On the 4-hour TF, bitcoin was in an upward movement for a short time. Already today, it has started a local collapse and in the coming hours, it may return to the level of $18,500, around which trading has been taking place in recent months. We believe that this is a logical development since bitcoin diligently ignored the meetings of the Bank of England, the Fed, and the ECB, which have been actively raising rates recently. Thus, the logic is simple: the higher the rates, the higher the yield of the safest assets, such as treasury bonds and bank deposits. Given that bitcoin has only been falling in price over the past 12 months, it cannot now be used as a protective asset or as a means of hedging inflation. Considering that bitcoin has been "at the bottom" for 5 months, and investors are still in no hurry to buy it "at a very favorable price," we conclude that the market believes in a more powerful drop in the "bitcoin." Recall that each upward trend ended with a drop of 80-90%. So far, bitcoin has fallen by only 70%.
Recently, many "experts" advised buying bitcoin or gold at the dawn of a new global financial crisis, believing that it is bitcoin that can save capital. However, we believe that bitcoin is the riskiest and most unstable asset, even despite its relative stability of value in the last 5 months. For example, American stock indices lost about 30% in 2022, and bitcoin – 70%. Where is that notorious stability? It should also be remembered that behind stocks and indices are real companies, real production, assets, real estate, business, the possibility of creating profits, and so on. Stocks simply cannot fall in price to zero, but bitcoin, which does not have any real assets behind it, may well. Of course, now few people can believe that the first cryptocurrency is capable of falling to, for example, $ 1,000. However, it is quite capable of a stronger fall than what we have already seen. We still believe that as long as the Fed raises rates and as long as they are at a high level, it is not necessary to count on the strong growth of the "bitcoin." Perhaps it will start to rise when rates start to decline, which we expect not earlier than in a year.
On the 4-hour timeframe, the quotes of the "bitcoin" continue to move inside the side channel. We believe that the decline will resume in the medium term, but we need to wait for the price to consolidate below the $17,582-$18,500 area. If this happens, the first target for the fall will be a level of $12,426. Bounces from the level of $18,500 (or $17,582) can be used for small purchases, but be careful – we still have an absolute flat.
