FX.co ★ Crypto market update for January 19, 2021

Bitcoin declined by $1300 on Monday and continued slowly the next day. We believe that wave c of the downward corrective section of the trend continues to form. Earlier, it was mentioned that the wave should not get shortened, which gives reason to expect Bitcoin to be much lower than $40,000. So far, this scenario is being executed, since the quotes leaving the reached lows, after an unsuccessful attempt to break through the level of $41,515, turned out to be very weak. This means that the markets are not yet ready to buy the cryptocurrency and expect its further decline.

Moreover, the news background remains weak for Bitcoin and the entire cryptocurrency market. And with such a background, it is difficult to expect an increase in demand. Opinions of analysts and investors were divided. Many continue to believe that 2022 will be a new, happy year for the main digital asset, despite the fact that its price has been growing for 2 years, which has not happened before. Usually, Bitcoin rises within a year and a half, and then takes a break for several years, during which it can fall by 80-90% from its highs. However, there are those who believe that Bitcoin's drop to $30,000 is the very minimum.

Invesco predicts another $10,000-11,000 drop

One company that is backing the new decline of Bitcoin is investment company Invesco. The company is confident that its decline from $69,000 to $40,000 is already evidence of "deflation of the bubble". Based on this, they expect the cryptocurrency to decline to $30,000 this year. The company's document says that $30,000 may not even be the limit for the decline. However, it can be recalled that the same company forecasted Bitcoin's decline to $10,000 in 2021, but it rose to $69,000.

Michael van de Poppe disagrees with Invesco

On the other hand, the popular analyst Michael van de Poppe believes that Bitcoin is preparing for a new upward trend. According to him, the world's first cryptocurrency will make an "exponential growth". He recalled that many new cryptocurrency platforms were created last year, and there was a strong development of DeFi and NFT. Van de Poppe also refers to "some technical indicators" that signal that the current level can be considered for purchases. He also notes that long-term investors do not get rid of their coins, which indicates accumulation.

Earlier, MicroStrategy president Michael Saylor, PlanB analysts, and former Facebook CEO Jack Dorsey also said that Bitcoin is the future. However, we believe that if the forecasts of these respected people really happen, then the cryptocurrency will still first plunge to $ 30,000.

The formation of a new downward section of the trend continues. At the moment, 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, and broke through it. The downward trend may end around this level, but such a shortened third wave is still rare. The instrument can be expected below this mark. The news background is currently not on Bitcoin's side, so the expectations of a strong wave c are not unreasonable. A successful attempt to break the low of wave a, as well as the level of $ 41,515, which equates to 38.2% Fibonacci, is very important. In this case, the decline may resume around the targets levels of $ 37,552 and $ 34,322, which equates to 23.6% and 50.0% Fibonacci.