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Day X for the cryptocurrency market: how will bitcoin react?

The US Senate vote on the infrastructure bill will take place today, August 10. The issue of an amendment regarding the concept of "broker", on which the influence of the law on the cryptocurrency market depends, has not been resolved. A volatile market reaction to the adoption of the final version of the document is not excluded.

Meanwhile, on-chain analysts continue to monitor the activity of major market participants and look for signals about the further direction of the main cryptocurrency.

Ki Young Ju, CEO and co-founder of online analytics data provider CryptoQuant, shared a graph showing the sharp surge in the bitcoin exchange's whale ratio in August.

On his Twitter account, he wrote that this ratio has reached a whopping 90% - the highest level since February 2020.

A similar ratio was observed until March 13, 2020, when Black Thursday occurred - the price collapsed, and bitcoin fell under a massive sale. It then lost more than 50 percent of its value in one day, briefly dropping below $4,000.

What does the mentioned ratio of all exchange whales show? It analyzes the relative size of the ten largest BTC inflows as well as the total inflows. The rise in the number of this indicator means that the pressure from the crypto-whales is growing.

Ki Young Ju urges traders to be careful not to use too much leverage for their long bitcoin positions.

But there are other data as well. The analytical company Santiment notes that the number of bitcoins stored on cryptocurrency exchanges has decreased. Moreover, it reached its lowest level in 26 months.

Santiment experts remind that the low balance of bitcoins on exchanges usually prevents large sell-offs. Therefore, the 26-month low of the stock exchange offering for the main cryptocurrency should be interpreted as a sign of confidence for bitcoin investors.

Let's move on to the chart and analyze the technical growth probability. Bitcoin has been strengthening for six straight trading sessions, resulting in an almost recoilless break of strong resistance at 41,980.24. The next local level at 44,807.24 (red dotted line) was also broken yesterday, but today's attempt to gain a foothold above it looks uncertain.

And if today's daily candle turns out to be bearish and even closes below the level of 44,807.24, a stronger pullback can be expected.

The level of 41,980.24 can still be confirmed as a support, and the likelihood of temporary trading in the sideways range of 41,980.24 - 44,807.24 is also possible.

Local growth remains a more optimistic scenario, if the consolidation above the level of 44,807.24 still occurs. The target for growth will be located at the mirror level of 48,178.13.

Interestingly, popular crypto trader Pentoshi notes that the main cryptocurrency will not stop after it can pass the $48,000 level. He claims that this is the last point before "bitcoin becomes unstoppable."

Now both the technical picture and the on-chain data are warning crypto traders to exercise caution. Voting on the infrastructure bill also looms over the market as a factor of uncertainty.

Against this background, if you open long positions now, then be very careful. The current situation could be the beginning of an advantageous position to buy BTC/USD with a good risk/reward ratio. Or it will turn into a trap, but there is a stop loss to protect against this risk.

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The material has been provided by InstaForex Company - www.instaforex.com