The wave counting of the 4-hour chart of Bitcoin still suggests an increase in quotes. At the moment, the construction of waves a and b of a new upward correction is presumed to be completed. If this is true, then the rise in quotes will continue as part of the construction of wave c with targets located above the peak of wave a, that is, above the $42,000 mark. At the same time, the market sentiment remains negative, which makes it impossible to consider this option with 100% certainty. If in the coming days, or even weeks, the news background for bitcoin deteriorates again, then it will be possible to expect the construction of a new powerful downward wave. The entire wave counting can easily transform into a five-wave structure, and the current rise in quotes will then correspond to wave 4 of this downward trend section. However, I would talk about this after the targets of the current three-wave, located near the 61.8% Fibonacci level, have been worked out.
The news background for Bitcoin, as I have said many times, remains quite negative. There is practically no positive news now. But the likelihood that central banks and governments will continue to tighten the rules for the circulation and production of cryptocurrencies is growing. I recently said that in the United States and China, the rules for the circulation of bitcoin may be seriously tightened in the near future, and any mining may even be prohibited in China. And yesterday, the ECB released a report on the international role of the euro currency, which contained very hard-hitting information for bitcoin and other cryptocurrencies. The ECB fears a loss of monetary sovereignty if large tech companies create their own digital currencies that will be inaccessible to the state and the central bank. The ECB notes that digital currencies managed by IT giants will pose a threat to financial stability, and most of the domestic and international payments will be controlled by external players (i.e. companies).
Thus, the central bank's ability to fulfill its monetary policy and economic management responsibilities with money, allocating and channeling it to the necessary sectors will be jeopardized. This information potentially means that the ECB will not be happy if new digital currencies enter the economy, especially if they are issued by large tech companies. However, the same can be said for Bitcoin. The more popular Bitcoin and other digital currencies become, the less the central bank has the ability to manage the economy of its own country. That is why countries such as the United States or China (not to mention Turkey, Iran, and a number of other countries) are not enthusiastic about Bitcoin and are going to seriously tighten this area. For the first cryptocurrency, this means a potential drop in interest among investors. Therefore, Bitcoin growth in the future may be much more difficult than in the last year.
Based on the analysis, I believe that the three downward wave structure is complete. The current wave counting indicates a possible rise within wave c, I continue to recommend buying bitcoin for each MACD signal "up" with targets located around $42,500. An unsuccessful attempt to break through the 61.8% Fibonacci level could lead to a new decline in bitcoin quotes, possibly even as part of a new downward wave 5.
