Chart of the day: wait for the rebound and then the resumption of the fall in bitcoin
During the current rollback, which began on June 7, bitcoin lost a third of its value (the level at the time of writing is $21,220). Compared to the record high recorded in November 2021, this leading cryptocurrency has collapsed by 70%.
Digital currencies, considered the most speculative and volatile asset class, formed the top about two months before the stock market pullback began. The current extremely unfavorable market environment for digital assets has overthrown many presumptuous misconceptions of crypto investors. It turned out that bitcoin and other digital assets are not “safe havens” at all. They do not protect against inflation either.
It was digital currencies that led stocks to the territory of the “bear market”.
And although inflation in the US has peaked in 41 years, the price of bitcoin has collapsed. It is also silly to call bitcoin a means of preserving value, given the sharp drop in its price.
Although we have been insisting on a “bearish” scenario for bitcoin since the beginning of 2022, this does not mean that traders cannot take advantage of the emerging opportunities associated with this cryptocurrency. For example, now on the chart, in our opinion, a “dead cat bounce” is formed. This means that bitcoin may rise in the short term before resuming the decline.