The news background for the cryptocurrency market is a very vague concept. If there is a special calendar for the foreign exchange market, which displays all important events for each individual day, then in the case of the cryptocurrency market, there is nothing like this. On the contrary, any message from Elon Musk on any social network can cause a serious change in the rate of Bitcoin or any other cryptocurrency. Thus, every time bitcoin shows an increase or decrease, the markets can only guess what happened this time. What could have started a new strong movement?
Bitcoin has updated its all-time highs.On Tuesday, November 9, Bitcoin rose by only $2,000. But this was enough for the course to update the previous peak. The maximum value of one bitcoin is now $68,447.
It looks like inflation is to blame.If you look at the situation from the outside and try to put all the markets in the lens, it becomes obvious that bitcoin is growing due to important, long-term factors. One of these factors may be growing inflation not only in the United States but throughout the world.
A new report on US inflation may show its acceleration to 5.8% YoY. The same goes for core inflation, which also continues to break records in America. Meanwhile, the consumer price index in the European Union and the UK is slightly lower but remains at high levels. Based on this, high-yield instruments remain a way for investors to reduce inflationary risks.
However, I propose to think about what will happen when inflation begins to decline in America, and the Fed's QE program tends to zero. It is clear to everyone that with such a strong growth of the US stock market, the US cryptocurrency market cannot be groundless and inconsistent. The "bubble" will burst sooner or later.
Earlier, JPMorgan analysts stated that the fair price for bitcoin is $35,000. And I agree with this figure 100%. Thus, now Bitcoin simply continues to "fly into space," with no reason except for market supply and demand. There has been an outflow of cryptocurrency on exchanges in recent weeks, which means its scarcity and shortage. Fewer and fewer owners are putting up their coins for sale.
Bitcoin has been pondering over the past few weeks but has attempted in the past few days to resume building an upward trend. And the attempt was successful. The picture below shows that the current upward trend is beyond doubt.
The wave pattern was refined after the instrument made a successful attempt to break the high of the expected wave 3. Now the whole picture looks like an impulsive five-wave upward trend section, which began its construction on July 20. If this assumption is correct, the construction of wave 5 has now begun as part of this section, which may be the last.
However, even such a seemingly unambiguous structure raises some concerns. First, wave 4 can take a three-wave form because wave 2 has taken on a three-wave form. Secondly, the part of the trend after September 21 can be one wave, the third. Then the construction of the fourth wave will begin a little later.
Thus we derive the conclusion that Bitcoin has already climbed very high and it will be scary to buy it at such high price levels. Although with an increase in demand for the instrument, it can continue to grow even up to $100,000.