FX.co ★ Crypto market update for January 10, 2021

Bitcoin has fallen by $ 4,500 during the last couple of days. Therefore, everything is going according to the plan that was repeatedly mentioned in recent weeks. A new downward wave, which should be the low of wave c, began to form after three waves appeared inside the assumed wave b and an unsuccessful attempt to break through the 61.8% level on the lower Fibonacci grid. However, let's remember that the current downward part of the trend can take on a five-wave form, that is, an impulsive one. Who said that it will clearly be a correction? Moreover, if we compare the size of wave a with any of the waves of the previous ascending section, then its large size immediately catches the eye. In this case, the pair's quotes are expected to continue to decline in the near future. A successful attempt to break through the 38.2% level on the upper Fibonacci grid, which stopped the decline of the cryptocurrency last time, will indicate the readiness of the market for further sales.

• Analysts believe Bitcoin will rise this year

Despite the fact that negative news background for Bitcoin persists (issues with Kazakhstan's internet and the Fed's minutes), many analysts are thinking about what is the probability that Bitcoin will again take first place among all investment instruments in the new year. By the end of 2021, Bitcoin grew by 60%. Oil also rose by 55%, and the S&P 500 by 29%. Thus, even despite the correction that began at the end of the year and continues now, the world's first cryptocurrency still showed maximum growth among any other instruments. Bloomberg analyst Mike McGlone believes that this scenario could happen again this year. It can be recalled that this analyst predicted an increase to $ 100,000 for most of 2021, but at the end of the year, he abandoned his forecast and moved it to 2022. At the same time, Goldman Sachs believes that Bitcoin could increase its share of the savings market in the next 5 years. In their opinion, this can result in an increase of up to $ 100,000 per coin.

• Investors are concerned about the Fed's rate increase

The increase in the Fed's interest rate in 2022 remains the most dangerous factor for Bitcoin. Based on the latest minutes of the US regulator, this hike can occur two or three times, and investors are afraid of this. Analysts believe that the following year may be difficult for the category of assets that are risky and showed good growth in 2021 – primarily stocks and cryptocurrencies. At the same time, many note that the market will still need a tool to diversify risks, so Bitcoin can continue to be one. In this case, its value may rapidly rise again, but the forecasts for 2022 are already much more modest than before.

A new downward trend section continues to form. At this time, wave b is considered completed, which has taken a noticeable three-wave form. The instrument declined to the previous low, around $ 41,500, in the expected wave c. Near it, the downward trend may end, but such a shortened third wave is rare. The instrument can be expected below this mark. The news background is not on Bitcoin's side right now, so the expectations of a strong wave c are not unfounded. A successful attempt to break the low wave a in the near future and the level of $ 41,515, which equates to 38.2% Fibonacci, is very important. In this case, the decline may continue around the targets levels of $ 37552 and $ 34322, which equates to 23.6% and 50.0% Fibonacci.