $ 64,000. But if Bitcoin drops below the 200 MA, its value will decline to $ 29,000, and then to $ 22,000.






Jakub Novak
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Technical Analysis of BTC/USD for May 20, 2021

Crypto Industry News:
BlockFi mistakenly deposited millions of dollars worth of bitcoins into user accounts. The company is now threatening legal action against anyone who fails to refund.

The payments were related to the promotion of prizes on the loan platform. Users were supposed to get GUSD, a 1USD stablecoin, but were given BTC instead. One screenshot shows that a user received a reward of 701.4 BTC, worth around $ 28 million at today's prices, instead of GUSD 701.4.

Several other people reported receiving similar payments on Twitter and the BlockFi subreddit. A representative of BlockFi released a statement on the error, confirming that "fewer than 100 customers have been incorrectly credited in the context of a promotional payment that was not due to them."

Interestingly, BlockFi reached out to those who received payments by mistake, offering $ 500-1,000 to compensate for the inconvenience. The company threatened clients with legal action if they did not return the funds.


Technical Market Outlook:
The BTC/USD pair has bounced to the level of $40,454 after the sell-off terminated. The immediate technical resistance is seen at the level of $40,922, $41,794 and $43,159. Please notice, the market still trades under the trend line resistance and under the zone located between the levels of $43,1459 - $41,794. The market is in full control of bears and only a strong breakout above the level of $41,086 (38% Fibonacci retracement of the last wave down) 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 $30,000 is clearly broken on the daily time frame chart (daily candle close below $30k).






Sebastian Seliga
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Technical Analysis of ETH/USD for May 20, 2021

Crypto Industry News:
The China Internet Finance Association has signed a joint statement with the China Banking Association and China Payment and Clearing Association, alerting the public to the risks of investing in cryptocurrencies.

According to a report by Shanghai Securities News, the aforementioned industry association within the People's Bank of China (PBoC) issued a statement entitled "Preventing the Risks of Speculation in Virtual Currency Trading".

The joint statement is reportedly an extension of previous PBoC statements regarding Bitcoin and cryptographic threats. As part of the communique, the associations outlined four issues related to cryptocurrency investment, starting by calling on their members to understand the nature of digital currencies.

According to the announcement, cryptocurrencies are not "real currency" and should not be used as a medium for the exchange of goods and services. In July, the Arbitration Commission issued a ruling according to whose Bitcoin is a virtual commodity.

Second, the associations warned financial institutions and other member organizations not to engage in cryptocurrency-related business transactions. The part of the document specifically relating to online platforms reads:

"Online platform corporate members will not provide services such as online business premises, commercial exposures, marketing promotions, paid rerouting, etc. for virtual currency business activities. Where guidance or related problems are found, they will immediately contact relevant departments and will provide technical support for related investigations and assistance. "

Industry associations have also warned retail traders to be wary of the risks associated with cryptocurrency investments, while urging member institutions to comply with existing digital currency laws.

China banned the issuance of tokens and the trading of cryptocurrencies in 2017, forcing major exchanges to relocate their activities outside the country.


Technical Market Outlook:
The ETH/USD pair has bounced from the low made at the level of $2,038 and hit the level of $2,929, which is a 38% Fibonacci retracement of the last wave down. There is a lower channel line as well around this level, so the local bounce towards the technical resistance seen at the levels of $3,122, $3,184 and $2,955 is possible. The market is in full control of bears and only a strong breakout above the level of $2,929 (38% Fibonacci retracement of the last wave down) would temporary change the outlook to bullish (but still corrective in nature). The next target for bears is seen at the level of $1,941.

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

[IFX_Selena]

Bitcoin is recovering quickly, but this doesn't mean anything



Yesterday, when bitcoin was still trading at $40,000 per coin or so, we said that the cryptocurrency can now sink to the $30,500 mark. And just a few hours later, this forecast was fully confirmed. The avalanche-like fall of the first cryptocurrency in the world ended just around the level of $30,500 with a minimum in the region of $29,500. After that, an equally strong recovery began, as a result of which bitcoin managed to win back about $10,000 of losses in less than a day. Ergo, there was a rebound from the level of $30,500 and now it may seem that the cryptocurrency is ready for new achievements and will resume the upward trend. However, we should not jump to conclusions. Studying similar periods of decline in 2013 and 2017, it is possible to make an almost unambiguous conclusion: during the decline in bitcoin quotes by 80-90% after strong upward trends, strong bullish candles were repeatedly observed. That is, as bitcoin once again plunged into the abyss, buyers sought to save it, but in the end, nothing came of it twice. In principle, it is even logical that around the strong support level of $30,500, which is one of the past local lows, a certain part of traders and investors began to buy bitcoin again. Still, even for bitcoin, it is impossible to fall by 80-90% in a few days. Thus, after it has already fallen by $13.5 thousand per day, it would be naive to expect that it will immediately fall by another 10-15 thousand. So, a completely natural upward pullback began. However, the most important thing to understand now is whether institutions and large investors are going to continue their investment in bitcoin after it has lost more than 50% of its value? Yes, the cryptocurrency has returned to the level of $40,000 per coin now, but many investors who bought "digital gold" in recent months are now at a loss. And in order to offset these losses, we need new investors and investments. And how do we convince new investors or even themselves of the feasibility of buying bitcoin, if the cryptocurrency has lost more than half of its value in less than a month? In general, despite the recovery, the days of determining its future are really hard for bitcoin. If the markets once again believe in it, then the upward trend can be restored. But we are still inclined to the point of view that the cryptocurrency will now become cheaper in the long term. Recall that this is not only because of the mass sales by investors, but it is also the fact that the fundamental background of the last month was clearly not in favor of the first cryptocurrency. And at this point, we can't conclude that anything has changed. Moreover, the market received information that many investors are now transferring their assets from unstable and high-risk bitcoin to classic gold. If so, the process of capital outflow from the Bitcoin network to alternative cryptocurrencies and investment tools can be continued.



Technically, bitcoin fell to the support level of $30,500, and at the same time to the support level of $29,873. Thus, all corrective targets were worked out perfectly. At the moment, the upward rollback has begun and the rate may well recover in the next few days to $45,000. But, from our point of view, it will be very difficult for it to continue to grow above this mark.





Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

XRP/USD: Resistance at $1.60-$1.70 is as important as it was back in $0.65-$0.75.

XRP/USD did not differentiate much from the rest of the crypto market yesterday. Heavy selling pressures pushed price as low as $0.83 making new lows. Buyers stepped in and price is now back above $1.15. Price still holds the major break out area of $0.65-$0.75 which is now major support. Traders were warned what would follow if price were to get rejected at $1.60-$1.70 resistance area.



Green rectangle- major support

Red line- resistance

Red rectangle - major horizontal resistance

In our previous analysis traders were warned not only in case of rejection at $1.60 but also what we could see if price broke below support of $1.20. Have we seen a capitulation low? Or should we see one more test of the green major support area? One thing is for certain. In order for bulls to regain control of the trend and in order to see new 2021 highs, bulls will need to break above the red rectangle resistance at $1.60-$1.70. This resistance is now as important as the resistance back in $0.65-$0.75. Breaking above this level will be a big win for bulls. Breaking above it will surely push price above $2-$2.30.





Alexandros Yfantis
Analytical expert
InstaForex Group © 2007-2021