Bitcoin managed to leave the junior side channel of $18,500-$20,400 this week, but this does not change the essence since the higher side channel of $18,500-$24,350 remains, in which the price has been for four months. But what is important is to exit the descending channel on the 4–hour TF and consolidate above the trend line on the 24–hour. These two anchors allow the cryptocurrency to stay inside the side channel for as long as it wants, far from the narrowest. The cryptocurrency has grown by several thousand dollars after the fifteenth bounce from the $18,500 level. Still, we have repeatedly warned that bounces from this level can be used for small purchases, and growth is possible. It’s just that while the price is located inside the side channel, it is impossible to count on trend movement. After all, we are interested in the trend, not movements within a limited price range.
There will be several interesting events for bitcoin next week that may affect its value. First of all, this is the Fed meeting, at which, there is no doubt, rates will be raised again. Most likely, the rate will rise to 4%. Recall that any tightening of the Fed’s monetary policy is a negative factor for all risky assets. Therefore, we will not be surprised if bitcoin drops back to the $18,500 level by the end of the week. As before, we do not see any prospects for the growth of the first cryptocurrency. There are simply no fundamental reasons for this. Of course, this does not mean that bitcoin cannot grow in principle. However, based on fundamental analysis, such a probability is small.
Do not forget that bitcoin or any other cryptocurrency can grow because it is bought at a given time. And traders and investors can buy without any reason. Therefore, it is unnecessary to exclude “bitcoin” growth completely. But so far, its potential growth is limited to $24,350. If the quotes consolidate above this level, it will be possible to talk about forming a new “bullish” trend. Considering that bitcoin grew by 2 thousand dollars when Elon Musk bought Twitter, and after that, it stood still, we strongly doubt the growth of the cryptocurrency, even by 1-2 thousand dollars.
For several months, “bitcoin” quotes have been unable to break through the $18,500 (127.2% Fibonacci) level in the 24-hour timeframe. Thus, we have a side channel, and it is unclear how much time Bitcoin will spend on it. We recommend not rushing to open positions. It is better to wait for the price to exit this channel and only then open the corresponding transactions. Overcoming the $18,500 level will open the way to the $12,426 level. Bounces from $18,500 can still be used for small purchases.
The material has been provided by InstaForex Company – www.instaforex.com