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08.03.2023 05:12 PM
Bitcoin need an increase in oil prices

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The picture is clearer on the 4-hour TF. Following a recovery from the most crucial level of $25,211, the price fell to the upward trend line and confidently overcame it. Technically speaking, this significantly raises the likelihood of a further decline in the value of the cryptocurrency. Trades can now be expected to reach the target of $20,400, which essentially corresponds with the target that is closest to the 24-hour TF and where the Senkou Span B line runs. Also, it should be noted that the price is situated beneath every Ichimoku indicator line. In the near future, we think a new downward trend is beginning.

Despite an unsuccessful attempt to break through the side channel's upper limit, bitcoin is still falling, and global experts continue to express their predictions for its future value. As usual, there are two groups of experts. For years, the first group has consistently predicted that there will be a minimum of $100,000; the second group is more skeptical. For instance, Arthur Hayes, the former CEO of BitMEX, predicts that the global economy will experience an oil crisis, which will give cryptocurrencies a boost. According to him, the conditions for bitcoin's growth would be created by a rapid increase in energy prices. Also, according to Arthur Hayes, loosening the Fed's monetary policies would encourage bitcoin to start developing a new "bullish" trend. According to Mr. Hayes, the demand for energy resources would rise globally while the oil supply would be reduced by international oil producers. Moreover, the former CEO of BitMEX thinks that because there is a limited quantity of bitcoin, the dollar will lose its dominance.

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Almost every argument made by Hayes is one we reject. First off, given that it has been increasing for many years, it is unclear why the US dollar will fall in value. Second, why will bitcoin's price increase based on a "limited quantity" remain a mystery? Although it has always been the case, bitcoin's growth is not constant. Third, if oil production is simply not profitable for global exporters, why is it required to increase, and why will it stop? We think that the only thing that can keep bitcoin and other crypto assets supported is loosening Fed monetary policy. But this time is still a long way off. The market should at least have some indication from the Fed that it is prepared to start relaxing before the growth of bitcoin starts a few months before the first Fed rate decrease. It only has feedback signals in its current state.

The bitcoin cryptocurrency failed to surpass $25,211 in the 4-hour time frame, moving $3,000 away from previous highs. We think it is now prudent to maintain sales at around $24,350, with the closest target being $20,400. If the level of $25,211 is reached, they should be closed. Also, when the trend line was crossed, an increase was possible. If the $25,211 level is reached, it will be quite safe to initiate purchases with a target of around $29,750.

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