Cryptocurrency Analysis

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Ethereum Aims At 3,000 Psychological level!

Ethereum is trading in the green at the time of writing at 2,836.13 level and it seems poised to climb towards the 3,000 psychological level. The price has invalidated a new strong drop, so further growth is favored right now.

The price continues to move sideways but I really hope that we'll have an opportunity soon. The corrective phase seems over, so ETH/USD could try to develop a new leg higher after the current range.


ETH/USD UPSIDE BREAKOUT!


ETH/USD has managed again to come back above the immediate downtrend line. Now is pressuring the 50% Fibonacci line which represents strong static resistance. Closing and stabilizing above this obstacle may signal further growth at least until the 3,000 psychological level.

A valid breakout above 3,000 psychological level could really announce a broader growth ahead. I believe that the bullish scenario could be invalidated only if the price of ETH/USD drops and stabilizes below the pivot point (2,626.60)


ETHEREUM OUTLOOK!
You can go long on ETH/USD if the price closes a bullish candle above 2,890.60 high. Also, a valid breakout above 3,000 could really announce a larger growth in the upcoming weeks.





Ralph Shedler
Analytical expert
InstaForex Group © 2007-2021

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Bitcoin remains trapped inside triangle pattern but not for long

Bitcoin continues to trade in a sideways triangle pattern. Price continues to respect the lower triangle boundary and this keeps hopes for bulls alive. Bulls will need to break above $38,600 in order for the short-term trend to gain some bullish momentum.



Red lines- triangle pattern

Bitcoin is in a neutral consolidating phase. The previous trend was bearish after the $65,000 top and decline towards $30,000. Our most probable scenario is for price to break the triangle to the downside. We do not rule out a break to the upside that is why traders need to be very cautious as long as price is trapped inside the boundaries of the triangle.





Alexandros Yfantis
Analytical expert
InstaForex Group © 2007-2021

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Major Wall Street banks are divided into two camps in relation to bitcoin and gold

Bitcoin is frozen in one place and seems to be hibernating the next hike in the area of $ 20,000. And while there is no movement and the technical picture remains unchanged, the market is again talking about the fact that investors are increasingly giving more interest to cryptocurrency than gold, and there are several objective reasons.

According to a report from one hedge fund, which manages $ 7.5 billion, gold will continue its growth to new highs next year. However, investors looking for alternatives may well pay attention to bitcoin. Next year, many central banks in developed countries plan to start revising monetary policy against the backdrop of a severe increase in inflation, which is another argument in favor of gold as an asset that protects against inflation.

Unsurprisingly, investors keep an eye on the US Central Bank's comments as inflation gradually picks up, and policymakers move closer to scaling back huge asset purchase programs. The observed monetary support has already led to a record reading of the Fed's balance sheet, which could pose serious risks to the value of the US dollar in the future, potentially increasing the attractiveness of other alternative instruments.

Most likely, both assets will be in serious demand, which will eventually show how much investors trust new technologies and how much they believe in the fundamental component of cryptocurrency. Former Treasury Secretary Lawrence Summers believes that cryptocurrencies can represent something similar to digital gold. Some portfolio managers also try to stick with bitcoin and other cryptocurrencies because they have much more room for growth. Even despite the high volatility and instability of the world's first cryptocurrency, the profit from it is much greater than from investing in gold.



As for the numbers, since the growth of bitcoin, there has been constant talk about whether the digital token will outrun gold and take its privileges. Back in March of this year, gold was close to plunging into a bear market. However, it sharply changed course amid changes in the attitude of the authorities to monetary policy.

Leading Wall Street banks are divided into two camps: Citigroup Inc. said that gold "loses its luster and attractiveness" compared to cryptocurrencies. However, Goldman Sachs Group Inc. believes that these two assets can coexist in parallel with each other. Last year, gold reached a record high (above $ 2,075 per ounce). However, it quickly corrected, and the attention of investors turned to bitcoin and other digital assets.

In digital currencies, it is worth paying attention to the recent statements of representatives of the Bank of England. The report says that most of the deposits in retail banks can be converted to digital currencies if governments start offering them. The UK Central Bank has modeled the introduction of the digital pound into the retail banking sector and considered what would happen if a fifth of all deposits went digital. Economists did not see anything critical in this. However, they noted that any large-scale redistribution of funds could affect the money markets. The findings point to the scale and complexity of the challenges that will arise as the Central Bank modernizes its working methods and attempts to link payment systems to the digital national currency. However, the same model showed that the introduction of digital assets would help simplify the work with online payments.

"We live in an increasingly digital world in which the way we make payments and use money is changing rapidly," Bank of England Governor Andrew Bailey said in a statement. "The prospect of stablecoins as a means of payment and the new CBDC offerings have created many challenges that central banks, governments, and society at large must address in the near future."

Thus, the Bank of England is on a par with the Fed, the ECB, the Central Bank of China, and Japan, which are actively engaged in developing and introducing their national digital currencies.

As for the technical picture of bitcoin, it has not changed much. Bitcoin continues to wobble along the channel from side to side, licking its middle in the area of 36,300. Its breakdown leads to pressure on bitcoin and a decline in the area of lows - to 31,000. Its break up will allow traders to push bitcoin to the upper limit (41,100), where the pressure returns. We will be on this channel for quite a long period.





Jakub Novak
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Analysis and forecast for Bitcoin on June 7

Today is the beginning of a week that is extremely important for traders in the European session. On Thursday, the European Central Bank will hold a meeting, the expectation of the results of which caused a certain stagnation of the euro/dollar quotes. In turn, the pound, on the contrary, weakened its position amid concerns about a possible delay in the final lifting of restrictions in the UK on June 21. The delay is possible in the event of a surge in the number of infections with a new strain of Delta coronavirus, which was first detected in India.

In addition, the pound has almost completely lost the gains it gained after the publication of the report of the United States Department of Labor, which is generally not surprising, given the content of this very report. The US labor market continues to recover and will recover further.

However, the single European currency has gone into a pronounced sideways movement and is in no hurry to adjust. To some extent, you can refer to an empty macroeconomic calendar. However, what is happening with the pound indicates that this is not entirely true.

The stagnation in the single European currency is rather more related to the expectation of the meeting of the board of the European Central Bank, which will be held this week. And investors would rather like to clarify what comments will follow immediately after this very meeting. Moreover, there is some uncertainty about the position of the European regulator on the issue of inflation, which continues to grow. Moreover, there are all the prerequisites for the fact that the growth of inflation can only accelerate. In other words, market participants do not understand at all what to expect – signals to tighten monetary policy or that everything will remain unchanged. It is this very uncertainty that plunges the single European currency into a kind of stagnation.

Last Friday, the EURUSD currency pair showed a relatively high speculative interest during the start of the US trading session, which coincided with the publication of US statistics.

The intense upward movement of the price returned the quote to the previously passed level of 1.2160, where stagnation was eventually formed.

Analyzing the current trading chart, you can see a relatively narrow price fluctuation compared to the dynamics on June 4. The key coordinates, relative to which the growth of trading volumes is possible, are considered to be the following values: 1.2140 in the case of a downward development; 1.2185 in upward development.

The GBPUSD currency pair followed the euro up last Friday. However, it is worth considering that the quote follows within the boundaries of the previously established side channel between 1.4100 and 1.4240, where there was a rebound from the lower border at 1.4100 with a movement towards the middle level of the channel 1.4172.

Analyzing the current trading chart, we can see that the price rebound from the average level of 1.4172 almost managed to return sellers to the lower border of the side channel of 1.4100, where a reduction in the volume of short positions again occurred.

The tactics of trading based on consecutive rebounds are relevant among traders. However, at the same time, it is worth considering the strategy of breaking a particular border of the side channel.





Chin Zhao
Analytical expert
InstaForex Group © 2007-2021

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El Salvador plans to legalize Bitcoin



El Salvador President Nayib Bukele said he plans to pass legislation that will make Bitcoin a legal tender in the country. He claims that doing this will "improve the lives and future of millions," as it would create jobs and provide access to credit, savings, investments and secure transactions. Bukele said he would introduce a corresponding bill to the Congress in the coming days.

At the moment, El Salvador has a low banking penetration rate, not to mention about 70% of the population do not even have a bank account. Bukele said legalizing Bitcoin could improve the situation since it will facilitate faster transfers of remittances.



In addition, last month, El Salvador's bonds plummeted, after the administration sacked five senior judges and the attorney general. Wall Street responded to this by selling assets, for example, firms such as Oppenheimer, Amherst Pierpont and Allianz sold promissory notes or advised clients to cut their assets.



The move raised concerns that the United States might urge the International Monetary Fund to scrutinize a much-needed loan for El Salvador, which could lead to disruptions in public finances.

According to opinion polls, Bukele is one of the most popular leaders in the region, with an approval rating of over 85%. He actively follows social media and charted an unconventional path into politics. He worked for his father's marketing agency before serving as mayor of San Salvador and its suburbs. Bukele ran for president in 2018, with promises to curb corruption and criminal gangs. He became the first president in nearly 30 years to win without the backing of a major party.

If the Congress approves the bill, El Salvador will become the first country in the world to legalize BTC as a means of payment.






Andrey Shevchenko
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

BTC analysis for June 07,.2021 - Potential for the downside continuation towards $31.300

Technical Analysis



BTC has been trading sideways this morning at the price of $36.000.I still see potential for the downside movement.


Trading recommendation:
My advice is to watch for selling opportunities on the rallies with the downside targets at the price of $33.400 and $31.300.

Stochastic is showing neutral reading at the 50 level and the fresh downside cross would be another confirmation for the downside.

Additionally, bear flag pattern is in creation, which is good sign for further bear continuation.

Key resistance is set at $39.500





Petar Jacimovic
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Technical Analysis of ETH/USD for June 7, 2021

Crypto Industry News:
The UK's strict anti-money laundering laws seem to be a major stumbling block for crypto companies in the country.

According to the UK's Financial Conduct Authority (FCA), several crypto companies in the country may be getting ready to go out. In a statement released on Thursday, the regulatory agency revealed:

"A significant number of companies do not meet the required standards under money laundering laws. This has caused an unprecedented number of companies to withdraw their applications."

According to the report, 51 companies have so far failed to meet AML FCA standards and may be forced to stop operating in the country.

By withdrawing their license applications, crypto companies must stop all cryptocurrency services or risk fines and legal action from the FCA. Such companies may only resume operations after meeting FCA's AML protocols. Then they will be entered on the list of registered cryptocurrency companies.

As previously reported in the media, FCA expanded its temporary registration system for crypto companies from July 2021 to March 2022. This nine-month extension is expected to give FCA enough time to clear the backlog of pending license applications.

The FCA has 90 pending enrollment applications and only five duly registered UK crypto companies. Meanwhile, some of the 51 companies that have retired their licensing applications may not be covered by the FCA's AML rules, meaning their actions may not result in a forced closure.

Companies that fail to meet AML FCA requirements by the end of the enrollment period will also be forced to return all customer deposits.

In January 2020, the FCA became the AML police force for the UK cryptocurrency market, which marked the start of mandatory business registration for cryptocurrency companies in that country.


Technical Market Outlook:
The ETH/USD bounce has bounced from the level of $2,639, which is a local technical support for the price and might be developing a Triangle pattern around the current levels. As long as the price is still under the level of $2,914, the bears are still in full control of the market and the next target for bears is seen at the level of $1,729, $1,633 and $1,544. The nearest technical support is still seen at the level of $2,201.

Weekly Pivot Points:
WR3 - $3,628
WR2 - $3,236
WR1 - $2,995

Weekly Pivot - $2,426
WS1 - $2,383
WS2 - $2,000
WS3 - $1,765


Trading Recommendations:
Ethereum has lost more than 50% of the recent gains from the lows of March 2020 and now is currently in the counter-trend corrective cycle. The next long-term target for bears is seen at the level of $1,728 (61% Fibonacci retracement of the last wave up) and $1,420 ( January 2018 swing high). The up trend is resumed when the level of min. $3,000 is clearly violated.







Sebastian Seliga
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

Technical Analysis of BTC/USD for June 7, 2021

Crypto Industry News:
The end of the Bitcoin 2021 Conference definitely belonged to the President of El Salvador, who announced an action that is an unprecedented confirmation of the revolutionary nature of Bitcoin. Nayib Bukele announced via Zoom that he will be submitting a bill to recognize BTC as legal tender in parliament.

Bukele believes that central banks are increasingly taking measures that may adversely affect the economic stability of El Salvador. He also added that in the short term, the movement would create jobs and help ensure financial integration for thousands of people in the country. El Salvador's central bank will also accept bitcoin as part of its reserves, while citizens will be free to transact using cryptocurrency.

The Republic of El Salvador is a country in Central America that lies on the Pacific Ocean and borders with Guatemala and Honduras. El Salvador is the smallest in terms of area in the Central American Intermarium, but densely populated.

Bukele's speech was taped in advance and it was aired at the conference during a speech by Jack Mallers, founder of Strike, a cryptocurrency wallet built on the Lightning Network.


Technical Market Outlook:
Not much has changed over the weekend as the BTC/USD pair is still testing the lower short-term channel line around the level of $36,050. The momentum is still hovering around the neutral level of 50, but is not dropping lower yet. The market still trades under the supply zone located between the levels of $43,1459 - $41,794, so bears are still in full control of the market 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. The next target for bears is May 19th low seen at the level of $29,701.

Weekly Pivot Points:
WR3 - $43,458
WR2 - $41,521
WR1 - $38,273

Weekly Pivot - $36,222
WS1 - $33,131
WS2 - $30,800
WS3 - $27,577


Trading Recommendations:
Even 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]

Institutional investors cannot save Bitcoin



Institutional investors and traders are in no rush with new purchases of bitcoin. This, of course, does not mean that there are no buy deals at all now. Otherwise, bitcoin would continue to fall, and not stand in one place. However, the efforts of institutional investors are clearly not enough to create a Bitcoin shortage on cryptocurrency exchanges. After all, it is the shortage of coins available for purchase that makes sellers raise prices, which leads to an increase in the rate of the first cryptocurrency. According to the analytical service Santiment, "whales'' have added another 50,000 coins to their wallets over the past 10 days, but this did not provoke any growth in the value of bitcoin, as retail traders (of which there are many more) and miners continue to actively sell, not believing in the fact that in the near future, bitcoin is able to restore the "bullish" trend. It is also reported that the volume of open positions in bitcoin futures on the Chicago Mercantile Exchange fell to its lowest level since mid-December 2020 - $1.36 billion. The number of active positions has halved compared to mid-April, when bitcoin was at its maximum positions. Thus, the fundamental background, even of this nature, continues to indicate that it will be very difficult for Bitcoin to show serious growth in the near future. Institutions can buy as many coins as they want, but if the rest of the market is actively selling, the rate will not grow. Thus, we continue to expect a drop in bitcoin quotes in the medium term. The best way now to determine the possible direction of Bitcoin movement is through technical analysis. Of course, news from Elon Musk or the governments of China or the United States can come at any time. However, this information is more likely to create additional pressure on the first cryptocurrency than help it. Retail traders must believe again in Bitcoin's growth, but there is no reason for this right now.



Technically, bitcoin on the 4-hour timeframe continues to position itself between the two trend lines, even though they are already as close to each other as possible. Nevertheless, in the near future, a breakthrough of one of the trend lines may be carried out, which, in theory, can suggest in which direction to expect further movement of "digital gold". However, there is a rather subtle point here. Because if bitcoin continues to move frankly sideways, a breakout of any of the trend lines will not be considered a breakout and a signal to open trades. We advise you to be careful. So far, bitcoin is at the lower trend line, so there is a greater likelihood of going to the level of $30,500.





Paolo Greco
Analytical expert
InstaForex Group © 2007-2021

[IFX_Selena]

The calm before the storm. El Salvador wants to make Bitcoin a legal tender



Over the past weekend, bitcoin quotes were almost in absolute flat for the first time in a long time. This is very different for the first cryptocurrency. This gives the impression that a new powerful movement is being prepared, but in which direction? From our point of view, the fundamental background remains the same. It is still negative. Perhaps this is why neither retail traders nor large investors are in a hurry to buy bitcoin at a "very attractive rate", even though various crypto experts are trying to convince us. From our point of view, bitcoin will either continue to consolidate in the area of $32,000 - $42,000, within which a tangible rise in quotes is also possible, or it will resume its decline amid the loss of faith in a new rise in quotes. Thus, we do not expect the bullish trend to recover anyway. Recently, there was another news from Elon Musk, which is not at all surprising, since the Tesla CEO continues to comment on the "digital gold". Musk's game is completely incomprehensible, but it definitely has some kind of logic. After all, Musk cannot help but understand that his comments lead to strong changes in the rate of the first cryptocurrency. What good is it to him that bitcoin falls in price? Will he lower it as low as possible, so that he can then buy it in full? Or is everything much simpler and Tesla has already sold all its coins, so Musk doesn't care what bitcoin will be at now? Or has he already switched his attention to other cryptocurrencies like Dogecoin? Be that as it may, but Musk continues with all his might to lower the rate of the main cryptocurrency, and since he is not the only market participant, many other traders are already openly indignant at the behavior of the odious billionaire, whose actions lead to losses for much poorer people. We have already said that a group of hackers called Anonymous has declared war on Musk, which may also affect Tesla shares. In any case, all these events are unlikely to help bitcoin recover. Even the news that El Salvador can completely legalize bitcoin and make it the official currency of the country on a par with the US dollar, does not save bitcoin now. "In the short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy," said President Nayib Bukele. El Salvador's economy is reportedly 70 percent dependent on payments that Salvadorans send home from abroad. Thus, Bitcoin will be designed to simplify such transfers as much as possible and open up the world of financial services to Salvadorans, most of whom do not even have a bank account. More than 2 billion Salvadorans live abroad, but often send money home.



Technically, bitcoin's fuse continues to fade, and the cryptocurrency itself is trading very sluggishly. At this time, investors are in no hurry to buy bitcoins again, and miners get rid of the mined coins. The fundamental background remains unfavorable, so we believe that digital gold has more chances to return to the $30,500 level than to grow. If bitcoin quotes manage to gain a foothold above the 38.2% Fibonacci level - $41,000, this will slightly increase the likelihood of further growth in digital gold, but traders still need to get to this level.




Paolo Greco
Analytical expert
InstaForex Group © 2007-2021