On the 24-hour TF, the technical picture for bitcoin looks even worse. First, the price bounced three times from the important level of $ 45,408 and the Fibonacci level of 61.8%. Second, the price has already gone below the Senkou Span B and Kijun-sen lines. Third, on the daily TF, the last round of growth looks just like an upward pullback. Therefore, we believe that now there is not a single technical sign of the emergence of a new "bullish" trend. Yes, bitcoin surprised us by showing an increase of $ 10,000 in the period from February 24 to March 2, but this does not mean that we have now taken a course of $ 100,000, as pseudo-experts like to say in any situation. We believe that now bitcoin will try to return to the lows of the year and try to move to the level of $ 31,100. Further, the scenario is known: either a rebound or overcoming.
Let's remember about the Fed and the tightening of monetary policy.
In the last two weeks, everyone has completely forgotten about the Fed and that this organization, which performs the functions of the central bank in the United States, is going to tighten monetary policy at almost every meeting in 2022. That is, we are talking about the first tightening since 2019 - the first tightening in the last 3 years. In the last three years, when bitcoin built a new upward trend, within which it managed to update its absolute value maximums, the Fed either lowered the rate or adhered to ultra-low rates, almost zero. Naturally, this was a huge plus for any risky investments, especially considering the QE program, which pumped up the American economy with hundreds of billions of dollars for 2 years. Therefore, from our point of view, it is not at all surprising that bitcoin grew during this period. But now times are changing. The QE program is over, rates will rise no matter what pace, and this summer the Fed may start unloading its balance sheet, which will mean the withdrawal of excess money from circulation. This will negatively affect inflation. And what do we have in the end? The conditions for investing in risky instruments deteriorate at times. Bitcoin will no longer be used by investors to hedge inflation, as inflation will begin to decline sooner or later. The money supply will decrease, which means there will be less money to invest. Thus, we believe that bitcoin has already entered a new cycle of decline for itself, which will last at least a year.
In the 24-hour timeframe, the quotes of the "bitcoin" failed to overcome the level of $ 45,408 and began a new round of downward movement within the framework of the downward trend that has been observed for 4 months. There are no obstacles on the way to the $ 31,100 level. If traders manage to overcome it, then the drop in quotes of the "bitcoin" will continue almost guaranteed. Geopolitics continues to deteriorate, so there are fewer reasons for bitcoin to grow, too.