Bitcoin. Correction continues, have bulls exhausted their potential?
April 25, 2023 5:22 am
Bitcoin has quite doubled in value and reached the $30,000 mark. However, it stopped rising, and at this time, Bitcoin is correcting. In any case, don’t think that the bullish trend is over, even if you abstract from all the “crypto gurus” who constantly talk about $100,000 as something inevitable. Currently, Bitcoin has only depreciated by about $3-3,500, which indeed is a mere correction or pullback. It has not yet reached any important line or level, for example, Senkou Span B on the 24-hour chart, trend line, or the $24,350 level. Thus, it may continue to fall, and it still doesn’t mean that the bullish trend is over.
At the same time, we repeatedly ask ourselves what exactly was behind Bitcoin’s impressive growth recently? The fact is that it all started with the US inflation report for January and ended with the US inflation report for March. It was after these two reports that the first and last growth spirals of the cryptocurrency were shown. It should be understood that inflation itself has no effect on Bitcoin. Many “experts” have long argued that Bitcoin is a hedge against inflation, forgetting that in many developed countries (where the largest number of crypto investors are concentrated), inflation in normal times does not exceed 2%. What should we protect ourselves from? When inflation began to rise and remained at a super high level, Bitcoin’s price was falling rather than growing. Therefore, there has never been any correlation between inflation and the cost of Bitcoin.
Bitcoin remains simply an investment instrument with high volatility and high potential profit. So what prompted traders to become more active a few months ago? Only rumors that the Federal Reserve would soon end its tightening of monetary policy. However, the Fed rate is still rising. It turns out that the crypto community has reacted to an event that hasn’t even happened yet. Moreover, it should be understood that the end of the tightening cycle itself does not benefit Bitcoin. Only a decrease in the rate can stimulate its growth, as the yield of safer assets will start to decline. It turns out that we are already observing the market’s reaction to future Fed rate cuts, which will not happen until at least 6-7 months from now, in a best-case scenario.
On the 24-hour chart, Bitcoin has begun to correct and has consolidated below the $29,750 level and, no less importantly, below the 100.0% Fibonacci level. These two levels represent a support (or resistance) area, the overcoming of which allows for movement in the corresponding direction. Therefore, we believe that small sales are now appropriate, targeting around the $24,350 level.
The material has been provided by InstaForex Company – www.instaforex.com
Bitcoin has quite doubled in value and reached the $30,000 mark. However, it stopped rising, and at this time, Bitcoin is correcting. In any case, don’t think that the bullish trend is over, even if you abstract from all the “crypto gurus” who constantly talk about $100,000 as something inevitable. Currently, Bitcoin has only depreciated by about $3-3,500, which indeed is a mere correction or pullback. It has not yet reached any important line or level, for example, Senkou Span B on the 24-hour chart, trend line, or the $24,350 level. Thus, it may continue to fall, and it still doesn’t mean that the bullish trend is over.
At the same time, we repeatedly ask ourselves what exactly was behind Bitcoin’s impressive growth recently? The fact is that it all started with the US inflation report for January and ended with the US inflation report for March. It was after these two reports that the first and last growth spirals of the cryptocurrency were shown. It should be understood that inflation itself has no effect on Bitcoin. Many “experts” have long argued that Bitcoin is a hedge against inflation, forgetting that in many developed countries (where the largest number of crypto investors are concentrated), inflation in normal times does not exceed 2%. What should we protect ourselves from? When inflation began to rise and remained at a super high level, Bitcoin’s price was falling rather than growing. Therefore, there has never been any correlation between inflation and the cost of Bitcoin.
Bitcoin remains simply an investment instrument with high volatility and high potential profit. So what prompted traders to become more active a few months ago? Only rumors that the Federal Reserve would soon end its tightening of monetary policy. However, the Fed rate is still rising. It turns out that the crypto community has reacted to an event that hasn’t even happened yet. Moreover, it should be understood that the end of the tightening cycle itself does not benefit Bitcoin. Only a decrease in the rate can stimulate its growth, as the yield of safer assets will start to decline. It turns out that we are already observing the market’s reaction to future Fed rate cuts, which will not happen until at least 6-7 months from now, in a best-case scenario.
On the 24-hour chart, Bitcoin has begun to correct and has consolidated below the $29,750 level and, no less importantly, below the 100.0% Fibonacci level. These two levels represent a support (or resistance) area, the overcoming of which allows for movement in the corresponding direction. Therefore, we believe that small sales are now appropriate, targeting around the $24,350 level.
The material has been provided by InstaForex Company – www.instaforex.com
Related Posts: