28.01.202207:28 Forex Analysis & Reviews: Crypto market update for January 28, 2022

Bitcoin tried to break through the level of $37,541 yesterday, which equates to 23.6% on a small Fibonacci grid. This level is not too strong, but the attempt was still unsuccessful. However, the news background prevented the first cryptocurrency to recover. As mentioned more than once, Jerome Powell provided the markets with new hawkish statements yesterday, almost promising to raise interest rates at every next meeting in order to continue to fight high inflation. This kind of news is a setback for Bitcoin because first, it has been used by investors as an inflation hedge in recent months. If inflation drops to the 2% target, then Bitcoin will lose this support factor. Second, the Fed promised to raise interest rates, and tighter monetary policy has always had a negative impact on risky assets and instruments, which are the first to decline during those times. If the Fed raises rates, then the rates on deposits and other low-risk safe havens will rise. And they will begin to flow capital. The Fed has set a course to normalize monetary policy, so many investors are now not willing to take risks.

• Arthur Hayes predicts Bitcoin to fall to $20,000

Almost every day, new forecasts and promises for Bitcoin enter the market and the media. Any self-respecting trader, investor, and analyst considers it his duty to share his vision of the situation with the market. If we discard the forecasts of $100,000 in the next few months, which can already be combined into one group for the purpose of further ignoring, then there are not so many other forecasts. It is worth noting that more participants in the crypto space point in favor of the fact that the cryptocurrency will continue to decline.

Former CEO of BitMex cryptocurrency exchange, Arthur Hayes, believes that Bitcoin could decline to $20,000 if it breaks through the support level of $28,500. He drew attention to the fact that many market participants consider this level to be strong support, as it contained Bitcoin's fall last summer. However, the actual strength will be expressed by how it will be able to resist the onslaught of sellers next time. Hayes believes that if the price of the first cryptocurrency drops below $20,000, the upward trend will finally end. We can also say that about $7-8 thousand remains to reach the level of $28,500. It's a lot and a little at the same time. So far, Bitcoin has only slightly retreated from its local lows but has not been able to break through the first more or less strong level that it has encountered on its way.

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 the Fed's monetary policy throughout the current year.