Cryptocurrency Analysis

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Ripple false breakdown with great separation

Ripple is fighting hard to recover after its amazing sell-off. XRP/USD registered a 51.68% drop from 1.3494 higher high registered on November 10, 2021, to 0.6520 Saturday's (December 04, 2021) low.

At the moment of writing, the crypto was trading at 0.8235 and it seems undecided. In the last 24 hours, XRP is up by 3.34%. In the short term, it could move sideways trying to accumulate more bullish energy. Technically, after its massive drop, Ripple could develop a new fresh swing higher. Still, it's premature to talk about a new leg higher as long as the crypto stands below strong upside obstacles.


XRP/USD down channel



As you can see on the H4 chart, the price of Ripple registered only a false breakdown with great separation below the down channel's downside line and under the Descending Pitchfork's median line.

Now, it's trapped between 0.8642 and 0.7428 levels. It has failed to stay above the 0.8295 pivot point, so a potential decline is favored as long as it stays under this level. A sideways movement followed by a valid breakout through the downtrend line could announce an upside reversal.


XRP/USD outlook

Ripple could drop again after its failure to stabilize above the weekly pivot point or to approach and reach the 0.8642 former high. A temporary decline could help the buyers to catch a new upwards movement.

As long as it stays above the 0.7428 static support, XRP/USD could still give birth to a strong upwards movement. A new higher high, a bullish closure above 0.8642 could signal an upside continuation.





Ralph Shedler
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Has Bitcoin started a new rally or is this just a counter trend bounce after the weekend selloff?

Bitcoin bulls have managed to recapture the $50,000 price level after making a low close to $41,000 over the weekend. Volatility has spiked once again as price plummeted during the weekend only to find support around $40,000 and the 61.8% Fibonacci retracement which was our 2nd target.



Black lines- Fibonacci retracements

Resistance is now found at $53,000 which was previously key support. Bulls need to break above this level in order to continue higher. Price has made a long lower tail on Saturday implying support is strong above $40,000. Bears need to break below $41,000 in order for prices to fall further towards $30,000. On the other hand bulls need to start making higher highs and higher lows. For now price has formed a higher low at $41,642 relative to the $29,000 low back in July. Longer-term trend remains bullish as price continues making higher lows and as long as price is above $29,000.





Alexandros Yfantis
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Technical Analysis of ETH/USD for December 7, 2021

Crypto Industry News:
Ethereum co-founder Vitalik Buterin outlined his vision of a "possible roadmap" for Eth2, outlining a future where the largest smart contract platform can scale up while meeting high standards of distrust and censorship resistance.

In today's post titled "Endgame", Buterin presented a thought experiment on how an average large Blockchain - defined by very high block frequency, large block size, and thousands of transactions per second - can be considered censorship-proof enough and not trust-based. The obvious trade-off for this level of scalability is the centralization of block production. Buterin's solutions, featured in the blog post, do not solve the centralization problem, but still provide an implementation plan.

Regarding the solutions, Buterin suggested a "second layer of low-resource staking" to validate distributed blocks. "Introduce anti-fraud or ZK-SNARKS protection to allow users to check block validity directly (and cheaply)" directly, and "introduce data availability sampling to allow users to check block availability [and] add secondary transaction channels to prevent censorship."

With these updates, "We get a chain where block production is still centralized, but block validation is non-trust-based and highly decentralized, and specialized anti-censorship magic prevents block makers from being censored," explained Buterin.

The co-founder of Ethereum concluded that there is a high probability that block production will remain centralized, regardless of the scalability path that the network is taking.


Technical Market Outlook
The ETH/USD pair has broken through the trend line resistance seen around the level of $4,300 and made a new local high at the level of $4,430 (at the time of writing this analysis). The next technical resistance is located at $4,435 and $4,557. The immediate technical support is seen at $4,257. Despite the recent complex and time consuming corrective decline in form of ABCxABC pattern, the larger time frame trend remains up. The H4 time frame RSI indicator is showing an increase in momentum above the neutral level of fifty, which supports the short-term bullish outlook for ETH.

Weekly Pivot Points:
WR3 - $6,154
WR2 - $5,472
WR1 - $4,817

Weekly Pivot - $4,100
WS1 - $3,475
WS2 - $2,785
WS3 - $2,131


Trading Outlook:
The ABCxABC complex corrective cycle might be terminated, so the next long-term target for ETH is seen at the level of $5,000. Nevertheless, in order to continue the long-term up trend, the price can not close below the technical support at the level of $2,906. 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. The level of $3,677 is the key mid-term technical support for bulls.








Sebastian Seliga
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Technical Analysis of BTC/USD for December 7, 2021

Crypto Industry News:
The Republic of El Salvador bought 150 Bitcoins in its worst bear market since BTC hit a record high of almost $ 68,000 in the first week of November.

Salvadoran President Nayib Bukele announced the purchase of 150 BTC as the market price temporarily fell below $ 50,000 last weekend after losing more than 15% of market value.

While the Bukele government was able to buy at $ 48,670 per coin, the Bears temporarily lowered Bitcoin's price to almost $ 42,000 after a drop of more than 37%, from a record high.

Thanks to this purchase, El Salvador's Bitcoin reserve now amounts to 1,270 BTC, which at the time of writing is worth nearly $ 60.3 million. Earlier, the president announced the purchase of 420 BTC on October 28 during a temporary bear market.

The Salvadoran plan includes withdrawing unrealized US dollar BTC gains to finance various development projects while maintaining the overall value of the central reserve.


Technical Market Outlook
The BTC/USD pair has retrace 61% of the last wave down as the bulls hit the level of $51,545. The next technical resistance is located at $53,333. The immediate technical support is seen at $49,720. The momentum is picking up from the oversold conditions, currently hovering around the level of fifty on the RSI (14) indicator. Despite the recent complex and time consuming corrective decline in form of ABCxABCxABC pattern, the larger time frame trend remains up.

Weekly Pivot Points:
WR3 - $75,308
WR2 - $67,229
WR1 - $57,614

Weekly Pivot - $49,717
WS1 - $40,054
WS2 - $31,972
WS3 - $22,000


Trading Outlook:
The ABCxABCxABC complex corrective cycle might be terminated at the level of $41,678 and the market is ready to continue the up trend. According to the long-term charts the bulls are still in control of the Bitcoin market and the next long term target for Bitcoin is seen at the level of $70,000. This scenario is valid as long as the level of $39,474 is clearly broken on the daily time frame chart (daily candle close below $39,000 would be considered as a long-term trend change due to the lower low placement).








Sebastian Seliga
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

The main news of the crypto market for December 7



Bitcoin has collapsed to $42,000 and may continue to decline.

The weekend turned out to be really "black" for bitcoin. Within just a few hours on Saturday, the cryptocurrency quotes fell by $15,000. A little later, a recovery followed, which allowed the cryptocurrency to recover most of the losses. But only Saturday's losses. In just the last few weeks, bitcoin has sunk by $19,000, if you count the opening and closing levels. And, most importantly, all this movement can be considered one wave. Thus, after a slight pullback to the top, a new downward wave may follow, which may lead the cryptocurrency to the $ 30,000 mark, where it has been for a long time this summer. However, we will talk about the waves a little below. So far, I want to note that only an unsuccessful attempt to break through the $ 41,368 and $ 42,674 marks, which corresponds to 38.2% and 38.2% by Fibonacci, stopped the decline of the instrument. At the same time, two days have passed since this fall and the markets are clearly in no hurry to buy bitcoin "at an attractive price." Perhaps they are waiting for a new, stronger decline and, from my point of view, they are waiting correctly.

On Saturday, there was only one event that could lead to such a strong decline in the entire cryptocurrency market, since not only bitcoin fell in price. The Chinese developer Evergrande, who has been walking on the edge of the abyss of bankruptcy for several months in a row, announced that he would not be able to guarantee the fulfillment of financial obligations and the payment of interest on bonds for $ 260 million. By and large, this is called a technical default. The company has certain assets, but if investors refuse to restructure its debt, the company must be declared bankrupt. To tell the truth, many have already given up on it. Its debt is too great. But what will be the consequences after this is officially announced? At times when a large company fails and can no longer fulfill its obligations, it affects all markets. A vivid example of this is the collapse of Lehman Brothers in 2008. Investors in a panic get rid of the riskiest assets, as they are the first to fall in price. And on Saturday, investors could not sell stocks or bonds, since stock markets were closed. Therefore, only the cryptocurrency market suffered. It should also be noted that at the moment the total debt of the company exceeds its value by $ 100 billion, and the Chinese government refused to lend a helping hand to the company. According to many analysts, the official collapse of Evergrande could trigger a new global financial crisis.



The current upward section of the trend still does not cause any doubts. The wave pattern was refined after the instrument made a successful attempt to break the maximum of the assumed wave 3. Now the whole picture looks like a completed five-wave impulse upward trend section, which began its construction on July 20. The departure of quotes over the past three weeks from the reached highs may mean the end of the expected wave 5, which in this case turned out to be shortened. At the moment, I'm leaning towards this option. There is no alternative option at this time since the instrument does not even try to start a new upward wave. Thus, now I expect either a further collapse in the quotes of the instrument (if the news background matches or the market starts to panic) or the construction of an upward corrective wave b, after which the decline will also resume with targets located below the low wave a. That is, below the $ 41,469 mark. As you can see, there is no smell of $100,000 in 2021.





Chin Zhao
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Trading signal for Ripple (XRP) on December 07 - 08, 2021: buy above $0,8129 (21 SMA)




The price of Ripple (XRP) collapsed to the price level of July 26 at 0.6036. The sharp fall in BTC caused Ripple to fall strongly until it almost reached the extreme oversold zone of -2/8 of Murray.

After a few hours, XRP bounced closer to the zone of the 21 SMA. Right now, it is consolidating above the 21 moving average and if it trades above 0.8129, the bullish movement could continue to the top of the bearish channel and up to the 200 EMA located at 1.0108.

Since December 4, when it registered the low of 0.60, until today, December 7, when it is trading at 0.82, it has obtained a yield of more than 30%. The bulls were positioned at the low-price level with the target at the psychological level of 1.00 in the short term.

Our trading plan is to buy as long as it remains above the SMA 21, targeting 0.8789 and 1.0108 (200 EMA). Conversely, if it trades below 8/8 Murray again, the downward movement is expected to continue towards the support of -1/8 Murray around 0.6836 and up to the psychological level of 0.50.

If BTC consolidates below the 50,000 level, due to the correlation it is likely to affect the strength of XRP, and it may fall to the support level of 0.62. The eagle indicator is under downward pressure and moving below the trend channel. This provides a bearish signal for the short term.


Support and Resistance Levels for December 07 - 08 2021
Resistance (3) 0,9230
Resistance (2) 0,8736
Resistance (1) 0,8456

Support (1) 0,7682
Support (2) 0,7188
Support (3) 0,6908


A trading tip for XRP on December 07 - 08, 2021
Buy above 0,8129 (21 SMA) with take profit at 0,8789 (1/8) and 1,0108 (200 EMA), stop loss below 0,7950.





Dimitrios Zappas
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Bitcoin - is the correction over?

Bitcoin was trading at 48,891.66 at the time of writing. It seemed undecided after registering an amazing sell-off in the previous days. In the short term, the bias remains bearish. It's located below major upside obstacles, so it could drop anytime.

BTC/USD registered a 27.21% drop from 57,652 Friday's high to 41,967.50 Saturday's low. In the short term, Bitcoin tries to recover but the 49,777.62 level stopped the bullish momentum. In the last 24 hours, the crypto is down only by 0.28%.


BTC/USD MASSIVE DROP



As you already know from my analysis, BTC/USD activated a downside movement after dropping below 55,918.80 static support. I've also told you that dropping and closing below 53,524.03 could open the door for a larger downside movement.

BTC/USD registered a false breakdown with great separation below the Descending Pitchfork's lower median line (lml) and under 88.6% signaling that the downside movement could be over.


BITCOIN PREDICTION
As long as it stays below 50,226.31 weekly pivot point and under the Descending Pitchfork's median line (ml), BTC/USD could drop again. Registering only false breakouts through these upside obstacles could signal new bearish momentum.

Only jumping, closing, and stabilizing above the pivot point, above the median line (ml), and above the 50,000 psychological level could signal a strong upwards movement.





Ralph Shedler
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Bitcoin: the collapse of hopes and the bull market (not a fact)


Cryptocurrencies were not very encouraging at the weekend, having collapsed by almost 20%. The fall in the area of $41,000 was definitely not included in the plans or forecasts.

But be that as it may, the technicality with which the price remained above the level of 48,175.51, which worked before, is encouraging. It now serves as that shaky frontier keeping the mainstream cryptocurrency from the next downturn.


HOW LOW WILL BTCUSD FALL?
By tracking the news feed for the cryptocurrency market over three days, it is difficult to clearly see the reason for the slump over the weekend. Everyone is looking at the technical picture and holding onto the $48,000 support.

In fact, there is no special guide at present apart from technology. In such a situation, there are two immediate scenarios: an upward pullback to the area of $52,000 - $53,000 per coin and a breakdown of the support at $48,000.

In either case, it is difficult to talk about a return to growth in the near future. The most optimistic scenario, in my opinion, is consolidation in the range of $48,000 - $52,000. Although there are those who expect a V-shaped pullback, it has not yet happened. It can be judged by consolidating above $53,000 per bitcoin.

The second scenario is a breakout of the $48,000 support, in which Bitcoin can be caught at Saturday's lows in the $42,000 area.


ARE BITCOIN WHALES SHORTING THE MAIN CRYPTOCURRENCY?
Analyst firm CryptoQuant warned on Sunday that the rise in major moves on crypto exchanges indicates that whales may increase their sales.

Such conclusions were made on the basis of a metric that shows the ratio of whales on the exchange. It is calculated based on the maximum size of inflows and outflows from exchanges compared to the volume of total inflows.

Before bitcoin collapsed on Saturday, forming its low, this ratio increased to its peak of 0.95. It returned to the same value on Monday.

CryptoQuant also added that there is a noticeable cooling in the futures market, which can be seen in the decrease in the calculated leverage ratio by 22%.

In contrast, over the past few days, smaller investors have increased their positions - in contrast to the price adjustments of both whales and bitcoins that took place earlier in 2021.

But did someone buy out the bottom, judging by the long Saturday shadow to return to $48,000 per bitcoin? So far, yes, and the data shows retail investors are taking advantage of the opportunity to restock cryptocurrencies. Not to mention El Salvador, who loves to buy the bottom in the tradition of President Bukele.

What is all this for? If major players continue to sell BTCUSD, the current support is unlikely to resist and the price may well return to Saturday's lows. In the current situation, it is very difficult to make predictions other than the technical ones described above. Therefore, as Grandpa Dow bequeathed to us, it is worth focusing on the levels and the price, which includes everything.








Ekaterina Kiseleva
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

Unexpected reason for the collapse of BTC: Bitcoin falls because it is strengthening

Bitcoin is losing out to rivals like Ether due to its recent drop over the weekend. Analysts believe that the reasons should be sought in its increased connection with macroeconomic factors.



The largest cryptocurrency fell 21% on Saturday ahead of the rebound, although it is still trading around $48,200, down about 10% from Friday's close. Bitcoin dropped to $42,296 before it partially recovered.

Ether, the second-largest token, fell 17.4% before dropping to about 4%. According to the CoinGecko tracker, the total crypto sector lost about a fifth of its value, dropping to $2.2 trillion.

In the crypto world, weekend fluctuations are not uncommon. This is due to several factors, including lower trading volumes and a market structure of hundreds of disconnected exchanges, which are essentially their own islands of liquidity.

However, the general expert opinion on the main reason is that the market is inclined to take less risks in December, on the eve of the Fed meeting.

Fluctuations in cryptocurrencies occur during a period of volatility for financial markets. The soaring inflation is forcing central banks to tighten monetary policy, threatening to destroy the favorable liquidity climate that has previously boosted a wide range of assets.

"The decline was likely driven in part by technical conditions exacerbated by the derivatives market, and was not fueled by the downward momentum behind fast-growing equities on Friday, with which bitcoin correlates positively," wrote Katie Stockton, founder of Fairlead Strategies.

The omicron coronavirus variant has also led to risk aversion due to concerns over what this might mean for a global economic recovery.

Sean Farrell also cited the reaction to three events on Friday: news of the omicron option, reaction to the possibility of an accelerated Fed cuts, and action in the derivatives market.

The drop in the figure was part of a global correction.

For example, global stocks fell more than 4% from their November record, while safe-haven assets such as Treasuries rose.


LEVERAGED TRADING AS A CAUSE
However, there is another opinion of stock market experts, which focuses on the global sell-off due to the widespread use of loans.

"As usual, since crypto traders use leverage, it leads to cascading selling and liquidation," said Antoni Trenchev, co-founder of crypto lender Nexo. "We should find support in the $40,000-$42,000 region and then recover in line with the year-end rally. If this does not happen, we can return to the July lows of $30,000-$35,000."

But what is the cause and what is the effect?

Some bitcoin buyers were reportedly ousted due to the Saturday crash. Did the collapse cause them to fail, or is their use of credit funds the reason for the collapse?

Vijay Ayyar, head of the Asia-Pacific with cryptocurrency exchange Luno in Singapore, emphasized that it was the borrowers who were kicked out of the market.

Thus, we can conclude that we were dealing at least in part with another reason for the correction - the widespread use of leverage.

But that's not all.


BITCOIN IS AN OUTSIDER DUE TO ITS LEGAL REINFORCEMENT
Sean Farrell also believes that the rest of the cryptocurrency market is recovering much faster than Bitcoin, due to events that create macroeconomic uncertainty. At first glance, the situation is exactly the opposite of the trend that Bitcoin outlined in the spring, firmly taking a leadership position and not allowing Ethereum to squeeze itself out. But now the hegemony of the forward coin has fallen into disarray.

Institutions and larger investors have been buying cryptocurrency over the past year or so at an accelerated pace as the market matures, the number of products increases, and regulation gradually becomes clearer in some jurisdictions.

This is believed to be the reason for the bitcoin price soaring, but recent actions hint that the involvement of large players could be a double-edged sword.

The faster recovery in the rest of the market "speaks to the overwhelming level of institutionalization of bitcoin over the previous 12 months, as well as independent market dynamics for the rest of the cryptocurrency," Farrell said.

In other words, bitcoin suffers adversity precisely because of heightened regulation, while other coins have so far escaped this fate.

This scenario represents a notable turn of events for a cryptocurrency that bulls advertise as a store of value and which has been found to be less susceptible to larger falls than ether (based on Cornerstone Macro analysis). But as institutions begin to use Bitcoin, whether as part of a broader asset allocation strategy or otherwise, it is clear that flows could start to affect cryptocurrency as well. BTC-related payments are becoming more transparent due to the linkage to bank and customer accounts.

"Ether, in general, has been more associated with the growth of crypto sub-sectors such as Decentralized Finance (DeFi) and Non-Fungible Tokens (NFT) than with inflation-defended trading, so the Fed's hawkish demagogy did not affect it as negatively," says Stephane Ouellette, chief executive and co-founder of FRNT Financial Inc, and it is difficult to disagree with him.

Such a combination leads to an increase in the influence of macroeconomic factors on Bitcoin, which do not cause panic in the field of fiat currencies. According to Farrell, the growing institutionalization of the largest cryptocurrency "may explain why there was such a surrender in the bitcoin markets on Friday night - as traditional institutions seek to maintain annual profits until the end of the year."

Indeed, on the eve of the end of the fiscal year and the payment of dividends/holiday premiums, many companies are limiting stock transactions with risky assets, preferring to return to stock games after reports and the Christmas holidays. The desire to close the year in positive territory makes the companies be more careful.

Overall, the weekend plunge is another reminder that cryptocurrencies are an emerging asset class and their path is difficult to predict.

However, Ether has grown more than fivefold since the start of the year, and bitcoin is up roughly 70% compared to the 20% rise in the S&P 500 and 11% in the MSCI for all countries. The Bloomberg Barclays Global Aggregate Bond Yield Index is even negative. In other words, tokens are still the most attractive asset class for exchange players, and so far this trend remains the leading one.

Interestingly, about 55% of the crypto market is accounted for by new players, which means that the influence of "whales" is overestimated.





Egor Danilov
Analytical expert of InstaForex
© 2007-2021

[IFX_Selena]

BTC analysis for December 06,.2021 - Potentilal for the downside continuation

Technical Analysis:



BTC has been trading downside on Friday and see potential for another downside cycle.


Trading recommendation:
Due to strong selling in the background, I see potential for the downside continuation after the rally.

Watch for selling opportunities on the rallies with the downside objectives $46,485 and $42,150

Stochastic is showing neutral stance.

Resistance level is set at the price of $49,715






Petar Jacimovic
Analytical expert of InstaForex
© 2007-2021