27.01.202207:25 Forex Analysis & Reviews: Crypto market update for January 27, 2022

Bitcoin's price has been rising throughout the previous day, but this movement was already expected. The quotes left the lows reached after failing to break through the level of $34,238, which corresponds to 50.0% Fibonacci. Moreover, the formation of the downward trend section might be completed at this time. If so, Bitcoin will start building a new upward trend section. Within its framework, it can easily grow by $20-30 thousand even if the trend section will also be three-wave, that is, corrective. However, it is also assumed that the current section of the trend can be transformed into an impulse one, that is, into five waves. If this happens, Bitcoin can be expected below $ 30,000. But as we can see, everything looks as if the correction has already ended and there will be an increase. However, we do not urge traders to rush to conclusions. It is necessary to wait until at least a day has passed since the announcement of the FOMC results. After that, we can monitor the movement of Bitcoin, and then draw conclusions.

• The IMF is calling on El Salvador to abolish Bitcoin's status as a means of payment

The International Monetary Fund has appealed to the El Salvadorian authorities to reverse their decision in making Bitcoin an official means of payment. The IMF noted that there are huge risks to financial stability and consumer protection when using cryptocurrency. They said that the country was recovering from the pandemic fairly quickly, but at the same time expressed concern about the desire to issue bonds worth $ 1 billion, which will be backed by Bitcoin.

It can be recalled that the President of El Salvador, Nayib Bukele, is going to raise $ 1 billion through bonds, which will be used to build Bitcoin City – a city whose residents will be completely exempt from paying all existing taxes. Bukele stated that this city will only use geothermal energy sources and be completely environmentally friendly. It is still unknown what other states of the world think about this initiative. However, El Salvador may default instead of building a "Bitcoin City". The country's international debt is $800 million and the country was counting on receiving a loan from the IMF. The IMF does not support the status of Bitcoin as a means of payment and does not want to issue a loan until the country's authorities change their decision. Earlier, the fund stated that the Fed's rate hike would hit countries with low incomes and high levels of debt in US dollars hard. El Salvador fully fits this definition.

The formation of the downward trend section and its downward wave c continues. An unsuccessful attempt to break through the level of $34,238, which corresponds to 50.0% on the upper Fibonacci grid, allowed the quotes to start leaving the lows reached. However, it is still too early to talk about the end of the downward trend and its wave c. This wave could continue its construction with targets near $29,117 and $26,991, which equates to 0.0% and 61.8% Fibonacci. But inside wave c, an internal corrective wave can be built. So far, the internal wave counting of the expected wave c does not give us a chance to conclude the timing of its completion, as clear waves are not visible inside it. But since the corrective set of waves a-b-c looks quite complete, the option of building a new upward trend section can be considered. However, the news background for the cryptocurrency market remains extremely weak especially amid news about the tightening of monetary policy this year by many central banks around the world.