In addition to dependence on fundamental factors, Bitcoin has shown a great relationship with mathematical models. Many components of the cryptocurrency price movement coincided with similar segments in the past. Thanks to this, it has become easier to analyze the current state of Bitcoin and predict likely scenarios for the development of events. A similar pattern from 2018–2019 has formed on the Bitcoin daily chart.
In the winter of 2018–2019, we saw the implementation of a three-stage structure. The first stage involves the formation of a triangle, which breaks in a downward direction. Subsequently, the price reaches a local bottom, and for a certain time, it is in consolidation. As the situation on the market stabilized and buying sentiment grew, the price of Bitcoin began to rise and formed another triangle. Due to the narrowing of the price and the upward breakdown of the "triangle" technical analysis pattern, the cryptocurrency resumed its bullish rally and increased in price by 300%.
A similar technical picture has been forming on the cryptocurrency charts since March 2022. In mid-April, Bitcoin formed a similar triangle pattern that was broken in a downward direction. Then the price reached a local bottom at $17.7k, where a period of protracted stabilization began. As of August 2, we are at the stage of normalizing the situation on the market and resuming venture and private equity investments in crypto products. If we adhere to the structure of this fractal, then in the coming months, Bitcoin will resume its upward movement to new highs.
Despite the fact that the price movement adjusts well to mathematical models and fractals, the current situation is incomparable to 2018. Cryptocurrency has built a powerful correlation with stock indices, and the geopolitical and macroeconomic context will not allow the asset to destroy this correlation. In addition, one of the main sources of Bitcoin independence– miners—turned out to be a victim of geopolitics. The income of cryptocurrency miners has decreased by 40% due to the energy crisis and the multibillion-dollar loan burden.
Technically, the cryptocurrency has also demonstrated the uniqueness of the current bear market. The amount of realized losses in BTC has reached an all-time high on record. At the same time, the asset continues to be dependent on stock indices and Fed policy. It is important to note that one of the key factors behind the bullish rally in 2018–2019 was monetary easing. It should not be expected in the next few months, given the aggravated geopolitical crisis.
However, there is every reason to believe that Bitcoin could start a bullish rally in 2022. Two fundamental factors can influence this. The first is related to the Fed and Chairman Powell's statement that the agency plans to bring the key rate to a neutral level by the end of 2022. The second factor directly affects the first and is based on the easing of pressure on the economy in the run-up to the US elections in November 2022. Experts assume that the Biden administration will take measures to stimulate the economy to improve performance in the elections.
However, we are looking at fundamental factors, not technical ones or those that describe the core value of Bitcoin. This suggests that in 2022 the main cryptocurrency, like any other financial instrument, does not have the right to independence. The current global crisis makes states and regulators the main source of positive changes in the price movement of financial instruments. With this in mind, the likelihood of an upward movement in BTC/USD will increase in the fall as we approach the end of 2022 and the American elections in November.