Crypto market update for February 7, 2022

Bitcoin's price still found the strength to increase last week, which grew by $7,000 in total. The current wave count clearly indicates that the formation of the expected wave c is already completed. If so, then the only question is whether the downward section of the trend of the last three months was corrective or not. The last section of the upward trend was impulsive, so the current one should logically be corrective. But at the same time, an impulse section can be followed by another impulse section. Therefore, we may see another downward wave. In fact, we are currently leaning towards this option. It is also worth noting that both corrective waves for the last three months were weak. The current wave may already end near the level of $41,442, which corresponds to 38.2% on the upper Fibonacci grid. Everything will depend on the market sentiment in the next few days. Therefore, it is suggested to consider a downward reversal near important Fibonacci levels.

Many countries around the world continue to tighten the regulation of the crypto space. It can be recalled that China completely banned mining and any cryptocurrency operations on its territory last year, explaining that cryptocurrencies undermine the financial system and are dangerous for the state and its stability. Such rumors circulated in India for a long time, but in the end, the country's authorities decided to introduce a 30% tax on all cryptocurrency transactions. Several analysts said that this is the right decision. In 2021, India was criticized more than once for wanting to ban cryptocurrencies, following the example of China or Turkey, but now, everyone is benefiting from the imposition of a tax. Investors get the transparency of the cryptocurrency market and may not be afraid that the authorities will simply close it at any moment.

Meanwhile, a lot of famous personalities continue to give ambitious predictions for Bitcoin. Sky Bridge founder Anthony Scaramucci recently stated that Bitcoin will reach the level of $500,000 in the next 4-5 years. He explained that the Bitcoin network is constantly growing and developing – the number of users and operations is constantly increasing in it. At the same time, he noted that the full adoption of the world's first cryptocurrency is still very far away, so there is room for it to grow. Scaramucci pointed out that its latest decline is due to the increased correlation between Bitcoin and the stock market. However, he did not provide a forecast for the next few weeks or months.

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. It can take a five-wave form and 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. 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.