It is plain to see on the 4-hour TF that bitcoin is boldly advancing to the level of $24,350. Remember that the expansion started with the release of the US inflation report a few weeks ago. And there was just one report; since then, the cost has risen by $7,000 alone. Although we think it could help the cryptocurrency market, it is incorrect to attribute a 50% increase in bitcoin from its annual lows to a single report on inflation.
It should be kept in mind that just because the market has already factored in all rate increases in the future from the Fed, the ECB, or other central banks, it doesn't always follow that a bullish trend has started. The Fed rate will remain at 4.5% even if the major central banks in the world stop tightening monetary policy right now. This indicates that compared to earlier periods when rates were low, bank deposits or Treasury bonds now have higher yields. As a result, many investors favor investing in secure instruments over bitcoin. Remember how things were before? Rates were extremely low; Treasury bonds and bank deposits both provided owners with yields of less than 1%. Investors wanted to keep their money safe. The yield on these securities is now higher than inflation, although the bonds are issued for 5 to 10 years. In other words, you can purchase bonds right away while anticipating a future fall in inflation, and current profitability will not change. As a result, we believe that, even if the market has already accounted for the "tough" monetary policy, bitcoin will not return to $60-70 thousand in the next six months or a year.
The majority of specialists who do not have a personal stake in bitcoin's development predict that 2023 will be a "year of consolidation." Bitcoin can remain stable between $20,000 and $30,000, which is a favorable scenario. After all, many people anticipate further declines, such as to $12,000 or even lower. Additionally, a lot of specialists think bitcoin cannot suddenly reverse course and begin a new ascent. It has become too closely tied to and even dependent on the US stock market in recent years. It is therefore naive to anticipate bitcoin's growth in the absence of a revival in the US stock market. Therefore, it goes without saying that we won't make statements like "Bitcoin is guaranteed to fall more" or "The current growth will finish quickly" out of thin air. The level of $24,350 still needs to be overcome, there is no longer a trend, and the fundamental environment is negative for the rise of bitcoin.
The "bitcoin" quotes on the 4-hour time frame have surpassed the $18,500 mark, allowing the first cryptocurrency's rise to continue with the target of $24,350. From our perspective, a rebound from the level of $24,350 will serve as a signal to close any long positions and begin new short positions with targets of $18,500 and $17,582. The underlying backdrop should ideally improve steadily as Bitcoin enters a new "bullish" trend, allowing the cryptocurrency to continue rising. And it's not there right now.