Cryptocurrency Analysis

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The market is simply taking profits; New milestone - Direxion Foundation launches bitcoin shorts

Bitcoin fell to its lowest level in 1-1/2 weeks on Wednesday, losing up to 12% from recent gains - although the digital currency is still on its way to its annual highs thanks to the new opportunity to short positions on BTC.

The market is simply taking profits; New milestone - Direxion Foundation launches bitcoin shorts. The digital token has lost 12.1% since hitting an all-time high on October 20 at $67,016.

Bitcoin had fallen 2.3% to $58,965. Smaller coins such as Ethereum and Ripple, which tend to move in tandem with bitcoin, also fell by 3.5-7%.

According to Tony Sycamore, a representative of City Index, bitcoin's losses were due to the fact that traders profited from its recent growth.

Indeed, the moment of fixation was bound to happen. Now we are dealing with a new level of support.

Let's also not forget that a small outflow occurred in the Shiba Inu trade sector, which shows a 100% increase over the past week. This is a normal short-term redistribution of assets between tokens.

The quotes of cryptocurrencies were also affected by disappointing news for the holders of Robinhood shares: an ill-conceived policy regarding the IPO hit the platform, causing indirect damage to all its instruments as well.

Now, when users of the platform are tearing and tearing, wanting to trade Shiba, the service refuses to add a new token, arguing this is dangerous volatility. In fact, things seem to be going badly for the service, and they are afraid of not being able to cope with the liquidity of transactions at the time of the course correction.

Bitcoin is facing a "short-term downtrend," said Du Jun, co-founder of major crypto exchange operator Huobi Group, adding that further decline may be limited given the relatively low trading volumes. The fact is that the holders of the figure are now in no hurry to part with the asset, expecting naturally further growth against the background of positive news.

This month, the digital currency showed an increase of almost 35%, which, while maintaining the dynamics, will be the best indicator in eight months. And it has every chance of it.

Short positions on bitcoin - a new height has been taken

Today, the exchange-traded fund Direxion Bitcoin Strategy Bear announced that bitcoin has overcome another major historical "support level". The bitcoin-related ETF industry in the US could reach another milestone by offering cryptocurrency futures shorts.

According to a statement from the Securities and Exchange Commission on Tuesday, the Direxion exchange-traded fund offers short positions on CME bitcoin futures contracts. Against the background of the debuts of the ProShares Bitcoin Strategy ETF and Valkyrie Bitcoin Strategy ETF, both of which are backed by futures, this news was not so loud, but created prerequisites for the support of the exchange rate. As soon as retail traders react to the news at the US session, we can expect the token to grow.

It should be noted that the Direxion fund is taking quite serious risks, including the possibility of destroying short sales. The habitually wild fluctuations of bitcoin will also be an independent problem. Other possible dangers include liquidity and futures issues, the filing says.

But in reality, volatility is now playing into the hands of a market hungry for short trades. Moreover, short positions can add liquidity to the entire market. This type of transactions is extremely interesting to players in the cryptocurrency market, because the fluctuations of tokens can be very significant, and here the trader has a better chance that the short will bring profit. Therefore, such news can really strengthen BTC.

"If you are not prepared for significant and unexpected changes in value and the likelihood that you may lose all your investments, you should not invest," the Commission said in a statement. But most likely, new options and the ability to hedge losses will make bitcoin even more attractive.





Egor Danilov
Analytical expert of InstaForex
© 2007-2021

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Bitcoin crashes and settles below the $60,000 milestone: ETF euphoria has passed, and sales are only getting worse




Bitcoin begins to lose value and falls below the $60,000 milestone. And all because the euphoria regarding the first historical ETF ProShares Bitcoin Strategy, or ticker BITO, has already passed.

Traders have taken their profits after record highs. Digital gold has fallen by more than 6% to $58,800 today, thereby reaching the lowest levels in almost 14 days.

A week ago, bitcoin reached its historical highs and traded at a price of $67,000, and a week later, bitcoin lost almost $10,000 in price.

This means that the Bitcoin ETF was the catalyst that forced investors to buy bitcoins and increase the price.

Some analysts from Nexo say that they are not surprised that bitcoin has not gained a foothold at its record high, since it first needs to cool down, slow down a little, go through a correction before moving on to a new stage of development.

Speculators are reducing their positions. According to analytical data bybit.com , the total amount of liquidation of long positions today reached more than 700 million US dollars, which is a record since September.

Jonathan Cheesman, head of over-the-counter institutional sales at the ftx cryptocurrency or derivatives exchange, believes that the market has been using borrowed funds for a whole week for a long time, and the CEO and co-founder of FRNT Financial Inc. Stefan Ouellette said that the euphoria around the ETF is passing, and the sell-off is only getting worse.

For 14 days, it was possible to observe monthly and quarterly Bitcoin futures in the range of up to 30%, and over the past few days it was possible to observe a typical cryptographic rollback. Now there is a clear reversal of the pattern, namely, "head and shoulders", where the key level is $60,000.



Bitcoin fell below its 20-day moving average, and if it does not recover now, it could fall further down to $52,000.

The ProShares Bitcoin Strategy ETF amassed more than $1 billion in the days after it launched - it was a real sensational event for investors, since they did not need to own the crypto asset itself, but could speculate on correlations in price.

It is very important for bitcoin to recover and step over the psychological threshold of $60,000, but in the meantime, the fall in prices is strengthened by the fixation of investor profits and sales.

Many sellers take their profits on the investments received, and the correction is now a necessary event, however, as before, it was not provoked by any fundamental factors.





Vitaly Kolesnikov
Analytical expert of InstaForex
© 2007-2021

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Ethereum: 3,800 attractive for sellers


Ethereum is traded at 3,983.79 far below 4,332.29 today's high. Bitcoin's drop forced the altcoins to decline as well. The crypto plunged below strong downside obstacles, so the sentiment changed.

In the short term, ETH/USD could approach and reach new lows after failing to approach and reach the previous highs. The cryptocurrency dropped by 9.17% from 4,332.29 daily high to 3,935.02 today's low. The bias is bearish right now, so more declines are expected.


ETH/USD DOOR OPEN FOR MORE DECLINES



As you can see on the h4 chart, ETH/USD dropped and closed below the uptrend line and under 4,025 static support. Its breakout through the confluence area formed at the intersection between the support levels announced strong seller and potential deeper drop.

Failing to take out the first warning line (wl1) and failing to stay above the upper median line (uml) signaled potential correction. 3,800 psychological level is seen as a downside target.


ETHEREUM FORECAST
The current breakdown below the upper median line, weekly pivot (4,043), 4,025, and through the uptrend line signals more declines. Testing and retesting the broken support levels could bring new short opportunities.

Failing to approach and reach 4,375 previous high or the 4,380.64 all-time high signaled a potential correction towards 3,800 or even lower to 3,677.





Ralph Shedler
Analytical expert of InstaForex
© 2007-2021

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Trading signal for BITCOIN on October 27 - 28, 2021: buy in case of bounce from $ 56,250 (EMA 200)



After having made an all-time high on October 20 at 66,938, Bitcoin is retreating and has already fallen from this level of more than $ 8,500 which represents an 11.5% loss so far. A technical rebound is expected at the support of the 200 EMA located around 56,250. The 1/8 murray support is located at the same level.

The bulls have not been able to sustain the price of BTC above the psychological level of 60,000. It means that they are waiting for good support to buy Bitcoin again. According to the 4-hour chart, the 56,250 level is viewed as the key level that will give it the bullish moment and he price may rise to 62,500 and up to 3/8 of a murray at 68,750.

According to historical data, every time that BTC printed a historical high, a consolidation always fololws that lasts for 3 to 4 weeks. This time a fall of more than 50% occurs. Therefore, BTC is likely to fail to consolidate above of 63,000. There is the strong resistance of 2/8 of murray, so there may be a fall to the support of 41,100. This is the price level of September 27.

The medium-term outlook remains bullish for Bitcoin. As long as it remains above the 200 EMA (56,250), there will always be the possibility of a bullish movement and the price could rise to 68,750.

On the other hand, a sharp break and consolidation below 56,000 could initiate a new bearish scenario and BTC price could fall to the psychological level of 50,000 and to the level -1/8 murray around 43,750.


Support and Resistance Levels for October 27 - 28, 2021
Resistance (3) 61,402
Resistance (2) 60,783
Resistance (1) 59,877

Support (1) 57,851
Support (2) 56,250
Support (3) 54,661


A trading tip for BITCOIN for October 27 - 28, 2021
Buy in case of rebound around 56,250 (EMA 200) with take profit at 59,877 and 61,400 (SMA 21), stop loss below 55,250.





Dimitrios Zappas
Analytical expert of InstaForex
© 2007-2021

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Bitcoin: fears came true, BTCUSD fell below 60,000; now heading to 55,000 and 52,000


Fears about a deeper correction of the main cryptocurrency have been justified. The support of $60,000 per coin has been broken, and the head and shoulders reversal pattern has formed.

With such a technical picture, the potential for working out a figure is measured by the height of its head. But let's take into account the levels standing in the way. In this case, the targets for the decline will be in the area of 55,000 - 56,000, and if it passes from top to bottom - in the area of 52,000 dollars per coin.


The consequences of the collapse
Today, the capitalization of the entire cryptocurrency market has decreased by more than $210 billion. The sudden crash resulted in over $850 million in long and short positions on leading cryptocurrency derivatives trading platforms.


What triggered the fall
While it looks like the correction may be over, there are several signals indicating a deeper correction. The estimated leverage ratio on cryptocurrency derivatives exchanges is about to hit an annual high.

This reason intensified the market collapse in May: positions with leverage with a slight decrease in prices are quickly taken out, and accounts are closed by a margin call.

Favorable funding rates of 0.1% or higher every eight hours are generally considered volatile. Higher rates suggest that market speculators are overly optimistic as traders who trade long pay to fund shorts (short traders). When this happens, traders can begin to experience so-called "euphoria" in their positions, which often leads to sharp corrections.

CrytoQuant data shows that the calculated leverage ratio of Bitcoin across all exchanges is hovering around 0.19%, which is a negative signal for a continuation of the upward trend.


Is the bullish trend lost?
It should be noted that the high level of leveraged positions is nothing new. This threat was discussed last week, although few people paid attention to it. But then, favorable ETF news pushed the price up uncontrollably.

Funding rates across all derivatives trading platforms may need to be normalized in order for the market to continue a healthy bullish move. And while the rally could continue without a drop in funding rates, an event similar to today's sudden collapse could occur in the market.

So far, in my opinion, you should still focus on technology. Let's see how today's daily candle closes. And even if the breakout of the neckline of the reversal pattern turns out to be false, in the coming days, consolidation below $60,000 per coin is likely to occur.

This means that the main cryptocurrency will go to at least $55,000 per coin.







Ekaterina Kiseleva
Analytical expert of InstaForex
© 2007-2021

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BTC analysis for October 27,.2021 - Sellers in control

Technical Analysis:



BTC has been trading downside and there is still potential for further drop. There is the breakout of the well defined trend line in the background...


Trading recommendation:
Due to the breakout of the rising trend line in the background and selling pressure today, my advice is to watch for selling opportunities on the rallies.

Downside targets are set at the price of $56,380 (Fibonacci 100%) and $51,950 (Fibonacci 161.8%).

Stochastic is showing that bears in control with evidence for the reversal....

Key resistance is set at the price of $63,700





Petar Jacimovic
Analytical expert of InstaForex
© 2007-2021

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Trading plan for Bitcoin for October 27, 2021



TECHNICAL OUTLOOK:
Bitcoin remumes its corrective decline from $67000 highs, as discussed earlier and in-line with expectations. The crypto currency is trading around $58900 mark at the time of writing and should find some support around $56200 mark. As shown on the daily chart, the Fibonacci 0.382 retracement of the recent upswing between $40000 and $67000 is passing through $56200 level.

A break below $56000, will open door to test $53000 and $50000 levels in the next few trading sessions as correction deepens. Please note that strong support is seen around $50000 mark, which is the Fibonacci 0.618 retracement and the channel support zone as well. High probability remains for bulls to be back in control if Bitcin drops to $50000 level.

Aggressive traders might remain short for now as suggested on Tuesday, with tight risk at $67000 high. Strong price support is seen through $40000 level, followed by $28600 on the daily chart. Only a break below $40000 and channel support line will change the trend to bearish and target below $28600.


TRADING PLAN:
Potential drop to $56000 against $67000 level.

Good luck!





Oscar Ton
Analytical expert of InstaForex
© 2007-2021

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Ethereum rallies ahead of important network update



Ethereum has been soaring since last week, in anticipation of the update that will help its subsidiary network become faster and more energy efficient.

Data shows that it is up 10% since October 19, while Bitcoin is down almost 3%. Ether also outperformed other digital tokens such as Binance Coin and Cardano.

As mentioned above, growth occurred ahead of the scheduled update today, October 27, which will not only make the network faster and more scalable, but also lower user fees.

All in all, Ethereum has skyrocketed nearly 1,000% in the past 12 months, outpacing Bitcoin's 380% growth. One of the reasons is the network's popularity for applications such as DeFi and NFT.



But like other cryptocurrencies, Ether is also prone to large fluctuations so it's not a surprise that it lost more than half of its value earlier this year before recovering. On Tuesday, it traded around $ 4,200.

In any case, bulls are using the options market to advertise a potential Ether ETF announcement, said crypto liquidity provider B2C2.

Meanwhile, Bloomberg Intelligence strategist Mike McGlone commented: "The dollar value of Ethereum futures open interest rising to where Bitcoin was in July indicates that ETFs tracking the No. 2 crypto should be a matter of time. ETF providers have been discouraged by the SEC from launching products on Ethereum, but futures trading, demand-pull forces and competition suggest its inevitability."





Andrey Shevchenko
Analytical expert of InstaForex
© 2007-2021

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Cryptocurrency market loses $500 million amid sudden collapse and BTC below $60,000


The bitcoin recovery was disrupted by a sudden and sharp collapse of all major cryptocurrencies. The total capitalization of the cryptocurrency market fell by 6.5% in just an hour, causing all of the top ten digital assets to plummet and fall into the red zone. The market leader was hit especially hard and made a bearish breakout of $60,000. As of 12:00, the total capitalization of the cryptocurrency market dropped to around $2.6 trillion.

In just one hour there was a massive collapse in the market, as a result of which the market lost more than $500 million. The biggest open position estimated at $68 million was closed. What was the reason for such a sudden decrease will show further analysis after the situation on the market is stabilized. However, it is possible to assume that such a sharp decrease was caused by profit generation in bitcoin, which formed free volumes in the market. It can be assumed that the big players deliberately went short in order to buy the assets at an affordable price and after the rally to new highs.



If we were conspiracy theorists, this theory has all chances to exist, as bitcoin fell to $59,000, where it is trying to find support. Over the past 24 hours, the asset has fallen in price by 6%, and by 8% over the week. At the same time, there is a surge in daily trading volumes to $40 billion, which could mean the current sell-off is losing momentum. On the hourly chart, BTC is declining, and it is likely that the digital asset may break through $59,000 and continue to fall. The price broke through the supertrend line, which is a bearish signal indicating that the sellers' pressure may strengthen. The MACD indicator has crossed the zero mark and continues its downward movement, which indicates strong bearish momentum. The stochastic oscillator formed a bullish cross, but the price began to fall eventually, indicating a strong buyer entered the market. However, the buyer was unable to change the situation. The RSI confirms this and continues to decline below 30, indicating that the metric has fallen into an oversold zone. The overall situation on the hourly chart indicates the start of a sell-off, which pushes the price below $59,000.



On the daily chart, the situation continues to worsen, showing that the price may fall below $59,000. The BTC price formed a short red candle, but the sellers' positions didn't look confident. This confirms that the collapse was sharp and occurred on the morning of October 27. Despite this, the asset is still hovering above the supertrend line, indicating that the medium-term bullish trend persists. However, the price may drop out of the short-term $59,000-$65,000 growth range, and therefore the recovery may take more time. This is also confirmed by the sharp rise in open short positions below the $59,000 area, which indicates that traders want the price to go down. The technical indicators also show an increasing bearish downtrend. The MACD indicator formed a bearish crossover and now it is below zero. The stochastic oscillator made a powerful downtrend to 20, which indicates the strength of the sellers. The RSI is also declining and may reach 40 soon.



The sharp fall of BTC triggered the collapse in quotations of other cryptocurrencies. However, bitcoin investors faced the biggest losses. Given the nature of the bitcoin market participants, the price is highly likely to break through $59,000. The next important target is at $56,600, which, if reached, may cancel the medium-term uptrend. Most likely, the rebound may occur between $56,000-$57,500 and then the market is likely to begin the phase of slow accumulation and recovery. Now, the bulls' main task is to hold positions at $56,600, as there is no doubt that sales growth will increase and the situation may start to stabilize only by the middle of the current trading day.





Artem Petrenko
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Technical Analysis of BTC/USD for October 27, 2021


Crypto Industry News:
The world faces "strong inflationary pressures" in the short term, which may persist, warns Elon Musk, the world's richest man.

In the inflation debate, some of the most famous names in Bitcoin have voiced unanimous doubts about the state of global monetary policy.

As even the US Federal Reserve admits that inflation may persist, the topic has become particularly relevant to Bitcoiners given the deflationary characteristics of the cryptocurrency.

For Elon Musk, as a "magic pill" for the ills of fiat currency, inflation is no less a problem. With over $ 250 billion in net assets, potential exposure to currency devaluation is more of a potential problem than ever.

I don't know for how long, but we see strong inflationary pressure.

He said in a Twitter interview with Ark Invest CEO Cathie Wood and MicroStrategy CEO Michael Saylor.

This refers to the tweet of Twitter CEO Jack Dorsey, who described inflation as "happening" and prone to "change everything".

Wood, also a staunch supporter of Bitcoin, noted that the monetary speed had dropped since the 2008 global financial crisis hiding some of the impact of the devaluation.

Regardless, when all types of products are considered, the true cost of printing a dollar far outweighs government claims about how insignificant inflation is.


Technical Market Outlook
The BTC/USD pair had broken below the technical support seen at the level of $59,561 and is heading towards the next technical support located at $57,770. The 38% Fibonacci retracement of the last wave up is located at $56,934 and there should be some kind of bounce from this level. The momentum is weak and negative as bears are temporary on control of Bitcoin. The larger time frame trend is still up.

Weekly Pivot Points:
WR3 - $72,680
WR2 - $69,750
WR1 - $64,343

Weekly Pivot - $61,785
WS1 - $57,070
WS2 - $54,248
WS3 - $49,247


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 $66,974 (the previous ATH level). 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