Cryptocurrency Analysis

[IFX_Selena]

Bitcoin returns to $42,000 after yesterday's decline to $30,000



Bitcoin has gained ground and recovered to $42,000 today after yesterday's considerable drop to $30,000 due to the twists and turns of the crypto market in China. The country has made it clear that cryptocurrency has no value and its price is very easy to manipulate and impossible to predict because of its high volatility. "Recently, cryptocurrency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people's property and disrupting the normal economic and financial order," the central bank said in the statement.

After Elon Musk said that Tesla had diamond hands and the company was not going to sell off any bitcoin, the digital asset surged. Microstrategy CEO Michael Saylor also supported the BTC rally. He pointed out, " Entities I control have now acquired 111,000 #BTC and have not sold a single satoshi." BTC soared amid that statement. So, BTC made a rebound after yesterday's dramatic decline to the $30,000 support level. Notably, bitcoin could have gone even into a deeper correction if not for the intervention of the hodlers and the support of main crypto enthusiasts Musk and Saylor. To continue its growth to 45,000-50,000, BTC will have to break above the resistance level. This will be a very difficult task for BTC.

Yesterday BTC faced strong selling pressure and total havoc in the crypto market. After a significant drop to the resistance level of $30,000, many began to get rid of the cryptocurrency and sell it off massively. This led to a depreciation of almost 50% of the market value of the cryptocurrency.

However, the US Treasury Department has made new comments about digital assets. It said it will require any transfer worth $10,000 or more to be reported to the Internal Revenue Service. The US Treasury Department has taken a close look at Bitcoin and will now monitor the movements of whales on the network, which will trade for more than $10,000, and this will appear in the reports. "This is why the President's proposal includes additional resources for the IRS to address the growth of cryptoassets," the department added. "Within the context of the new financial account reporting regime, cryptocurrencies and cryptoasset exchange accounts and payment service accounts that accept cryptocurrencies would be covered. Further, as with cash transactions, businesses that receive cryptoassets with a fair market value of more than $10,000 would also be reported on." Joe Biden and his administration made such a proposal as part of their tax enforcement plan.





Vitaly Kolesnikov
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Bitcoin and Altcoins rebound after massive sell-off

Bitcoin and other Altcoins are now recovering from the recent collapse in the crypto market. This suggests that everything went as planned, and the massive sell-off was not something that was unexpected.

In fact, the correction has long been expected in the market, but some investors still panicked and closed their short positions. Meanwhile, some retained theirs or even added more into the market.

And yesterday, about 175,000 BTC were withdrawn from various crypto exchanges, which is the largest amount recorded since the start of the pandemic. On the evening of May 19 alone, more than 37,000 coins left the crypto exchanges. Several leading cryptocurrency analysts have released reports stating that many investment funds were actively buying bitcoin immediately after the price dropped below $ 35,000. BTC data from public companies also speaks of this.



As of January 3, 2021, the amount of accumulated BTC was at the level of 1,151,618. Then, on March 3, the number increased to 1,350,118. And on May 20, it increased to 1,647,586. Obviously, this means that the Bitcoin rally is not going to end soon, and that the corrections were necessary for further bullish impulses.

For example, during the recent decline, leading crypto exchanges received a record volume of Stablecoins - around $ 5.28 billion. This suggests that many investors returned to the market and bought cheaper crypto assets while speculators recorded losses and fled from it.

The Bank of America also said that Bitcoin's popularity is very high these days, citing the results of its recent poll. According to the data, 194 fund managers (with a total AUM of $ 592 billion) said that long positions on Bitcoin are the largest transaction in the world

In short, BTC transactions are currently the busiest, not to mention accounts for about 27% of the total volume.



However, the recent market crash did disrupt the operations of crypto exchanges. Binance, for instance, temporarily disabled Ethereum withdrawals, citing network congestion. Meanwhile, Coinbase Global reported "intermittent downtime" on its platform, but later said they already identified and fixed the issue. Interruptions were also observed on Kraken.

Many users also complained that they could not purchase other digital tokens such as Dogecoin, Ripple and Shiba Inu Coins.

In any case, digital tokens are now recovering, which increases their attractiveness to the eyes of investors. Leading crypto platforms also did not have problems with the loss of assets or withdrawals, which may not be good news.





Jakub Novak
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Bitcoin has recovered slightly, and major investors are again predicting $100,000 per coin



One can only smile at what is happening now in the cryptocurrency market. Over the past month, Bitcoin has lost more than 50% of its value, as we predicted and warned more than once recently. Moreover, the upward trend, which was observed until mid-April, has clearly been drying up for several months. Simply put, the upward momentum was weakening and it became more and more difficult for bitcoin to update its highs. Even a child could see and understand this. But all this time, a huge number of "crypto experts", billionaires, owners of exchanges and funds still spoke almost with one voice that bitcoin will continue to rise in price anyway, and none of them predicted a 50% drop. Thus, you do not need to be the owner of a fund or a cryptocurrency exchange to make predictions on Bitcoin. One can say: "Bitcoin will rise in price to $100,000" or "Bitcoin will rise in price in the long term", and that's all. And it doesn't matter that maybe Bitcoin will reach the $100,000 mark in 5 years and have time to completely depreciate three times during this time, dragging many traders and investors with it to the bottom. It doesn't make much difference! Thus, it is better not to pay attention to these crazy predictions, as they are announced only in order to attract new investors to the market, to give confidence to market participants that bitcoin is growing and will always grow. Otherwise, if there is no inflow of new investors and investments, the first cryptocurrency will stop showing growth. Perhaps, someday Bitcoin will really be worth $100,000 or a million, but not anytime soon. At this time, Bitcoin just bounced off local lows after a major fall. This rebound is completely normal. Look at the two previous trends of 2013 and 2017, after which bitcoin lost up to 90% of its value. During the decline after the trend, there were a lot of such strong, "bullish" candles, which were also designed to save the upward trend. Thus, we are still inclined to believe that the upward trend is over and bitcoin will now continue its systematic decline, perhaps even below the $30,500 level. At least at the moment, there is no reason to suppose the resumption of the "bullish" trend. Well, one can never forget the fundamental background that was, is, and remains extremely weak for "digital gold". We have already listed all the negative news of recent times. But there are no positive ones that could support the demand for bitcoin, except for the eternal reports that states "bitcoin has already headed for $1,000,000".



In technical terms, bitcoin fell to the support level of $30,500, and to the support level of $29,873, bounced off them and is currently trading around the level of $40,000 per coin. From our point of view, it can now consolidate for some time and even rise to $45,000 per coin. But in the medium term, it will now decline. However, you will need to look at the indicators. At the moment, the quotes are below the critical line, so there is no prerequisite for the resumption of growth.





Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Technical Analysis of BTC/USD for May 21, 2021

Crypto Industry News:
The Russian State Duma, the lower house of parliament, adopted a bill in first reading that obliges MP candidates to disclose whether they had previously bought any cryptocurrencies. The relevant provision is to be included in the electoral law. Candidates for seats in parliament will be required to disclose the amounts they have invested to acquire digital financial assets as well as the timing of the investment.

The bill, which has been proposed by the government, introduces the necessary changes after the adoption of the law "On digital financial assets and digital currency," informed the news agency Prime.

Importantly, however, the above rules apply when the total amount invested in cryptocurrencies has exceeded the total income earned by the candidate and their household in the last three years. At the same time, Russian politicians will have to provide details revealing the source or multiple sources of funds from which such transactions are financed.

The new legal act amends two important federal laws - the law "On the election of the President of the Russian Federation" and "On the election of deputies to the State Duma".

The amendments also apply to the acts defining the basic electoral rights of citizens of the Russian Federation, including the right to participate in referenda, and a number of other legislative acts. The updated law will enter into force in the first elections following its adoption.


Technical Market Outlook:
The BTC/USD pair has been testing the level of $41,794, which is just above the 38% Fibonacci retracement seen at $41,096. The other immediate technical resistance is seen at the level of $40,922 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 $41,096 (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 21, 2021

Crypto Industry News:
According to Carl Beekhuizen of the Ethereum Foundation, the upcoming Ethereum 2.0 update will help reduce blockchain energy consumption by 99.95%. It will also ensure that the chain will no longer "eat as much power as entire countries":

"By my (very conservative) calculations, Ethereum will see a greater than ~ 99.95% reduction in energy use post merge".

Considering the total number of validators, unique addresses and the average energy consumed by excavators, the resulting figure was significantly lower than the current energy requirement of Ethereum, which uses the proof of work (PoW) consensus mechanism.

"Overall, Proof of Stake Ethereum uses something on the order of 2.62 megawatts. It is not a scale of countries, provinces, or even cities, but a small town (around 2,100 US houses)."
- wrote Beekhuizen.

Currently, the Ethereum blockchain uses the same energy-intensive proof of work (PoW) consensus mechanism as Bitcoin. However, that will change soon, thanks to Ethereum 2.0. An ambitious, years-long update will shift the web to a greener consensus mechanism called proof of stake (PoS).

The proof of stake is when users block - or stack - Ethereum. In this way, they support the production of new blocks, rather than using energy-intensive cryptocurrency miners.

In terms of energy per transaction, ETH 2.0 consumes the equivalent of "around 20 minutes of television". For comparison, one transaction on PoW Ethereum requires an amount of electricity that could power the entire house for 2.8 days. One Bitcoin transfer uses the same amount of energy as "whole house for 38 days".

While ETH 2.0 is still in its introductory phase, users blocked over $ 4 million worth of tokens in a post-deposit contract. The first test networks for ETH 2.0 were launched at the end of April. However, the exact date of full implementation is very difficult to establish.



Technical Market Outlook:
The ETH/USD pair has been seen trading close to 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]

Altcoins continue to fall amid bitcoin collapse: forecasts

The last few days have been a turning point for the cryptocurrency market. The sharp declines in bitcoin and the negative news background provoked a sell-off of crypto assets, which caused technical problems on the largest crypto exchanges. However, compared to the previous days, the current drop in the crypto market did not go beyond 4.5%, and the total capitalization of all cryptocurrencies is $1.8 trillion. Over the past day, crypto traders have lost more than $8 billion in the market crash.

Ethereum quotes also began to decline due to reports from China and the subsequent collapse of bitcoin quotes. Over the past day, the asset has fallen in price by 10% and consolidated in the area of $2,686 with significantly increased daily trading volumes, which amount to $135 billion. At the same time, the narrower dynamics of changes in the price of the asset remain positive (+3.2%). However, the events of recent days have had a negative impact on the total capitalization of the cryptocurrency, which has decreased to $321 billion. In 24 hours, the losses of traders on the ETH/USD pair amounted to more than $2.2 billion. Due to an additional wave of negativity, the ether network could not withstand the load of users, and ETH commissions rose to $1,300. The Binance crypto exchange was even forced to suspend the withdrawal of the altcoin to stabilize the situation. Given the current market situation, Ethereum will not have enough of its own resource to hold on to safe positions, and the asset will likely sink to $2,500 by tomorrow



The XRP token, which has proved to be the sole driving force of the cryptocurrency market in recent days, also failed to stay afloat. The coin's performance has sunk by 19% over the past 24 hours, and daily trading volumes indicate increased attention to the asset due to its low price of $1.17. This is also evidenced by the dynamics of price changes over the past few hours, which remains positive (+3%). In the near future, the Ripple coin will try to reach the usual $1.4 mark, which will be helped by new users who have entered the asset at an acceptable level. The recent local victory over the SEC gives investors a reason to believe in the asset, but possible fluctuations in bitcoin can flip the coin again.



Litecoin shows the greatest dependence on the market situation. This becomes obvious both with the growth of quotes and with the fall. Over the past day, the asset fell by 21% amid the collapse of bitcoin to $30,000. Despite the positive dynamics of price changes over the last hour (+4%) and high daily trading volumes, the asset will not be able to hold an acceptable position above $230, even if it reaches it.



Despite the clearly negative background provoked by the collapse of bitcoin, statements about the tightening of regulation of cryptocurrencies from China and the United States, the market still has reasons for optimism in the longer term. For example, the American bank Wells Fargo has provided its institutional clients with the opportunity to make transactions with cryptocurrencies, and, according to a new report by Bison Trails, more than 80% of central banks are considering the introduction of state-owned cryptocurrencies. In general, the industry is mired in a depression, provoked by the natural process of redistributing the influence of individual coins, as well as the desire of states to receive income from a new type of financial transactions





Artem Petrenko
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Elon Musk's "Diamond Hands"



Recently, the name of Elon Musk is again on the lips of the whole world. Given that it is Musk's tweets and statements that affect bitcoin almost better than anything else, many investors of different calibers are looking forward to his new comments. And they waited for a similar tweet, while bitcoin was in its downward rally yesterday. On his Twitter account, Musk wrote: "Tesla has diamond hands." In the language of Wall Street, this means that a company or investors hold a certain asset until the end, despite a strong fall. Thus, many traders could "read" in this message that Tesla is not selling its bitcoins at this time. It is not known how much this information corresponds to the truth, since a couple of months ago, Tesla already allowed its customers to buy electric cars for bitcoin. And then a month later, they announced the suspension of such practice. Nothing prevents Musk from writing tomorrow or saying that Tesla has sold all its bitcoins and is now investing in Dogecoin.

Meanwhile, several companies and banks associated with investing in digital assets announced a record outflow of funds and crypto instruments. Similar statements were made by the investment bank JPMorgan, as well as the asset management company CoinShares. The latter announced an outflow of funds for $98 million, which is an absolute anti-record. The last such record was set in May 2019, when the outflow was 19 million. It should be understood that this data is only for one company. And there are many such companies, therefore, the amount of capital outflow is much higher.

It also became known that many investors and traders are afraid that China will continue to tighten the rules for the circulation of cryptocurrencies and work with them to financial organizations. In addition, it is possible to introduce restrictions on mining, storage, and circulation of cryptocurrencies in other countries. In general, now the whole market is sitting on a powder keg and just waiting for where and when the new kick will come from. Experts agree that the collapse was due to inflated expectations of investors. Simply put, for a crypto asset to constantly become more expensive, a constant new influx of investors and investments is required. And the efforts of one Microstrategy company are clearly not enough here. Investors who bought bitcoin above $50,000 made a mistake because, after their investment, new investments in bitcoin simply did not follow. The market has exhausted its demand, and Elon Musk and other negative news led to the fact that many margin positions were eliminated. As they say, the market is "overheated". However, we have long said that bitcoin is preparing for a correction. This was visible on the upward trend on the 24-hour time frame. Now, as we have already said, we need to wait for the market to calm down, and carefully monitor the key levels.






Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Bitcoin: "bloody Wednesday" is not a knockout for cryptocurrencies

At least that's what Mike Novogratz, CEO of Galaxy Digital, and a well-known cryptocurrency advocate, thinks so.

Novogratz considers yesterday's collapse, and the previous days of the market decline, "a supply reaction." More and more participants, companies, and projects appear on the market that seek to become a part of it. Yes, it generates demand.

In 2017, during the first wave of the bullish market and the dominance of ICOs, something similar was observed. After the collapse, only the strongest projects survived. Now, too, only those who prove their worth to society will be able to survive and prosper.

The "carnage" of May 19, according to Novogratz, is the time to make a move, not a knockout for the market. Of course, this situation will harm many, but now is not the time to sell.

Even though the main cryptocurrency fell below $30,000 yesterday, Novogratz does not abandon his previous forecast of a possible flat in the $40,000-$45,000 range before the market moves to the next stage.

But not everyone is so patient and optimistic. Scott Minerd of Guggenheim Investments thinks that it is now appropriate to recall the comparison of the cryptocurrency market with the tulip mania.

CryptoQuant CEO Ki-Young Ju refers to the signals of the Whale-Dump indicator and states that the market is already bearish and the worst is yet to come. "Crypto investor whales started depositing BTC on exchanges when the price was $50,000. I was super optimistic before Elon's tweets. What followed later looks like a butterfly effect. " he said.

Ki-Young Ju states that the whale drop indicator has reached an annual high since the market crash in March 2020: "If this is an organized move, Bitcoin will fall again. If not, we can at least retest the bottom."

The massive outflow of bitcoins from exchanges also became known: coins worth more than $750 million were withdrawn in the blink of an eye.

But such industry giants as Michael Saylor and Cathie Wood from Ark Invest, following Novogratz, are confident in the prospects of bitcoin in the future. Saylor notes that all organizations under his control still hold $111,000 worth of digital coins without selling anything.

Meanwhile, on the bitcoin daily chart, we see that yesterday's "carnage" left behind long shadows. As noted in yesterday's forecast, bitcoin went into the $29,000 mark, but the day closed above $34,708.27.

Today's daily candle so far confirms the level of 34,708.27 as a support. Resistance remains at 41,980.24. Now, this horizontal line should be the focus of attention.

If the price breaks the level of 41,980.24 and can gain a foothold above it, it will be possible to look for further recovery. But if it confirms it as resistance, it is technically possible to return to the levels of 34,708.27, or even 28,392.99.






Ekaterina Kiseleva
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Bitcoin forecast for 20th May, 2021

BTC found support at $30,000 yesterday.
$42,000 resistance tested yesterday.
BTC/USD moved sideways earlier today.



Today's Bitcoin price projection s bullish as the market currently consolidates and prepares a base from which to push higher over the remaining week.

The crypto market trades in the red over the last 24 hours. Bitcoin has managed to regain some of the losses seen earlier and trades with a small loss of 1.8 percent. Meanwhile, Ethereum trades with a loss of 8.9 percent, with the rest of the altcoin market posting similar results.

The BTC/USD price moved in a range of $30,681 – $40,738, indicating a good amount of volatility. Trading volume has increased by 87.65 percent and totals $131 billion over the last 24 hours. The total market cap stands at $752 billion, resulting in market dominance of 43.31 percent.

On the Daily chart, we can see BTC/USD testing the $42,000 support which turned resistance for the first time with a rejection for further upside. Therefore, the Bitcoin price has likely exhausted its bearish momentum, and further downside is unlikely.

The current BTC/USD price action should lead higher over the remainder of the week. Once the $42,000 resistance breaks, we expect further push higher to the $47,000 resistance. From there, the Bitcoin price action will likely attempt to set a higher low and try to reverse back to the upside over the next weeks.





Jan Novotny
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Bitcoin bounces strongly above $40,000

Bitcoin bulls are fighting back today as price made a low yesterday just below $30,000. Short-term trend remains bearish. Price has so far made an impressive reversal but we need to see more signs of strength in order to be more sure that a low is in.



Blue lines - Fibonacci retracement

Red rectangle - resistance (previous support broken)

Bitcoin has retraced more than 50% of the rise from 2018 lows. The chances of a major low just below $30,000 are high, but there is no confirmation yet. Major resistance is found at $47,000. Bulls will need to recapture this key resistance level in order to reclaim the trend. Until then, price remains vulnerable to a new lower low and the return of stronger sellers.





Alexandros Yfantis
Analytical expert
InstaForex Group © 2007-2021