Cryptocurrency Analysis

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Bitcoin starts a downward movement. Local correction or trend reversal?

Bitcoin bulls have enjoyed the upward move from $37,190 to $46,690 but now price has broken out of the bullish short-term channel. Price is vulnerable to a move lower towards $43,000.



Red lines - bullish channel

Green lines - Fibonacci retracements

Bitcoin has most probably completed the upward move from $37,000 to $47,000. Price is expected to move lower and most probably towards the 61.8% Fibonacci retracement at $40,780 if support at $43,000 is broken. Bulls want to see price form a higher low in order to gain momentum for the next leg up. On the other hand bears want to see price start making lower lows and lower highs and eventually break below $29,000 which is the most important support level.






Alexandros Yfantis
Analytical expert
InstaFintech Group © 2007-2021

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BTC analysis for August 12,.2021 - Breakout of hte rising wedge and potential for drop towards $42.750

Technical analysis:



BTC has been trading downside and there is the breakout of the inside day formation, which is good confirmation for the downside movement.


Trading recommendation:
The main cause for the recent drop on BTC is breakout of the rising wedge pattern in the background.

Watch for selling opportunities on the rallies with the downside target at the price of $42,750.

Stochastic oscillator is showing bear cross and no extreme condition, which is good sign for further downside moment.

Key resistance is set at the price of $47,000





Petar Jacimovic
Analytical expert
InstaFintech Group © 2007-2021

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Crypto money is flowing out of funds

Bitcoin continues to experience difficulties with a breakout of a powerful resistance level, on which its further direction depends. If we do not manage to get above $46,700 in the near future, we can forget about consolidating above the 200-day moving average and the continuation of the bull market. Everyone will start rushing headlong from it, which will again lead to panic and a mobile sale of bitcoin. But we'll talk about this a little later.

Now about the current topic - bitcoin ETF, which can become almost the main driver of the cryptocurrency market growth, at least, I would like to believe it. Recently, the chairman of the US Securities and Exchange Commission, Gary Gensler, inspired a wave of optimism in the cryptocurrency community but did not fully clarify anything. But the more the epic with the approval of the bitcoin ETF drags on, the more the funds that were specially created for this suffer. According to the latest data from CoinShares, investments in digital assets from Grayscale, Bitwise, 21Shares, and other companies have been showing outflows for the fifth consecutive week. During this time, about $93 million was withdrawn from the funds. Tired of waiting, the money goes away. The appetite for cooling contrasts with the growing pile of applications for cryptocurrency ETFs, at least 18 applications that have been received by the SEC are currently known. That number rose significantly in three weeks after Gensler said regulators could be more open to bitcoin ETFs if it is based on futures rather than cryptocurrency itself. However, experts point out that even if the SEC finally approves the structure of the fund, one cannot be sure that the Bitcoin ETF will be in great demand.



Currently, there are quite a few other ways in which investors can buy and store bitcoin and other cryptocurrencies, at least in the US, but all of them are already under the "cap" of the tax authorities - thanks to the recent $550 billion bill, which is a kind of deterrent for new cryptocurrency fans. Just recently, the US Senate passed the infrastructure bill, which will allow for broad oversight of virtual currencies and wallet owners. It was not possible to make the necessary amendments to the raw draft bill related to cryptocurrencies. The only hope is for changes that may be adopted in September. This makes it possible to exclude miners, crypto-software developers, and similar community members from the list of taxpayers.

Bitcoin funds and futures have been outflowing for the third month in the longest streak, according to Bloomberg Intelligence. Much of this decline is due to a decrease in open interest in bitcoin futures. According to experts, the outflow could have been even greater if it were not for the fact that the 30 billion bitcoin trust - the largest crypto fund - does not allow the repurchase of shares.

A bit of cryptocurrency exoticism

The Iranian authorities decided to make a knight's move. Today, the Iranian National Tax Administration (INTA) has decided to follow the path of the United States and put forward a proposal to tax the digital asset exchanges operating in the country. To do this, it is necessary to legalize their activities, which is what the tax office calls for. Now the Iranian tax agency also wants to get user data on authorized exchanges. After looking at how the tax changes were cleverly implemented in the United States, the Iranian authorities also saw an opportunity to use exchange operations as a basis for taxation. INTA has called on Tehran's regulators to legalize cryptocurrency trading platforms. The statement says that the legalization of crypto exchanges is necessary for the collection of tax, and for this, everything must be legally fixed.



As for the technical picture of bitcoin, buyers need to break above the resistance of $46,700. Only this will allow them to gain the upper hand over the 200-day moving average and continue the growth of bitcoin to the highs of $52,000 and $58,000. If the bulls fail to take the above level, a repeat instant sale to the levels of $41,100, $36,700, and $33,300 is possible. But do not underestimate the cunning of the market. There were similar attempts to return the bull market in January-February 2018, after the largest bitcoin sell-off, and all these "bull markets" were engaged only in dragging out new "onlookers" who wanted to make some quick money, after which the largest drains took place. History will likely repeat itself this time as well, as everything points to just that.





Jakub Novak
Analytical expert
InstaFintech Group © 2007-2021

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Era of cryptocurrencies



There is an irony in the rise of bitcoins and other cryptocurrencies. Although they were supposed to usher in a new paradigm of finance, removing the need to trust centralized institutions, it is through such institutions that people can make transactions on them. And hardly a week goes by without news that a financial intermediary, be it well-known or not, is delving into a largely unregulated space in an effort to capitalize on speculative fervor.

Of course, there is nothing wrong with an entrepreneurial drive to give people what they want, even if it will somehow throw away their savings. However, some remedies are urgently needed to protect the inexperienced and the economy as a whole from the consequences.

Crypto was meant to make governments and banks obsolete. In their place, software protocols will issue money in the form of digital tokens, and a voluntary network of computers will maintain a public registry that allows people to transact directly using cryptographic keys to demonstrate ownership. However, this brave new world has its challenges. Security is an ongoing concern, as illustrated by the $ 600 million PolyNetwork protocol hack this week. If you send tokens to the wrong address, or if your keys are lost or stolen, you have no support service. Sharp price fluctuations also make cryptocurrencies like Bitcoin largely useless to save or buy, except for illegal ones. The computing power needed to support the blockchain, in addition to accelerating climate change, also makes transactions slow and expensive, especially for small amounts.



Surprisingly, none of these shortcomings dampened enthusiasm for cryptocurrency. On the contrary, they provided opportunities for financial intermediaries. For traders, digital tokens are the main speculative vehicle - "assets" created out of thin air, not tied to any cash flows or commodities. For institutional investors like funds and pension funds, they are a way to potentially make a goose profit. For exchanges, banks and many other organizations, simply helping people buy and sell can lead to excessive commissions and attract new customers. For traditionally conservative custodians specializing in cryptocurrency storage, difficulties with cryptocurrency storage open up a new line of business.

There are plenty of examples, from beginners to established firms. Director Spike Lee, for instance, is touting ATM machines that, for a substantial fee, they will turn "systematically repressive" dollars into "positive, inclusive" Bitcoin. Payment services such as PayPal and Cash App also became providers for retail customers, receiving commissions from both sides of the trade. Fidelity is also one of several firms seeking regulatory approval for a publicly traded fund that will allow retail investors to trade bitcoin as stock. As for others such as JPMorgan, Morgan Stanley and Goldman Sachs, they are reportedly offering or planning to offer cryptocurrency investments to wealthy clients, since a recent poll said more than half of institutional investors admitted that they own digital assets. Bank of New York Mellon and State Street are also expanding into the market, alongside smaller crypto specialists.

Such services can be less cumbersome and costly than using blockchain, not to mention can reduce risks for people who choose to speculate in cryptocurrencies. But they overlap with the regulatory world, as neither the Securities and Exchange Commission nor the Commodity Futures Trading Commission have the authority to control cryptocurrency. As a result, dealing with an institutionalized cryptocurrency often requires much more trust than the traditional financial services that cryptocurrency had to supplant.

But if approved by the SEC, crypto trading will be as easy and cheap as investing in stocks. However, in order to access coins and determine the prices of their shares, people must rely on specialized crypto exchanges like Coinbase and Kraken, which are not within the purview of the SEC. This means that the platforms do not face security and reliability requirements, conflicts of interest and many others that securities transactions must comply with. Little else but a reputation prevents them from manipulating prices or otherwise exploiting customers.

PayPal is another example. When its customers buy bitcoins, they do not receive any tokens. Instead, their balance reflects their stake in a PayPal account on a cryptocurrency exchange operated by a limited-purpose trust company called Paxos. The NYS Department of Financial Services has registered Paxos and sets some regulatory standards, but it is unclear what these are, let alone how effective they will be. It also did not require the company to publicly disclose its assets or even capital, liquidity, and other special requirements that it must meet.

Similar services may soon be available at other public banks. White-label trading will allow people to buy, sell and store cryptocurrency through mobile apps or bank websites across the country, helping the latter stifle the flow of customer funds to services such as Coinbase. Behind the scenes, clients will actually be doing business with another small group of specialized trust companies established by the NYDFS, which will not be eligible for federally-backed deposit insurance and will not be controlled by any federal banking regulator. Such companies are also behind many of the crypto investment tools offered to the wealthy.

The more money flows into this gray area, the higher the systemic risks. For example, an attempted exodus from bitcoin has overwhelmed cryptocurrency exchanges, making trading impossible. Investment funds may have to sell other assets in order to pay off - a dynamic that could destabilize markets, especially when leverage is involved. Another example is if Paxos encounters a problem on the cryptocurrency balance at PayPal. The rush to withdraw money can harm such payment services, which, by the way, do not have banking regulation or direct FDIC insurance. Since banks offer similar trading services, they can be harmed more broadly in the event of a disruption.

Current and former regulators, including SEC Chairman Gary Gensler, are well aware of the dangers in this market. Ideally, the Congress will provide the SEC or CFTC with clear authority over cryptocurrencies, as well as the resources needed to implement them. This would allow them to make demands on exchanges and custodians commensurate with the risks.

If Congress is inactive, regulators can still make progress. As noted by Gensler, the SEC could expand its powers by designating digital tokens as securities where needed. It can also use its authority to approve ETFs, but only if they interact with regulated exchanges like the SEC. This will put pressure on the respective exchanges.

Banking supervisors also have a role to play. First, they may require that any stocks of volatile cryptocurrencies be fully funded with loss-absorbing capital, as suggested by the Bank for International Settlements. In addition, to eliminate the risks associated with white label services, they can issue a warning: if suppliers do not comply with certain standards of security, reliability and information disclosure, assets will be treated as if they were on the balance sheets of banks, with all the attendant needs for capital. Banking supervisors may also take a closer look at PayPal and Cash App, which increasingly offer banking services but are not regulated accordingly.

Despite all the irrational abundance they inspire, digital assets and blockchains still have valuable applications, not to mention they can help transform finance in the desired way. But if people want to realize this potential without causing unnecessary damage, some new regulation is needed.





Andrey Shevchenko
Analytical expert
InstaFintech Group © 2007-2021

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Technical Analysis of ETH/USD for August 12, 2021

Crypto Industry News:
The theoretical deflation properties of the Ethereum update in London last week were already visible in action on the blockchain, with nearly 800 "deflation blocks" produced.

The jump in the rate of burning of the Ethereum transaction fee caused the supply to turn into deflation for at least two hours. Over the past few days, the network has come under heavy load, which has resulted in the combustion of much more gas.

Burn Bot recorded a case of burning 545 ETH in one hour. With Ethereum emissions reported at 532 ETH per hour, it caused asset deflation by minus 13 ETH in this short period.

When the amount of ETH burned is greater than the mining reward, deflation blocks are produced and the supply temporarily drops. This was seen on the tracker by Carbono, which now reports that there have been 791 deflation blocks so far, defining them as blocks where the burnt fee has exceeded the extracted ETH.

When the London hard fork was implemented, it introduced the highly anticipated Ethereum Improvement Proposal (EIP) 1559 update that adjusted the transaction fee calculation system. Part of this adjustment has been introduced by a mechanism that incinerates part of the base charges levied.

The Ethereum economy is not expected to see sustained deflation until the burning of fees is combined with a reduction in block reward emissions.

However, this news is not good for Ethereum users as gas prices have risen again. According to BitInfoCharts, the average transaction price rose to $ 20 from a low of around $ 4 at the end of July. Etherscan is reporting a whopping $ 28.60 to exchange tokens for Uniswap.


Technical Market Outlook:
The ETH/USD pair has made a new higher high at the level of $3,274 (at the time of writing the article), but the move up is overstretched and the market conditions are extremely overbought. The next target for bulls is seen at the level of $3,498 and $3,552, but traders should expect some kind of pull-back first. The immediate technical support is seen at the level of $3,122 and $3,000. Strong and positive momentum supports the short-term bullish outlook for ETH, but it looks like the market should do the correction first.

Weekly Pivot Points:
WR3 - $4,076
WR2 - $3,643
WR1 - $3,334

Weekly Pivot - $2,889
WS1 - $2,597
WS2 - $2,147
WS3 - $1,835


Trading Outlook:
Ethereum have started the next wave up and violated the long-term target at the level of $3,000. The next long-term target for ETH is seen at the level of $4,394. Nevertheless, in order to continue the long-term up trend, the price can not break below the technical support at the level of $2,695. The level of $1,728 (61% Fibonacci retracement of the last big impulsive wave up) is still the key long-term technical support for bulls.







Sebastian Seliga
Analytical expert
InstaFintech Group © 2007-2021

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Technical Analysis of BTC/USD for August 12, 2021

Crypto Industry News:
The cryptocurrency exchange BitMEX has agreed to pay up to $ 100 million to resolve the case with the United States Commodity Futures Trading Commission (CFTC) and the Financial Crimes Enforcement Network (FinCEN).

As part of the settlement, BitMEX will pay a civil penalty of $ 100 million "for illegal operation of the cryptocurrency trading platform and anti-money laundering violations." In addition, the company will need to hire an independent consultant to perform a backlog of its transactions to determine if it has failed to properly report suspicious activity.

"This case reinforces the expectation that the digital asset industry, as it continues to affect a wider pool of market participants, is taking its responsibilities in the regulated financial industry seriously and its responsibilities to develop and adhere to a culture of compliance," said CFTC CEO Rostin Behnam. "The CFTC will take immediate action when events in its jurisdiction raise concerns related to the protection of customers and consumers."

While the CFTC communique mentioned that the settlement resulted from a case against former CEO Arthur Hayes and other company executives, they are likely to face allegations of a breach of banking secrecy law. According to a spokesman for BitMEX co-founders, Hayes, Ben Delo and Sam Reed were not parties to the CFTC and FinCEN settlement.


Technical Market Outlook:
The BTC/USD pair has hit the 50% Fibonacci retracement located at $46,994 and is having trouble to continue the rally even higher. In a case of a breakout, the next target is seen at the level of $51,189, which is the 61% Fibonacci retracement level. The nearest technical support is located at $43,159 level, but the intraday technical support is seen at $44,555. Please notice the declining momentum and negative divergence at the H4 time frame chart support the short-term bearish outlook.

Weekly Pivot Points:
WR3 - $55,418
WR2 - $50,074
WR1 - $47,529

Weekly Pivot - $42,313
WS1 - $39,834
WS2 - $34,360
WS3 - $31,560


Trading Outlook:
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. The next mid-term target is seen at the level of $47,000. 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
InstaFintech Group © 2007-2021

[IFX_Selena]

Bitcoin continues to grow, but it is likely to crash down at any moment



Bitcoin has grown by $16,000 over the past few weeks. Such a movement no longer falls under the definition of "ordinary". It is true that the cryptocurrency is quite capable of passing 5-6 thousand dollars in one direction in one day. However, we are now talking about $16,000, which is about 50% of the total drop in the cryptocurrency in April and May of this year. Thus, there must be some reasons for such a strong movement. However, there were simply no fundamental reasons for such a strong growth. Everyone has already forgotten that China repressed all miners from its territory, and banned all companies from providing any services related to cryptocurrencies. The question of how and to what extent the American legislation regarding the sphere of cryptocurrencies will be tightened is also being resolved now. It can be recalled that a new bill is currently being discussed in the US Congress, which will have to give a clear definition of the concept of "broker", as well as determine which participants of the cryptocurrency market fall under the reporting in the Tax Administration and will be required to pay taxes on their transactions. For bitcoin, this news is obviously not positive. Nevertheless, the strong growth of the first cryptocurrency has been observed in the last two weeks. Based on this, we think about whether this is not a reaction of the market to possible actions of the US government in the future.

Simply put, if the new legislation is introduced, it will be much less profitable to buy bitcoin, because almost all participants in the cryptocurrency market will either fall under the sights of the Tax Administration, or they will immediately be forced to pay taxes. Thus, the demand for bitcoin may significantly decrease. Therefore, it should be bought now, while the new legislation has not yet been approved and has not entered into force! This is just a guess. Nevertheless, it is a fairly true assumption. Then an absolutely reasonable question arises: to what level can a cryptocurrency reach in this absolutely unreasonable course? From our point of view, bitcoin has already "exceeded the plan". It can try to work out the level of $47,200, which is 50.0% Fibonacci. But this mark looks just like the maximum possible target for bitcoin at this time.



Technically, bitcoin continues to be in an upward movement on the daily timeframe and has worked out the resistance level of $46,056. The next nearest target for an upward movement is the level of $47,200. We believe that from the current positions, "digital gold" can go back to the level of $29,700. However, without appropriate technical signals about the end of the upward trend, it is recommended to avoid selling bitcoin.





Paolo Greco
Analytical expert
InstaFintech Group © 2007-2021

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Technical analysis of Ripple for August 12, 2021



Ripple is ready for a major rally in the weeks/months ahead. All that is need is to break above the trendline resistance from April near 1.0240. If when this trendline finally gives away, we have a positive signal from the Ichimoku indicator and the accumulation cylinder calls for a rally to 3.43 is the next leg higher.

The digital assest could be entering a period of consolidation in the 0.9254 - 1.0919 before the next strong rally higher towards 3.4300





Torben Melsted
Analytical expert
InstaFintech Group © 2007-2021

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Ethereum may help bitcoin break $100,000 milestone



If the number one cryptocurrency in its performance and functionality was on a par with ethereum, then this year bitcoin would be trading for $100,000. This was told by Mike Maglone, senior commodity strategist at Bloomberg.

"Ethereum was more dominant than bitcoin and beat the number one cryptocurrency on all fronts. If we consider the market indicators from the beginning of the year to this month, the main altcoin grew by more than 320%, and the yield of bitcoin was only 54%," he said. However, Maglone is confident that bitcoin will soon be on an equal footing with ethereum in terms of profitability, which can be a catalyst for the growth of bitcoin up to $100,000. Maglone did not delve into the various factors that could be a catalyst for the growth of bitcoin.

Earlier, in their reports on cryptocurrencies, some growth factors were indicated that could stimulate the growth of bitcoin up to $100,000. The reports noted that crypto enthusiasts and bitcoin supporters believe that bitcoin can be competitive with the US dollar and become a global reserve asset.

This can be said because the fixed supply side of digital gold makes the cryptocurrency much more reliable than the dollar. In 2020, the Federal Reserve was able to print about $3 trillion. As a result, last year bitcoin closed its position 260% higher, which suggests that bitcoin is the main protective asset against inflation and the depletion of the dollar for investors.

However, the dominance of bitcoin has fallen sharply since December 2020, at that time it reached 73%, now it is about 47% - this may indicate that traders have shifted their gaze to other altcoins, in particular to the main altcoin. Ethereum has become a sponsor of a major drop in the dominance of bitcoin.

Now the dominance of Ether is 20%. This was facilitated by the increase in the number of NFT tokens, they are authentic digital files. Ethereum developers are constantly working on scaling the blockchain. The other day, ethereum received a new software.

At the moment, ethereum is colossally superior to bitcoin in terms of network transactions and commissions for them. Many analysts are confident that ethereum can throw bitcoin off the throne and surpass it in market capitalization by 2023. However, bitcoin itself will cost $100,000, and ethereum will cross this threshold and will cost even more.





Vitaly Kolesnikov
Analytical expert
InstaFintech Group © 2007-2021

[IFX_Selena]

Ripple - where it can find resistance again

Ripple has risen to as high as 0.9794 today. The bias is still bullish after jumping by over 15% in today's session. The cryptocurrency has increased along with the bitcoin price.

XRP/USD has broken out strong and important resistance levels. Most likely, it will approach and reach the 1.0 psychological level soon. It remains to see how it will react around this level. Breaking above it and consolidating could signal further growth ahead.


XRP/USD AMAZING RALLY


Ripple ignored the ascending pitchfork's upper median line (uml) and the weekly R2 (0.9188) level. Technically, it was somehow expected to increase after escaping from the down channel pattern.

The weekly R3 (0.9962) is seen as the first upside target. The 1.0 psychological level and the first warning line (wl1) represent important obstacles and targets as well. Personally, I would like to see a temporary decline to retest the broken levels.

We cannot exclude a potential decline after the current amazing rally. A potential consolidation here could signal further growth towards 1.1 psychological level, a higher high.


OUTLOOK
Ripple is bullish, so further growth is natural and somehow expected. Only consolidation or a minor retreat could help us to identify a new great long opportunity. It's risky to buy it here even if the price resumes its growth, as XRP/USD could slip lower after the current rally.





Ralph Shedler
Analytical expert
InstaFintech Group © 2007-2021