Cryptocurrency Analysis

[IFX_Selena]

Bitcoin's price is bound to increase, albeit being a "bubble"



Bitcoin continues to try its best to stay above the level of $ 43,852. The continuation of growth is out of the question now since it looks like the next round of the bullish trend is already done. Therefore, its quotes may rush to the next support level of $ 40,746 in the near future. From our point of view, such a decline will be very logical. We still don't see any good reasons why BTC has increased by $ 20,000 during the past two months, and we also expected the growth to end around the levels of $ 43-44,000 per coin. However, the exchange rate actually rose to $ 53,000, that is, it stopped not so far from its absolute highs. Now, the correction is overdue, and there are no reasons to resume growth.

Meanwhile, billionaire Leon Kuperman urged everyone to be very careful with their Bitcoin investments. He said in an interview that he does not understand the principle of operation of cryptocurrencies, so he stays away from them, and considers gold to be the best means of preserving value. On the contrary, another gold supporter Peter Schiff, said that the rate of the main cryptocurrency could rise up to $ 100,000 and regrets that he did not Buy bitcoin in 2011. The businessman still believes that bitcoin is a "bubble", but at the same time, admits that its value can soar to $1 million. According to Peter Schiff, cryptocurrency will never become a ubiquitous means of payment, and the only sphere for its application is speculation.

Mike McGlone, Bloomberg senior strategist, also gives a favorable forecast. He reiterated that Bitcoin will rise to $ 100,000 per coin and become a global reserve asset. McGlone also said that the "bullish" market for bitcoin has already recovered, so the highs are expected to be updated.

In addition, it is reported that large investors are not currently working on a decline. This is reported by several analytical portals, as well as exchanges. However, the sentiment may change, given how high bitcoin has increased again, and the fact that there are no good reasons for its continued growth.

It can be recalled that most of the forecasts from the category "$ 100,000 by the end of the year" are being considered. No one denies that Bitcoin's price can rise and will most likely do so in the long term. However, two different "bullish" trends in one year is too much. Moreover, there was more negative news for bitcoin than positive this year. In particular, the repression of miners in China and the serious tightening of the legislation on the regulation of BTC in some countries. Moreover, the Fed may significantly reduce or completely cancel the QE program next year, which is the main source of money that flows to the cryptocurrency market. Therefore, in the perspective of the next 1-2 years, we believe that a corrective scenario is most likely.

Technically, there is a clear downward trend in the four-hour time frame. Bitcoin's quotes went below the Ichimoku cloud, the critical line, the ascending channel and the level of $ 46,600. The collapse of quotes on September 7 may be the beginning of a new prolonged declinel. Therefore, the rate is expected to consolidate below the level of $ 43,852 and decline to $ 40,746 in the upcoming days. But if buyers manage to hold Bitcoin above the level of $ 46,600, then the upward trend may continue.





Paolo Greco
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Technical Analysis of BTC/USD for September 13, 2021

Crypto Industry news:
The establishment of BTC as the official tender in El Salvador is a historic event that is likely to lead to similar decisions by other governments.

While it will certainly not be as fast as in El Salvador, surveys are already being carried out to find out what people think about whether Bitcoin should be considered a national currency.

Wyoming and Texas are introducing regulations that will allow you to pay real estate taxes when using BTC. At the same time, a survey conducted by YouGov showed that 28% of Americans declare that they are firm against the adoption of BTC as a means of payment in the US. 4,912 people were asked questions related to BTC. Out of all respondents, only about 11% consider the introduction of BTC a great idea, and another 16% see the benefits of such a solution. More than 1/3 of respondents do not know if BTC recognition would be beneficial. As you can imagine, in most cases younger people were for the introduction, and older people were against the idea.

Greater enthusiasm for the oldest cryptocurrency can be seen in Brazil. Sherlock Communications conducted a survey which showed that as many as 48% of residents support BTC in the country as a means of payment. Even more respondents (56%) support El Salvador's decision.

While not all Brazilians are in favor of adopting BTC, the vast majority of those polled not only want the introduction or admit that it could bring many benefits, but also predict that more and more people will be using BTC in the near future. The extreme scenario, which in this case marks the end of the entire cryptocurrency market in Brazil, is predicted by only 4% of respondents.


Technical Market Outlook
The BTC/USD pair has failed to rally above the level of $46,317, so the road towards $50k is still closed after the Bearish Engulfing candlestick pattern was made again. The bears have control over the market and are pushing the price lower towards the lows of September 7th located at $43,159. Any violation of this level would be a bearish signal. The nearest technical support is seen at the level of $44,219.

Weekly Pivot Points:
WR3 - $59,391
WR2 - $56,198
WR1 - $49,661

Weekly Pivot - $46,351
WS1 - $40,043
WS2 - $36,782
WS3 - $30,164


Trading Outlook:
According to the long-term charts 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]

Bitcoin is a bubble which is set to swell



Bitcoin plummeted last week and has not been able to recoup losses since then. Meanwhile, everything looks like an ordinary technical correction. Once it is complete, the flagship cryptocurrency is widely expected to resume its climb. Let me underscore two points. First, the price has fixed below support of $46,600 and has not been able to rebound above it. Second, the price has fixed below the upward channel. Thus, from my viewpoint, the odds are that the correction scenario looks true. Meanwhile, crypto traders are trying to puzzle out what direction BTC will take. Few crypto analysts dare to explain why BTC has appreciated over $20,000 in the last two months. Their argument that demand for the crypto has increased is far-fetched. Most analysts share the bullish long-term outlook for BTC and project the crypto to skyrocket to $100,000 per token.

Let me remind you that the crypto market heavily depends of the Federal Reserve over the last one and half a year. The thing is that the US central bank is still pumping up the domestic economy with cash. It goes without saying that massive cash injections do not evaporate but are being accumulated in markets, in particular, in the stock and crypto markets. They have grown greatly during the global crisis. Therefore, when the Federal Reserve terminates its monetary stimulus in full, the assets like Bitcoin could halt its rally. However, this could happen in a year or in two years. Lately, the US economy has been sending signals of a slowdown. In this context, the Fed's plans of tapering QE could be delayed until later. In other words, a lot of things depend on the Federal Reserve.

But this is not the only factor. Bitcoin is frequently termed an entirely speculative asset. Experts and investors reckon that Bitcoin will hardly be used as payment for coca cola or petrol. At the moment, it is still unclear what features make Bitcoin better than conventional fiat money as a means of payment. Definitely, Bitcoin is indeed a lucrative investment instrument. No wonder, a lot of market participants are ready to invest in it. Recently, more and more influential central banks and governments introduce tough regulations and taxes on crypto investments.

They pursue the polar opposite strategies. High-income nations with advanced economies see Bitcoin as a threat to their stability, financial systems, and national currencies. Hence, they aim either to gain revenue from the crypto industry or crack down on it (China, the US). In contrast, low-income nations with emerging markets view Bitcoin at least as a means to prop up their economic conditions, if not a lifebuoy (El Salvador). All in all, crypto legislation will get stricter around the world in the not-too-distant future. Such prospects raise doubts about a further rally of the most popular digital token. Thus, all traders are recommended to analyze carefully the technical picture to have a clear understanding of an ongoing trend before making any trading decision.



According to a 4-hour chart, the overall trend is clearly bearish. The price went down below the Ishimoku cloud, the critical line of the uptrend channel, and the level of $46,600. The slump on September 7 could become the starting point of a new long-lasting downtrend. To sum up, I expect BTC price to fix below $43,852 in the nearest days and a further decline towards $40,746. At the same time, if the buyers manage to push BTC above $46,600, the crypto will be able to resume the uptrend.





Paolo Greco
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Bitcoin could bounce back towards $49,000

Bitcoin is trading around $45,000 price level near its weekly lows. Price reversed from $53,000 and came all the way down towards the 38% Fibonacci retracement of the entire rise from $29,000. Price so far respects the first Fibonacci support at the 38% level. As long as this is the case, we could see a strong bounce back towards $49,000-$50,000 next week.



Green lines - Fibonacci retracements

Blue rectangle - support

Green rectangle - bounce target

Bitcoin is trading above the 38% Fibonacci retracement support. As long as price stays above it, I believe there are increased chances of seeing a bounce towards $49,000 at least. The formation of a lower high is more probable right now than the resumption of the downtrend. I believe we are going to see lower levels in Bitcoin. Confirmation for this scenario will come with the break of the 38% Fibonacci retracement level. Next downside target is at $41,000.





Alexandros Yfantis
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

XRPUSD looks vulnerable to more downside.

Despite making new higher highs this week, XRPUSD is now trading below last week's lows. This is a sign of weakness. Price briefly moved above the key resistance of $1.35 but bulls were not strong enough to support it. Price has turned sharply lower challenging the August lows.



The weekly candlestick so far implies that more downside should be expected. The inability to hold the new highs and the turn around back towards the $1 price level were signs of weakness. The entire upward move from $0.50 is most probably complete and price is now in a corrective pull back. So far price has retraced 50% of the entire upward movement. If price breaks below $0.95, we should expect a move lower towards $0.80-$0.83. Current price action justifies such a decline. However in our longer-term view, our preferred scenario remains the one where we see the formation of a higher low and the continuation of the up trend above $2.






Alexandros Yfantis
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Bitcoin: An alarming (or optimistic) sign from derivatives exchanges

According to CryptoQuant, bitcoins are seen moving from their main addresses to derivatives exchanges. The CEO of the company suggested that the reason for the migration of coins could be filling the margin or opening new positions.

The rapid growth in the exchange inflow of bitcoins from large exchange wallets can be a wake-up call for market participants. Often, such movements from the spot market to the derivatives exchange served as a sell signal. Traders usually hold their funds on exchanges during periods when they are preparing to sell bitcoin.

But now the CEO of CryptoQuant has suggested a different version. He believes that some bitcoin holders may start to open new long positions or fund their previous positions, which were close to liquidation amid the recent fall of the main cryptocurrency. He also added that most of the time these wallets were transferring funds to exchanges, they accumulated large volumes of bitcoins, which led to a sharp increase in prices.

Earlier, the increase in inflows of derivatives was observed in October, just before the start of the last major bullish round last year, in which bitcoin rose from $10,000 to $60,000. The reason for such a strong rise in prices then was positions with a high proportion of leveraged funds. To generate significant increases in market volatility, most positions must be funded by derivatives exchanges that provide high margins for traders.

Does this mean that the market can quickly feel the effect of such a bitcoin migration? Probably not, as the volumes being moved are too large to be executed immediately.

Meanwhile, locally, since yesterday, there was no clarity regarding the direction of bitcoin. The technical picture has hardly changed. Bitcoin closed with a growing candlestick with long shadows, but below the support level of the side channel 46,299.48 - 50,513.53. Friday's daily candle looks almost the same so far.

This means that Thursday's forecast remains valid. If the price does not return to the channel above the level of 46,299.48, it means that the downward correction is likely to continue.

The targets for the fall of BTC/USD will first be the red dotted support at 44,807.24, and if this level is broken, the price will go even lower to the strong mirror level of 41,980.24.








Ekaterina Kiseleva
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Technical analysis for Bitcoin

BITCOIN



Bitcoin broke through the daily cloud (51460.75) and tested the final limit of the weekly dead cross (51163.17). Sadly, it was not possible to consolidate the results and build further plans. Bulls were literally pushed back from the positions they had reached, and now they are fighting for the length of the lower shadow of the weekly candlestick. Also, the pronounced bearish character can hardly be changed. As such, support and resistance levels are now around 49620 - 49960 (weekly Kijun + monthly Tenkan + daily Fibo Kijun).

Meanwhile, the levels above have turned from tested supports to resistances in just one day. These are: 48000 (daily Kijun) and 49150 (daily Fibo Kijun). If bearish traders continue their positions, they will quickly meet a very fortified and important support zone around 42758 - 39810 (daily cloud + weekly and monthly levels).



A deadlock after a successful fall provoked a horizontal movement, the center of which is the Pivot level (46303). Sliding below creates preconditions for further bearish sentiment.

Today, intraday supports are 45291 - 44413 - 43401 (classic Pivot levels), so investors can take profit above 46303. Doing so will recover bullish positions, which, in turn, will make 48607 the next key level.


Below explains the terms used in the technical analysis above:

higher timeframes - Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels

H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)






Evangelos Poulakis
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Stefan Ingves: Bitcoin's collapse is inevitable without government support



Bitcoin cannot restore the upward trend yet after declining to the support level of $ 43,852. The quotes returned to the level of $ 46,600, but they failed to consolidate above it on the first attempt. Thus, the corrective scenario remains in effect. If there is a consolidation above the level of $ 46,600 in the upcoming days, then we can expect the digital asset to rise to the level of $ 51,350. Meanwhile, participants in the cryptocurrency market continue to think about what to do next. As usual, the opinions of experts are divided into two options. First, Bitcoin is expected to complete the upward trend and continue to correct up to the $ 30,000 level. Second, the upward movement will be resumed, and the cryptocurrency will rise in the range of $ 75-100 thousand per coin by the end of the year. Both groups argue that they are right, but there is still no consensus. From our point of view, the events that led to Bitcoin's decline by $10,000 in El Salvador were just a starting point. As mentioned previously, the entire last section of the $20,000 growth looks very unreasonable. It is clear that this cryptocurrency may become more expensive or cheaper not necessarily on the basis of any fundamental reasons. However, they still exist in most cases, although not always obvious. The fact that its quotes declined immediately by $ 10,000 indicates that there was a sharp reduction in long positions. Therefore, market participants currently need new reasons to buy Bitcoin.

At the same time, the Governor of Sweden's central bank, Stefan Ingves, said that Bitcoin is destined to die without support from governments. He likened buying and selling cryptocurrency to postage stamps, saying that investors of digital gold who want to get rich might as well buy postage stamps.

"Private assets usually collapse sooner or later. Of course, you can get rich trading bitcoins, but that is the same as trading stamps," Ingves said.

It can be recalled that Bitcoin was criticized by representatives of other central banks and prominent politicians. For example, the ECB and the Bank of England have repeatedly warned investors that in cryptocurrency trading, they must be prepared to lose all or most of the funds invested. The People's Bank of China banned mining altogether, and also called cryptocurrency trading "speculation".

However, well-known analyst John Bollinger, the creator of the technical analysis indicator of the same name, believes that Bitcoin has already returned to the "bullish" trend after the collapse of $ 10,000. "The bullish trend for the BTC/USD pair has been restored. Good level of risk and reward," he tweeted.

At the same time, the Panamanian authorities submitted a bill according to which bitcoin can become a legal tender in the country by analogy with El Salvador. The law entitled "The law on cryptocurrencies: ensuring the compatibility of Panama with the digital economy, blockchain, crypto assets and the Internet" was presented by one of the parliamentarians of Panama, who is confident that this innovation will create new jobs in the country and attract investment. Are we waiting for another collapse of $ 10,000?



On the four-hour timeframe, it is clearly visible that the quotes of Bitcoin collapsed, as a result of which the price consolidated below the level of $ 46,600, and below the ascending channel. In this case, we expect a further decline to the level of $ 43 852 in the near future. As mentioned earlier, the last round of Bitcoin's growth seems groundless, so the asset's correction will at least not hurt. A consolidation above the level of $ 46,600 can provoke new growth with a target of $ 51,350.





Paolo Greco
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Technical Analysis of ETH/USD for September 10, 2021

Crypto Industry News:
While Russian cryptocurrency advocates are working to attract global cryptocurrency mining operators, local lawmakers have started to take the industry's regulation more seriously.

Anatoly Aksakov, chairman of the Financial Markets Committee of the State Duma of Russia, argued that Russian lawmakers are currently considering recognizing the cryptocurrency mining industry as a form of entrepreneurship under local business laws.

"Since this [mining of cryptocurrencies] is a type of entrepreneurial activity, it is obviously necessary to enter it in the state register, to regulate it as a type of entrepreneurship under the appropriate code and impose appropriate taxation," Aksakov said.

He said the government is actively working on several legal initiatives related to the crypto industry, expecting to move forward with cryptocurrency taxation and digital currency mining and issuance projects in the near future. Aksakov also highlighted the need for greater regulatory transparency of digital currencies:

"We still need to discuss what a digital currency actually is. Although we call it a currency, it is rather used as a financial instrument or financial asset that is an object of investment rather than a means of payment," he says.

According to Nikita Sosznikov, former senior lawyer at Deloitte CIS and director of Alfacash, "The practical implications for the industry will be limited to business registration and tax obligations, with some degree of official recognition as legitimate business, of course."


Technical Market Outlook
The ETH/USD pair has bounced from the level of $3,026 to the level of $3,552 and the price is hovering around this level. The momentum is negative and weak, so another wave down should be expected. Please notice, that the long-term trend line support around the level of $3,150 was violated as well, which is not a good sign for the nearest future. The local technical support levels are: $3,337, $3,274, $3,185 and $3,122. The resistance is seen at $3,596 and $3,830. The key technical support is still located at the level of $2,945.

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]

Technical Analysis of BTC/USD for September 10, 2021

Crypto Industry News:
The Ukrainian parliament has adopted the bill "On Virtual Assets" regulating foreign and domestic cryprocurrency exchanges operating in the country.

The legislation is based on existing standards developed by an intergovernmental organization, the Financial Action Task Force (FATF).

The task of the Ukrainian Ministry of Digital Transformation will be to oversee the implementation of the new digital asset regulation and manage growth in line with international standards.

Anastasia Bratko from the Ministry of Digital Transformation said the law allows companies to launch digital asset markets in Ukraine and banks allow them to open accounts for crypto companies.

"Ukrainians will also be able to declare their income in virtual assets," she said, adding that the law "guarantees judicial protection of rights to owners of virtual assets."

The ministry's announcement also stressed that "the country will receive additional tax revenues to the budget that will be paid by crypto companies," adding:

"The adopted standards set rules for providers of services related to trading in virtual assets and contribute to the clarification of the market," it reads.

MV service providers "need to have an impeccable business reputation" and will need to disclose their ownership structure to identify their ultimate beneficial owners. Suppliers must also apply internal anti-money laundering measures.

Oleksandr Bornyakov, Deputy Minister of Digital Transformation of Ukraine, drew attention to the provisions contained in the act aimed at attracting "foreign stock exchanges to the Ukrainian market".

"They will become a powerful stimulus for the further development of the cryptosphere in Ukraine. Banks will open accounts for them and conduct transactions in a new asset class. I am convinced that the legalization of the new sector of the economy will benefit society, business and the state," he said.


Technical Market Outlook
The BTC/USD pair has bounced towards the level of $47,557 and tried to break out higher but the rally was capped at the level of $47,375. The bears are in full control of the market as the price might be heading towards the level of $45,043, the last technical support before $43,159 level. The weak and negative momentum supports the short-term bearish outlook and only a sustained break out above the level of $50,000 would change it to bullish.

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