Cryptocurrency Analysis

[IFX_Selena]

JPMorgan: current altcoins' rally may be sign of bubble

Due to the correction of bitcoin, altcoins failed to reach their highs in the second quarter of 2021. However, at the end of July, bulls returned to the crypto market pushing many cryptocurrencies to new highs. ADA, SOL, and ETH were the biggest gainers. Over the past month, the main altcoin has increased in price by 40%. The new stars of the market, Cardano and the coin of the Solana ecosystem skyrocketed by 110% and 287%, respectively. At the same time, judging by indicators, virtual assets are likely to maintain the bullish rally. JPMorgan experts are deeply concerned about this prolonged growth.

They argue that the rapid growth of altcoins is unjustified and leads to the formation of a bubble. Investors should be extremely careful and closely monitor the movements of the entire market, as well as specific altcoins. JPMorgan is confident that the resumption of upward movement of altcoins may undermine the stabilized crypto market, triggering a collapse. First of all, this is associated with an increased market value: the capitalization of altcoins is a third of the total market value. This indicates a rise in demand for altcoins.

Analysts see the main problem in the powerful breakthrough of Solana, which took seventh place in the top 10, as well as the active growth of ETH and ADA. Smaller altcoins also add gains, which indicates a full-fledged rally. The bank's experts believe that the reason for the current bullish sentiment is the excessive activity of the retail investors, which returned to the market after a bearish trend. Retails investors flew back to the crypto market after its recovery. Notably, the steady growth of virtual assets is not bolstered by fundamental factors. In fact, due to excessive demand, the crypto market is a little bit overheated, which may affect the current bullish trend. This is why JPMorgan warns about the likelihood of a steep decline, similar to one that occurred in the summer of 2021.



Despite the pessimistic forecast from JPMorgan experts, it is extremely difficult to associate the current growth of altcoins only with the activity of retail investors. The on-chain analysis of the main altcoins shows that it was institutional investors who pushed ETH as high as $4,000. Notably, not long ago, the 'London Hard Fork' took place, causing a powerful crypto rally and an influx of both retail and institution investors. Among all cryptocurrencies, the growth of ether is largely justified by fundamental factors. The same can be said about ADA and SOL. These coins are constantly developing, attracting new traders with their frequent updates and advantages of the network. When applying the on-chain analysis, the discrepancy and the lacks of fundamental factors become visible. The current activity does not correspond to the actual situation in the crypto market and the actual quotes of altcoins. However, in the case of ADA, developers are going to undertake a big update of Alonzo. SOL also announced a mysterious update, which has not yet had analogues.




Perhaps analysts were concerned about the increasing influence of altcoins on the overall market trend. Notably, they expressed similar concerns during the powerful pump of Doge and Shiba, which broke into the top ten and thirty, respectively, due to abnormal activity.

However, such a strong rally of cryptocurrencies may end with the resumption of upward movement for BTC. The coin is trying to break out of the July bear market. If it manages to break through the negative zone, a new cycle of BTC growth may start, which will undoubtedly affect the altcoin market. Bitcoin's dominance will grow along with the quotes, which will increase the pressure on the entire market, except for a few coins. Thus, JPMorgan's fears may be dispelled with the beginning of a bullish trend of BTC and the first correction of the altcoin market.






Artem Petrenko
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Ethereum hits $ 4,000




Ethereum traded higher than $ 4,000 last Friday, thanks to a month-long surge brought by the recent upgrade and increasing demand for non-fungible tokens (NFTs).

Specifically, it rose to $ 4,027 before cutting profits. And on Sunday it traded at $ 3,914, which was the rate hit last May. All in all the second largest cryptocurrency gained more than 50% since late July, and the recent upgrade early last month reduced supply growth.



Fundstrat said: "Since the upgrade of EIP-1559 a month ago, more than $ 180,000 of ETH (equivalent to more than $ 700 million at current market prices) has been burned, creating continued disinflationary pressure on Ethereum supply."

Ethereum also thrived thanks to continued interest in decentralized finance (DeFi) and NFTs. In particular, NFTs rose, with sales in the large OpenSea market growing more than 10 times in August.

Martha Reyes, head of research in Bequant, said the breakout lasted overnight, reaching the level seen last May. The trend cascaded to Cardano, Ripple and Polkadot.

As for Bitcoin, it was not faring well, but its recent movement was a success of its own since it broke above $ 50,000. It has been hovering around this area after spending more than a week below the round level.



Antoni Trenchev, co-founder of Nexo, said he expects Bitcoin to take another leap to $ 60,000 and test April highs. But to do this, the cryptocurrency should close above $ 50,000 and gain a foothold higher. Such will allay concerns that there is a double top and potential return to $ 30,000.





Andrey Shevchenko
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Technical Analysis of BTC/USD for September 6, 2021

Crypto Industry News:
A study by the Association of Forex Dealers (AFD) found that most Russians now prefer to invest in digital assets. The survey results clearly show that options such as fiat currencies and gold have fallen out of favor with Russian investors. Even people who have never traded cryptocurrencies before have admitted that they are now serious about buying them.

The survey was conducted from August 4 to August 24 on a sample of 502 respondents. Over 90% of them were men aged 25 to 44. The sentiment of the research participants towards cryptocurrencies turned out to be very positive. The vast majority believe that cryptocurrency prices will continue to rise. 8% of respondents said that digital assets will replace cash at some point.


Technical Market Outlook
The BTC/USD pair has made a new swing high at the level of $51,914 (at the time of writing the article), which means the 61% Fibonacci retracmeent of the whole down wave from $64,789 to $29,220 had been broken. The next target for bulls is seen at $59,506, but the market conditions remains extremely overbought. The nearest technical support is seen at $50,456, but the intraday support is seen at $51,457. The short-term outlook remains bullish and there is no up trend reversal indication on the higher time frame chart yet.

Weekly Pivot Points:
WR3 - $59,047
WR2 - $55,505
WR1 - $54,221

Weekly Pivot - $49,999
WS1 - $48,690
WS2 - $44,656
WS3 - $43,452


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 $59,506. 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 of InstaForex
© 2007-2021

[IFX_Selena]

Technical Analysis of ETH/USD for September 6, 2021

Crypto Industry News:
Ethereum co-founder Vitalik Buterin shared his thoughts on the potential collaboration between Dogecoin and Ethereum on Twitter. During the discussion panel he created on the popular portal, 268 people could ask questions.

Three Arrows Capital CEO Zhu Su asked: "What are the ideas for Ethereum / Doge collaboration? What was it about Doge that got you interested in the project? Su recently said he was "very stubborn" on Dogecoin, and that the meme cryptocurrency "has no risk of ever having any regulatory problems."

Referring to PoS and PoW, Buterin replied:

"Personally, I hope DOGE will switch to PoS soon, perhaps with the Ethereum code. I also hope they won't cancel their annual PoW issue for 5 billion a year, and instead put it in some DAO that finances global public goods."

In August, the Dogecoin Foundation resumed operations with Buterin as one of the board's advisers, along with Jared Birchall, a close associate of Tesla CEO Elon Musk, another prominent Doge supporter.

Among the many questions Buterin received as part of his Twitter experiment was whether he would create another cryptocurrency. The co-founder of Ethereum simply replied "No".


Technical Market Outlook
The ETH/USD pair has made a new swing high at the level of $4,029 and is currently consolidating the recent gains around this level. The next target for bulls is seen at $4,204, but the market conditions remains extremely overbought. The nearest technical support is seen at $3,842, but the intraday support is seen at $3,895. The short-term outlook remains bullish and there is no up trend reversal indication on the higher time frame chart yet.

Weekly Pivot Points:
WR3 - $5,271
WR2 - $4,663
WR1 - $4,404

Weekly Pivot - $3,750
WS1 - $3,518
WS2 - $2,851
WS3 - $2,607


Trading Outlook:
Ethereum have started the next wave up and violated the long-term target at the level of $3,550. 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 of InstaForex
© 2007-2021

[IFX_Selena]

El Salvador uses Bitcoin, miners' revenues rises, and JP Morgan warns of a correction. The leading cryptocurrency continues its growth.



Bitcoin continues its growth and so far, it is unclear what can stop it. The cryptocurrency continues to gain impulse and moves confidently towards its annual and absolute highs. It was already noted that that the recent fundamental background, if not absent, then at least very weak. This means that there is simply no news throughout last month from Elon Musk or Cathie Wood regarding Bitcoin. In addition, there is no news that one or another large bank has integrated bitcoin or other cryptocurrencies into its activities. There are also no reports that this or that large company has added the ability to pay with bitcoins for goods or services. Therefore, we still believe that Bitcoin's current growth is in some way accidental. Although, it seems that all the recent trends in BTC were somewhat random.

Meanwhile, Bitcoin will become the official means of payment tomorrow in El Salvador. In principle, such a decision by the authorities can be called an experiment, since, no one actually knows what this step will lead to. 75% of El Salvadorians are skeptical about this idea and oppose it. However, President Nayib Bukele believes that this law will attract foreign investors, which will have a beneficial effect on the country's economy. Moreover, Bitcoin can allow for cheaper and faster cross-border transfers. This is especially true for residents of the country, since many of them are working in other countries and, accordingly, often send money home. With the help of the leading cryptocurrency, it is much easier and cheaper to do this. However, it is still impossible to say at the moment that the country has all the necessary infrastructure for quickly obtaining bitcoin and converting it into the national currency.

On another note, Bitcoin miners' revenues are rising again. They amounted to $ 1.4 billion at the end of August. This is 40% more than in the month of July. However, this growth is due to the fact that Bitcoin's price has significantly increased over the past month, and not because there is more mining.

At the same time, we were not the only ones who began to be interested in the reasons and validity of the current growth of bitcoin. JPMorgan analysts also warn their clients that the market is overheated and a correction phase may soon begin. The bank's analysts warn that the share of altcoins in the cryptocurrency market has already increased to 33% – approximately the same value was observed in May, when the collapse occurred. However, other experts believe that the altcoin season has just started (or resumed) on the crypto market. It can be recalled that this is the name of the phenomenon in which various alternative cryptocurrencies come to the fore for investors, rather than traditional digital assets, which are already very expensive and have much less growth potential than yet untapped coins.





Paolo Greco
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Elliott wave analysis of Ripple for September 6, 2021



Ripple has consolidated the rally from 0.5198 to 1.3499 during the last 4 weeks and is now ready to break out from this consolidation towards the upside for the next part for the rally towards at least 1.8854 and possibly even higher towards 2.4000 if the next rally extends. If the greed takes overhand as we see from time to time within the Crypto complex, we could see an even stronger rally towards 3.2000, but let's take it in baby steps and see what happens once resistance at 1.3499 gives away and the next rally towards at least 1.8854 gets ignited.




Torben Melsted
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

XRPUSD could test $1.60-$1.70 this week.

XRPUSD is in a bullish trend. Price is making higher highs and higher lows. Price so far has respected key support trend lines and has formed a bullish cup pattern that will be activated if price breaks above $1.35.



Black line - support trend line

Red line -cup pattern

Blue line -resistance

XRPUSD if it breaks above the blue resistance line, we should then expect an advance equal to the height of the cup pattern. This could bring price towards $1.60-$1.70 area. The form of the rise from $0.50 looks impulsive and not corrective as it did during the decline from $1.97. This increases the chances that this new upward move will eventually break above $2 and most probably test its all time highs. XRPUSD has support at $1.10. Any pull back towards that level will be considered a buying opportunity. However if price breaks below the black trend line we should expect a deeper pull back towards $0.80 at least.





Alexandros Yfantis
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

There is no news, but Bitcoin cannot be stopped!



Bitcoin, which broke the ascending trend line a few days ago, calmly resumed the upward trend that began about a month and a half ago without any apparent fundamental reasons. Recall that we believe that the main reason for the last round of cryptocurrency growth is the rush of many investors to buy bitcoin in full until the new legislation is adopted in the States, according to which most of the transactions will "pass" through the Tax Administration. Thus, from this point of view, the growth is quite logical, although it was really difficult to predict it. However, the problem now is something else. It is unclear how much longer the growth of the main cryptocurrency will continue? The quotes of the "bitcoin" managed to stay above the level of $ 46,600. However, bitcoin can't grow back to its absolute highs in just a couple of months, without even having good fundamental reasons for this. One way or another, but it is stupid to deny now that the upward trend persists. At the moment, we can only conclude that it has weakened a little, but it has not ended. In the illustration below, we have plotted a new ascending channel and if the price is fixed below it, then we can again count on a powerful drop in the cryptocurrency.

Meanwhile, more experts are inclined to believe that by the end of the year, bitcoin can reach the level of $ 73-75 thousand per coin. However, we would like to remind you that when bitcoin was trading at $ 30-33 thousand per coin, many experts and analysts also said that now the exchange rate is at least $ 24,000. Instead, almost out of the blue, bitcoin rose to $ 50,000. Thus, we remind you that any expectations, assumptions, and hypotheses must be confirmed by specific technical signals. At this time, we continue to expect a fall in BTC, but we need to wait for a new sell signal in the form of consolidation below the ascending channel.

Meanwhile, ECB President Christine Lagarde said that any cryptocurrencies and stablecoins cannot be recognized as currencies and are speculative assets. According to the ECB president, all stablecoins are not currency equivalents, they are just tied to them. However, many stablecoins are not fully backed by real fiat money. For example, it recently became known that the issuer of Tether indicated in a report that the share of funds and bank deposits that can be withdrawn in two or fewer days is only 10%. Thus, formally, it is very difficult to call any stablecoins stable and secured.



In technical terms, bitcoin continues to be in an upward trend on the 4-hour timeframe. Bitcoin has not managed to gain a foothold below the Ichimoku cloud, but there is already a new benchmark – an ascending channel. The departure of the "bitcoin" quotes below will indicate the possible beginning of a new downward trend, which we have been expecting for a long time. At the same time, overcoming the level of $ 51,350 can provoke an even greater growth of bitcoin, up to its annual highs. We recommend selling cryptocurrencies after fixing below $ 46,600.





Paolo Greco
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Bitcoin: Crypto bulls have 3-6 months before upside rally ends

Bitcoin's attempt to take the level of $50,000 per coin has not yet been successful. However, the market has not yet closed, and the weekend is ahead - days when, according to observations, breakouts happen.

Against this background, the previous forecast about the two scenarios does not lose relevance. Either BTC/USD will come out of the sideways upward, consolidating above the psychological level of $50,000, or it will go down in the sideways downward.

In the first case, the nearest target will be the zone of 52,000.18 - 52,929.55, and after its passage, it will be possible to talk about growth to a historical maximum. But if BTC/USD turns around in the sideways 46,299,48 - 50,513,53 down, consolidation before the next impulse may be delayed.

While we are waiting for clarification on this issue, let's see what influencers think about the future of Bitcoin and the bull market of cryptocurrencies.

For example, Lark Davis, a long-term bitcoin investor, notes that the bullish euphoria is likely to end in a few months. But the next bearish stage in the market will be less severe.

Davis believes the bitcoin bulls have three to six months left before the upside rally ends. He draws such conclusions based on previous observations and the growing maturity of the cryptocurrency markets.

The investor notes that as markets become more mature and resilient to manipulation, cycles lengthen and returns become less and less impressive. Against this backdrop, bearish periods and phases of accumulation are also shrinking. As more and more money flows from traditional to digital, the next bearish phase will be different from the 2018 crypto winter.

Meanwhile, Euro Pacific Capital CEO and gold aficionado Peter Schiff criticized Bitcoin for losing market share.

It's worth noting that at the end of December 2020, Lunarcrush announced Schiff as the second-largest Bitcoin influencer.

On his Twitter, Schiff wrote that the flagship cryptocurrency is losing dominance, as it has to compete for market share with almost 12,000 other cryptocurrencies.

Therefore, Schiff believes that the supply of altcoins will ultimately surpass any current demand.

In another tweet, the investor admitted that Bitcoin has been beating gold for the past 10 years. Not only gold, but bitcoin has surpassed all other traditional asset classes in the same period. But that doesn't prove that BTC is better than gold, stocks, real estate, or any other asset that it has outperformed in profitability.

Bitcoin is really growing less now than ether, but it is unlikely that the second cryptocurrency will be able to outshine it in the near future. As for other altcoins, JP warned investors that their rally is now making the market more dangerous and foamy.






Ekaterina Kiseleva
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Technical Analysis of ETH/USD for September 3, 2021

Crypto Industry News:
SEC president Gary Gensler calls for cooperation between Europe and the United States in the effort to regulate decentralized financial technologies.

Speaking to the Parliamentary Committee on Economic and Monetary Affairs on September 1, Gensler stressed the role that financial technologies play in globalizing economic flows and weakening isolated national markets:

"I think the transformation we are going through now could be as big as the internet in the 90s."

Valued at $ 2.1 trillion, Gensler stressed that cryptocurrency markets are a "truly global" asset class, adding: "It has no limits or restrictions. It works 24 hours a day, 7 days a week. "

The chairman of the SEC stressed the need to develop a strong public policy framework to balance the promotion of innovation in digital assets and decentralized finance with strong investor protection.

Gensler stressed that DeFi platforms "provide direct access to millions of investors" without the presence of a public-protocol broker, but pointed out that there was a high risk involved. He said DeFi and cryptocurrencies "abound with fraud and abuse." He also pointed out that in the absence of "clear investor protection obligations on these platforms", investors become extremely vulnerable to the above.

The head of the SEC also highlighted concerns about stablecoins, estimating that nearly three-quarters of the cryptocurrency trading volume is made up of pairs in which stablecoins are involved.


Technical Market Outlook
The ETH/USD pair has made a new swing high at the level of $3,843 and is currently consolidating the recent gains around this level. The next target for bulls is seen at $4,000 and $4,204, but the market conditions remains overbought. The nearest technical support is seen at $3,596, but the intraday support is seen at $3,708. The short-term outlook remains bullish with a typical pull-back here and there along the way up.

Weekly Pivot Points:
WR3 - $3,712
WR2 - $3,560
WR1 - $3,379

Weekly Pivot - $3,218
WS1 - $3,063
WS2 - $2,891
WS3 - $2,721


Trading Outlook:
Ethereum have started the next wave up and violated the long-term target at the level of $3,550,. 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 of InstaForex
© 2007-2021