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Good afternoon, colleagues currency and cryptocurrency speculators!
Digital assets – the youngest and most promising market, which leads to some problems in trend analysis. High volatility pairs creates a lot of false signals of technical indicators, and the lack of a single centre of trading and the large number of trading venues lead to the difference in prices and errors in technical analysis.
In this article we will try to understand how it is possible to predict the course of one of the most popular CryptoStream — Bitcoin — with the help of Yuan, cunning tactics, which are still little known.
Fundamental analysis for cryptocurrency is just beginning to emerge, Bitcoin and altcoins in different ways and respond to often unpredictable economic and political news in connection with the stock market and Forex currencies until there are no more subtle way.
the Most accurate indicator predicting the growth rate of digital assets, the flow of investment. Constantly observing this value, the trader can easily find moments of growth investments which will ensure the medium-term trend of Bitcoin for a few days.
With such information, it is easy to determine the entry point by choosing a "far" stop loss whose value can be reduced on the next day up to the breakeven level. Large infusion of capital into the cryptocurrency market will cause the pampas of the Bitcoin exchange rate on the day of the transaction.
this information is impossible to obtain legally, this required to get these finances Fiat, large clients of bitcoin exchanges and brokers, which according to company's strategy tend to hold, and not engaged in active speculation. In many countries, such information belongs to the category prohibited inside, not to mention the fact that the sale of personal information illegal in itself.
In fact there is no need to hire hackers or bribe the staff of the exchange, the big players operate on a large amount of capital, which because of its size, "leaves traces" enough for analysis. It is important to know in what direction and what to look for: for the forecast of course we need to watch China carefully and to observe the fluctuations of the yuan.
the Facts and factors of China's influence on Bitcoin value
Research portal crimestatistics LongHash noted a unique feature of the market digital assets. Unlike many financial and commodity instruments as well as currency Forex, the most active period of trading Bitcoin falls to the opening and operation of the Asian exchanges.
note on the chart where a histogram is represented hourly variations of price ranges, is taken as the average values of trading sessions, built over a period of two years. The large and sudden fluctuations occur in the period from 24 to 2 UTC, which corresponds to the period from 3 to 5 hours GMT.
By this time, exchange USA closed, although it was during the period of the American sites formed the majority of trends Forex, stock indices and commodity futures. Indeed, cryptocurrencies often do not show strong response to changes in interest rates, the fed, the GDP of developed countries, but may over-react to Asian statistics, surpassing the yen, the leader of volatility among major currencies Forex.
Among Asian countries the greatest influence on Bitcoin still has China. Until 2017, the year the superiority of this country in cryptocurrency trading was obvious, it was enough to evaluate the trading volume of the national kryptomere.
the Paradox of Bitcoin mining in China
Two years ago the Chinese authorities decided to ban Bitcoin and altcoins, which allow you to anonymously and freely withdraw funds abroad. The country is totally controlled, strictly reglamentary and restricts any external transactions and even investment companies.
Followed unofficial ban has led to complete disappearance in mainland China bitcoin exchanges. The company transferred a business in Hong Kong, Singapore and offshore, greatly reducing the volume of trades. Chinese businesses are now directly or indirectly involved in buying Bitcoin because of the risk of being black listed and lose the opportunity of banking services.
there is a paradoxical situation, as China retained the lead in the BTC mining: the state's share accounts for 18 of the largest pools with a daily production of coins at $ 11 million.
it is Difficult to assume that none of them is selling mined Bitcoin, or that the local big business, having an extensive network of branches and offices around the world, not embedded in the digital assets.
After the unspoken taboo of authorities investment in digital assets ceased to go directly, no one can argue with the Communist party of China, after the call where the turnover of the BTC/CNY has virtually disappeared from exchange offices. Data for such a pair, in principle there is the world wide web is the Internet is that hypothetical or calculated values using the cross rates in the Forex market.
In the Bank of China is a letter requiring you to identify and report about direct investments by the clients of the yuan in the currency, however, dollar buying was not forbidden. This asset became a facilitator for the acquisition of Bitcoin, which is the main demand.
the Chinese track and stabilini
, as well as Chinese banks, it is impossible to reliably keep track of what percentage of exchange of the yuan for dollars went to investment in the digital currency, if not one feature of the stock market, where you can find traces of these investments.
In 2016, the year the company Tether, affiliated with the cryptocurrency exchange Bitfinex, has invented a unique thing stablon. It is a token produced by any reliable blockchain, the exchange of which is guaranteed by the Issuer on a strict course.
the Tether to change Fiat dollars into cryptolog USDT linked 1 to 1, putting the resulting cash into an interim Fund. On the one hand, the issue of the token can be easily verified because they were tied to the Bitcoin blockchain, on the other — they can always be changed back, getting Fiat out of the Fund, also 1 to 1.
the Coin was first implemented on bitcoin exchanges, which would not be linked to the national currency, to avoid the claims of the regulators. Tether later became widespread in the US, where traders changing one scriptactive on the other, could not pay taxes.
the Above developments have raised the demand for stablon, but as you can see from the graph the capitalization USDT, he crossed the first billion in 2018.
At this point, the exchange of cryptocurrency in the United States owned a share of 39% of the turnover token, the rest of the world accounted for 48%. Kriptolodzhika China at maximum speed at the moment of sunset (fourth quarter 2017) "consumed" only 12% USDT.
Cryptogramophone analytical Agency Weis has collected statistics of quarterly changes in the interest of the Chinese traders to Tether USD. Along with the growth of capitalization stablon China captured most of the trade turnover and continues to increase in 2019.
Figure share of 62% eloquently explains why Bitcoin and altcoins — the world's only financial assets which are more responsive to the events of the Asian session, and is also directly linked with statistics of the PRC and monetary actions of National Bank.
the yuan is not related to freely convertible currencies: 2% from the rate of the Central Bank — is the maximum allowable for banks and stock exchanges. Trends in USD/CNY is fully "handmade" and are subject to the current objectives of monetary policy of the Central Bank.
Like any artificial structure, the cost curve of the yuan does not fit the "natural background" of the Forex market, so it is difficult to predict the rate of Bitcoin. Of course, cryptocurrency is growing as a weaker yuan, but the same reaction will cause the strengthening of the national currency.
Both processes are easily explainable fundamentally. First national Bank wanted to create a damper, weakening the effect of an increase in duties from the US and lowering the rate, and at the moment, the financial regulator wants to slow down credit activity, when the external debt of China doubled the value of U.S. debt.
the exchange Rate USDT/CNY is not subject to "orders" of the Central Bank, the value of the yuan in cryptoderk determined by market bidding. It was shown above that changing the Tether CNY in USD, investors are pursuing only one goal – to invest in Bitcoin and altcoins.
Comparing the cost and dynamics of the two yuan to USD and USDT, it is possible to draw unambiguous conclusions on the future growth or continuation of trend Bitcoin.
the Methods of predicting Bitcoin exchange rate for the Renminbi
the First method of forecasting the future trend of the BTC is the constant monitoring of the Renminbi to the USDT on the OTC market (OTC).
the Most liquid platform for buying sale USDT for CNY is a platform Huobi.
Opening the information Desk of the company for the first three sentences, you can get information about the current value of the yuan.
Compare it with Forex quotes that you can get in Metatrader 4 or any financial application like Google.
the Positive difference in the spread (the cost CNY per USDT) above 1% would indicate a medium-term uptrend, above the 3% — risk buy and a high probability of a correction (overbought), of equal value, or negative spread – medium-term drop in BTC.
the Measurement should be carried out after 5 am GMT on the daily values of the yuan. In the overbought sell dangerous: while negative news spread can reach 10%, but the correction is a flat and fast replaced by a continuing growth in value of Bitcoin.
to Determine the differences visually will help you combine the two charts of the USD/CNY and USDT/CNY, you can find on the exchange GATE.IO. In this case it is not necessary to look at the price, will only fit a graphical comparison of closed daily candles.
the Divergence should be positive, the exchange rate USDT the yuan should rise, while the USD/CNY to fall, is a signal to buy BTC.
it is Desirable that it was first found divergence; if the trade went negative, and the divergence continues, is to hold the position another day, but putting a previous transaction on the closing price of entrance.
the reliability of the signal determines the size of the discrepancy: if one of the graphs formed "the candle" candles (small bodies and short tails), then these patterns should not be taken into account.
Despite the fact that the exchange GATE.IO uses the services of the portal TraingView to plot the results of trading, it is impossible to access to the service outside of the online terminal site, which leads to some inconvenience in the analysis.
the User is unavailable comparison tools financial instruments on the same chart, so he alone will have to combine three Windows: USDTCNYX site GATE.IO USDTCNY and BTCUSD from the Metatrader 4 platform.
to compare the instruments and to detect divergence:
1. Open the website of the exchange Gate.IO, select left tab market CNYX (1) and press the line USDT (2) to get a graph of pairs that can be displayed in full-screen mode (3).
2. In the Metatrader 4 find in the list of symbols and USDTCNY BTCUSD pair to display their graphics.
3. Align the three Windows together, synchronizing manually daily candle. Remember the absence of trading during the weekends in USDCNY tool — these days will have to pass.
the Goal of the trader to detect the positive divergence (its beginning) to enter and hold long for Bitcoin mining.
Reverse (negative) divergence USDTCNY and USDCNY can help in the correction prediction, but speculative shorts in BTCUSD open is not worth it. Cryptocurrency in the period of the long-term trend has a high volatility at the points of reversal, leading to frequent triggering of stop losses.
the Theme of cryptocurrency appeared 10 years ago, stock exchange rules began to take shape in 2014. Each new year brings many changes and new innovative discoveries in the field of blockchain. It should be recognized that it is impossible to accurately determine the class of these tools: they are similar to currency, but also have characteristics of "digital gold" or shares, if we consider process mining as a dividend.
the Amorphous classification and dualism lead to the fact that the price of Bitcoin can follow indices may suddenly crumble on the rise in the dollar or rise with him on the cause of global economic problems.
All this complicates forecasting methods, selection and search tools. Found the options "today" can reliably predict trends, and "tomorrow" will not be consistent with the market trends.
Discuss on forum
With respect, Alexey Vergunov
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