FX.co ★ The fundamental reasons for the fall of bitcoin (Part 1)

On the 4-hour TF, the current picture for bitcoin looks even more eloquent than on the 24-hour one. There is a clear descending channel, and the quotes of the "bitcoin" are well below it. That is, at the moment, we can say that the downward trend is not just continuing, it is intensifying. In the previous article, we reviewed bitcoin in general. Now we propose to look at it through the prism of specific fundamental events.

In principle, everything is easy and simple here, and we have been talking about this all 2022. Risky assets will fall in 2022. But if for stock markets it is only a correction time, then for the cryptocurrency market it is a time of global decline, and collapse. Why is that? Yes, because cryptocurrencies are completely unsecured. These are just useless pieces of code. Gold cannot be worth $ 0, because it has a mining cost, a cost price, a certain utility, and a scope of application. Even if gold ceases to be a precious metal tomorrow, it will still be worth like steel, iron, or aluminum, that is, it cannot be worth anything. And bitcoin can do very well because, although it also has its own cost, it has no practical value or benefit. Today bitcoin is growing – and everyone needs it. Bitcoin is falling tomorrow – and no one needs it. That's all.

It's the same with securities. Apple shares (just for example) cannot be worth $ 0. Only if the company suddenly goes bankrupt. They can't cost $ 10, they can't lose 90% of their value in a year. Of course, cataclysms and force majeure happen in the world, but behind any shares, there are always specific assets, companies, productions, people, brains, products, businesses, the ability to produce added value, and so on. That is, what has been driving this world for the last few hundred years. Accordingly, the stock market can be adjusted, it can be adjusted very much, but it cannot fall to zero. And the cryptocurrency market can. Naturally, in practice, not everything will be so good for the stock market and not everything will be so bad for the cryptocurrency. We believe that the key US stock indices will fall by at least 50%, which is also a lot. But after that, they are almost guaranteed to recover. The cryptocurrency market will fall, as usual, by 80-90%, and it will also recover sooner or later, but now no one will say how much it will recover and how much time it will take.

In the 4-hour timeframe, the quotes of the "bitcoin" fell below the level of $ 24,350. It was not possible to gain a foothold above the descending channel, so now the target remains at the level of $ 12,426. It is not recommended to consider buying bitcoin now, in principle, you need to wait for at least a consolidation above the channel. And even then, the trend is now "frankly bearish".