Forex analysis review
Forex analysis review |
- Miners can collapse bitcoin quotes, but the US government is rushing to the rescue of "digital gold"
- The vast majority of institutional investors plan to increase their investment in bitcoin
- Trading plan for the GBP/USD pair for the week of March 15-19. New COT (Commitments of Traders) report. The pound continues
- Trading plan for the EUR/USD pair for the week of March 15-19. New COT (Commitments of Traders) report. The bulls persistently
| Miners can collapse bitcoin quotes, but the US government is rushing to the rescue of "digital gold" Posted: 13 Mar 2021 03:13 AM PST
While bitcoin continues to rise in price, there is still talk about when the growth of "digital gold" will stop. All traders want to fix the maximum profit, but the "small fish" no longer have the same impact on the "cue ball" rate as a few years ago. Simply put, bitcoin is now being bought by large investors who can afford to keep bitcoin in their portfolios for years, thus keeping the value of the asset at a high level. Small traders chase profits, large institutional investors invest their funds for the future. Thus, we may never see the collapse of quotes by 80-90%, as it happened before. According to research by analyst Philip Swift, all the recent corrections were caused by the fact that miners sold the extracted bitcoins, which reduced the value of the cryptocurrency. In his analysis, Swift refers to the Puell Multiple indicator, which is calculated as the ratio of the value of the extracted bitcoins to the average value of the asset value over the past year. After reaching the maximum profit levels, sales follow, which provokes a correction in the value of the "cue ball". However, the nature of supply and demand for bitcoin has been changing in recent years. If earlier miners immediately sought to get rid of bitcoin, now more and more mining pools sell only a certain part of the extracted "bits". If a few years ago, few believed that bitcoin would continue to rise in price in the long term and sought to make a profit as quickly as possible, now that the mark of $ 100,000 per coin no longer seems fantastic, many are in no hurry to part with the "cue ball", the supply of which is very limited in the market. It should also be noted that a large share of the mining market is now made up of large pools, and not single-player mannerisms. These pools can simply afford to hold the extracted bitcoins. Thus, potentially, in the event of a sale of a certain share of "bits", the rate of "digital gold" is unlikely to go to zero. Various studies show that more than $ 1 trillion was accumulated by Americans during the pandemic. It is expected that this money will be spent in 2021, as the situation with the "coronavirus" is slowly improving, vaccination is in full swing, and the economy is recovering. Thus, experts believe that the propensity of Americans to thrift and save will decrease in 2021, therefore, a certain part of the accumulated funds may flood into the stock, debt, or cryptocurrency market. Thus, the demand for the "cue ball" in 2021 may also grow due to new institutional investors, as well as due to the influx of "hamsters". The material has been provided by InstaForex Company - www.instaforex.com |
| The vast majority of institutional investors plan to increase their investment in bitcoin Posted: 13 Mar 2021 03:13 AM PST
Bitcoin continues to grow. During the trading on Saturday, it broke its previous high, exceeding the value of $ 59,000 per coin. In the next few hours, the cost of one "cue ball" may exceed $ 60,000. Thus, the decline in BTC quotes a couple of weeks ago turned out to be a banal correction, and the markets show with all their appearance that they are going to continue investing in bitcoin. Although bitcoin has a fairly large number of factors to stop the growth, so far traders and investors take into account only those factors that speak in favor of continuing growth. This is confirmed by various opinion polls among investors, which show that interest in the "cue ball" is growing and is likely to remain high until the global economy stabilizes. For example, according to the Nickel Digital cryptocurrency fund, about 40% of institutional investors purchased bitcoin to protect against inflation (which, by the way, is not growing at a high rate in America). More than 85% of investors plan to increase their investments in cryptocurrencies over the next two years. About 56% of respondents believe that the growth of the "cue ball" will not be so strong, but it will continue. We also recall that earlier similar opinion polls were conducted by the investment bank Goldman Sachs. The results of this survey showed that the bank's customers believe that bitcoin will not fall below $ 40,000 per coin in 2021. About 40% of the surveyed clients own digital assets, and about 60% of the respondents believe that bitcoin will continue to rise in price. Thus, the mood of large investors can be considered positive, which probably gives strength to bitcoin. Inflation in the United States, as in the rest of the world, may indeed jump in 2021, given the trillions of dollars and euros that have been poured into the economy. Against the background of investors' fears for inflation, the yield of treasury bonds in the European Union and the same States is also growing. Thus, at the moment, it is still possible to conclude that it is the global changes in the economy over the past year that have caused the strong growth of bitcoin.
As for the technical picture, the important support area of $ 43,000 - $ 44,000 stood, however, there was only one test of this area. So now everything looks very clear and understandable. Traders have slightly adjusted the "digital gold", now you can start a new wave of asset purchases. Thus, according to the Ichimoku system, the upward trend remains, and the price has already overcome the previous high, and at the same time the resistance level of $ 58226. Consequently, the growth of quotes of the "cue ball" is likely to continue in the near future. Fundamental factors still speak in favor of bitcoin, but no one knows when a new wave of sales of the crypto asset will begin. Therefore, you should never forget about Stop Loss. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 13 Mar 2021 03:13 AM PST GBP/USD - 24H. The GBP/USD currency pair has adjusted by 450 points over the past two weeks, however, this downward movement looks ridiculous compared to even the last round of the upward movement, which took five months. On the 24-hour timeframe, the quotes of the pound/dollar pair managed to gain a foothold only slightly below the critical line, however, this week they have already returned to the area above this line. Thus, if the European currency has adjusted quite seriously against the dollar in the first two months of 2021 and now has the full moral right to start a new upward trend, then the pound sterling has adjusted again "for a show". We are tired of wondering why the pound has grown so much over the past year and, most importantly, why it can't even adjust normally. This is a rhetorical question. The main thing is that the trend persists and it seems that the "speculative factor" plays an important role in its formation. One way or another, but at this time, the upward trend can be considered renewed. Therefore, in the near future, the bulls may try to return the pair to 2.5-year highs near the level of 1.4240 and update them. COT report. During the last reporting week (March 2-8), the GBP/USD pair fell by 100 points. Although the British currency has been declining in the last two weeks, it is unlikely that anyone can now conclude that the upward trend has ended. In principle, the illustration above shows everything perfectly. Moreover, just in the last 5-6 weeks, professional traders are actively buying the pound. This is indicated by the green line of the first indicator, which shows the change in the net position of a group of "Non-commercial" traders. At the same time, the Commercial Group is increasing sales contracts. And this behavior of the two main groups of traders is the main sign of a strong trend. Thus, we see the strongest uncorrelation of the two main pairs. If the European currency has been adjusted for two and a half months, the pound has not. If the COT reports on the euro indicate a weakening of the "bullish" mood, then the COT reports on the pound are saying the opposite. Thus, the main thing now is not to try to assume that the pound and the euro will move in the same way, as is often the case. Unfortunately, there are no unambiguous factors for why the euro and the pound are moving differently now. After all, if they are not correlated, it means that in the Eurozone or the UK, there are now global factors that have a strong impact on one or the other currency. The UK is now receiving one negative, but the pound is growing much stronger than the euro. Could there be a problem in the Eurozone? But there's not much disappointing news coming in from there. Well, is it worth saying that the euro and the pound did not react equally to the growth factor in the yield of American treasuries? Thus, in general, we believe that the COT reports on the pound speak in favor of continuing the upward movement. During the current week, there were almost no interesting events in the UK. At the beginning of the week, the Chairman of the Bank of England, Andrew Bailey, made a speech, which did not tell the markets anything interesting. Only on Friday, several rather important reports were published in the Foggy Albion, which should have supported the pound, but, instead, put pressure on it. Although it would be better to say that this statistic was again ignored by the markets. More attention was paid to the American statistics, however, the statistics themselves were even less. The markets were interested in the inflation report on Wednesday, but how should it be interpreted if the main indicator rose from 1.4% y/y to 1.7% y/y, and the base indicator, on the contrary, fell from 1.4% y/y to 1.3% y/y? Thus, it is extremely difficult to determine which fundamental factors currently affect the pound/dollar pair in general. Based on the growth factor of the money supply in the US, we believe that the pound may well continue its growth although there was no normal correction, or that the pound is very much overbought. However, as before, we recommend always trading according to the technical picture. Trading plan for the week of March 15-19: 1) The pound/dollar pair has returned to the area above the critical line on the 24-hour timeframe, so now the upward movement is again relevant. However, at the same time, on the lower timeframes, the new upward trend does not look too convincing yet. Therefore, if the pair returns below the Kijun-sen line, it will mean a new attempt by the bears to correct it in the long term. 2) Sellers seem to have let the initiative out of their hands, but at the same time, on the hourly and 4-hour timeframes, the bullish trend looks very ambiguous due to Friday's fall "out of the blue". Thus, the technical picture is very ambiguous at this time, and all timeframes allow for different movement options in the near future. Explanation of illustrations: Price levels of support and resistance (resistance/support) – target levels when opening purchases or sales. You can place Take Profit levels near them. Ichimoku indicators, Bollinger Bands, MACD. Support and resistance areas – areas from which the price has repeatedly bounced before. Indicator 1 on the COT charts – the net position size of each category of traders. Indicator 2 on the COT charts – the net position size for the "Non-commercial" group. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 13 Mar 2021 03:13 AM PST EUR/USD - 24H. After two weeks of almost a collapse of the euro/dollar pair, the bears finally took a break, which allowed the quotes to move slightly up. However, although we have repeatedly concluded that the US currency is very likely to weaken in 2021, it should be recognized that at the moment there is a clear downward trend. The pair's quotes, after failing to overcome the upper line of the Ichimoku cloud and the resistance level of 1.2225, began a strong downward movement. Fundamentally, this movement was justified by the growth in the yield of US government bonds. We are inclined to the option that before a new round of the upward trend, which will be triggered by a new 2 trillion "helicopter money" in the United States, traders decided to simply adjust the pair deeper, in particular, to buy it as cheap as possible. Thus, in technical terms, we are still looking in the direction of an upward trend. But at the same time, we would also like to remind you once again that any expectations and assumptions must be confirmed by specific technical signals. Without confirmation, all speculations about the future movement of the pair are just hypotheses. Fixing the price above the critical line will be the first signal for the formation of a new round of upward trends in the 24-hour timeframe. COT report. During the last reporting week (March 2-8), the EUR/USD pair fell by 200 points, which is quite a lot for it. However, in general, even taking into account such a fall, the upward trend is still visible. Thus, so far, it is still not necessary to talk about an unambiguous change in the trend to a downward one in the global plan. Recall that in recent weeks, the mood of major market players has become much more "bearish", as the total number of contracts for buying decreased by 20 thousand, and contracts for selling – increased by 30 thousand. If earlier there was a difference of three times between these figures, now it is two times with the advantage of the first. In other words, professional traders over the past 5 weeks have begun to believe less that the growth of the European currency will continue. As for the reporting week, the group of "Non-commercial" traders continued the trend of recent weeks. Major players closed 14,000 buy contracts and opened 12,000 sell contracts during this week. Thus, the net position for this group of traders increased by 26 thousand at once, and the mood of the group became much more "bearish". The latest COT reports speak almost unequivocally in favor of the fact that the market mood is changing to a downward one. The indicators also signal a very likely break in the previous trend, as the green and red lines of the first indicator continue to move towards each other. From our point of view, only one global factor can prevent this – it is the factor of new potential growth of the US money supply by $ 2 trillion. This week, there were many interesting fundamental and macroeconomic events. Most of the time, market participants continued to track the yield of American treasuries, and only by the end of the week, interest in this indicator decreased. At the very beginning of the week, the eurozone published a GDP indicator that was slightly higher than the previous estimate, and in the middle of the week, the results of the next ECB meeting were summed up, during which it was decided to accelerate the purchase of assets from the open market under the PEPP program. There were no important speeches this week, but in general, the "foundation" and "macroeconomics" had a very indirect impact on the movement of the currency pair. We still cannot conclude that traders are now trading based on one or two factors that, as they say, lie on the surface. Take at least the factor of the yield of 10-year treasuries, which rose again on Friday and exceeded the previous high, amounting to 1.623%. The US dollar rose in price yesterday in the European trading session, and in the US – it was cheaper, although a couple of days ago, it grew in all trading sessions and the markets wonderfully explained this by the growth in the yield of treasuries. In general, now it is worth paying attention to all the factors and looking for technical confirmation of them. Trading plan for the week of March 15-19: 1) On the 24-hour timeframe, the whole technical picture is confused. The pair could have started a new round of the upward trend from the 50.0% Fibonacci level that was reached a couple of weeks ago, but instead decided to complicate the correction trend that began earlier this year. Thus, formally, there is now just a downward trend, so it is recommended to consider buy orders not earlier than overcoming the critical Kijun-sen line. On the lower timeframes, it is allowed to consider the upward trends earlier. 2) In fact, we can now conclude that a downward trend has begun. However, there are a lot of factors that can now influence the exchange rate formation of the euro/dollar pair, and many of them speak of opposite directions of movement. Thus, it is recommended to trade downwards now, using lower timeframes, because there is a clear trend. But it should be remembered that from a fundamental point of view, the probability of a new and strong fall in the US currency in 2021 is high. Explanation of illustrations: Price levels of support and resistance (resistance/support) – target levels when opening purchases or sales. You can place Take Profit levels near them. Ichimoku indicators, Bollinger Bands, MACD. Support and resistance areas – areas from which the price has repeatedly bounced before. Indicator 1 on the COT charts – the net position size of each category of traders. Indicator 2 on the COT charts – the net position size for the "Non-commercial" group. The material has been provided by InstaForex Company - www.instaforex.com |
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