Crypto market update for February 2, 2022

Over the past few days, Bitcoin has continued to rise after rebounding from the 50.0% upper Fibonacci level. Its growth is very weak, but the current wave pattern suggests that the formation of a downward corrective section of the trend is already over. The entire set of waves for the last three months is very similar to the structure a-b-c. If this is true, then the upward set of waves has now begun forming, which is also possibly a corrective one. However, the entire downward trend section can also take on a five-wave corrective structure, so it is better to be cautious. The news background continues to be the main opponent of Bitcoin's growth. There is no positive news for the cryptocurrency market. Regulators and governments in many countries around the world continue to work to strengthen control over cryptocurrencies and digital assets, and some simply ban bitcoin on their territory. At the same time, the Fed continues to move towards the significant rate hike and the completion of the QE program. Now, analysts continue to argue about whether there will be a new upward trend this year. But since there is no positive news, it is not necessary to count on Bitcoin's strong increase.

There is one player in the market who buys Bitcoin no matter what. MicroStrategy is the largest public company owning Bitcoin. It raised its reserves to 125,000 coins in January by investing another $25 million in cryptocurrency. Now, its entire Bitcoin fortune is estimated at $4.8 billion. It even reached up to $10 billion at the peak of the value of the cryptocurrency. The CEO of the company, Michael Saylor, stated that the average purchase price of Bitcoin is $30,000. Therefore, the company is currently ceasing its cryptocurrency investments. Earlier, Saylor has repeatedly stated that Bitcoin will become the main means of saving in the 21st century. It is logical to assume that the company is waiting for a new upward trend.

JPMorgan, which is one of the largest investment banks, abandoned their previous forecast, which predicted the growth of cryptocurrency to $146,000. They noted that the latest 50% decline in Bitcoin indicates the beginning of a downward cycle and they no longer recommend adding this digital asset to institutions' investment portfolios. Earlier, the bank stated that the ratio of the volatility of bitcoin to gold will fall twice by the end of 2022, but at this time, the fair price is $38,000 per coin. The bank also admitted that Bitcoin may continue to decline.

The downward trend section continues to form. 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 section of the trend. This wave could continue its construction with targets near $29,117 and $26,991, which equates to 0.0% and 61.8% Fibonacci within wave e or waves 5 in c. So far, the internal wave counting of the expected wave c looks too holistic, the corrective waves are very small and difficult to distinguish. However, the corrective set of waves a - b - c looks quite complete, so the option of building a new upward trend section from the current levels can also be considered. In order to sell Bitcoin, new downward signals are needed – unsuccessful attempts to break through levels located above the current rate, or a reversal of the MACD indicator. In general, any signs that the upward wave that is currently being built is already completed.