23.05.202206:41 Forex Analysis & Reviews: Bitcoin continues to fall. Could it have been otherwise?

On the 4-hour TF, the current picture for bitcoin looks clear. There is a descending channel, and the price is currently located even below it. That is, bitcoin does not just maintain a downward trend, it also increases over time. From our point of view, nothing surprising is happening now. Let's analyze it. In the last six months, the number one cryptocurrency in the world has been falling. The most important thing is that the "bullish" trend has ended and, accordingly, the "bearish" one has begun. Recall that each completion of an upward trend has always been accompanied by a drop in the cryptocurrency by 80-90%. Therefore, so far everything is going according to plan, and the "bitcoin" has a real chance of falling to 6-10 thousand dollars per coin in the future.

Further. The Fed announced at the beginning of the year that it was taking a course to tighten monetary policy. At the same time, we are talking not just about one or two rate increases, but about a whole cycle of tightening. It is planned to raise the rate to at least 3.0%, and from July 1, the Fed will start selling treasury and mortgage bonds from its balance sheet, which it actively accumulated during the pandemic. That is, we are talking about double tightening at once. If bitcoin was growing by leaps and bounds during the active monetary stimulus, then it is logical to assume that now it will fall. So far, again, everything is going according to plan.

Next is the geopolitical conflict in Ukraine. Look at how risky currencies like the euro or the pound have collapsed in value. But these are not the latest currencies in the world. But even they can't do anything against the desire of investors in troubled times to deal only with stable instruments and currencies. Naturally, the demand for the dollar is growing, the demand for bonds is growing, and the demand for risky instruments is falling. And it is difficult to find a riskier instrument than bitcoin.

And finally, bitcoin is not and has never been a means against inflation. At the moment, the consumer price index is growing everywhere, but for some reason, no one uses bitcoin as a hedging tool. And why? Yes, because bitcoin is a "hype" tool. If it grows, then it is bought, if it falls, then it is sold. It does not have the same stability as conventional currencies, which at least can be influenced by the central bank. The cryptocurrency market is a free market, without anyone's influence, which has been put in its main plus more than once. They say that central banks cannot interfere in the exchange rate formation and the issue of bitcoin. As you can see, there is a downside to the coin. Therefore, we believe that BTC will continue to fall in the medium term.

In the 4-hour timeframe, the quotes of the "bitcoin" fell to the level of $ 29,750 and continue to be located near it. Bitcoin may well continue the correction for some time, but as long as it is below the upper limit of the descending channel, it maintains a downtrend. So the forecast is as follows - a drop to the level of $ 24,350.