This review begins a series of articles with forecasts for next year. The first one will be bitcoin.
November of last year was remembered for the sharp decline in the cryptocurrency market, which was caused by problems at the large crypto exchange FTX. Restoration began in December, and several options were considered in January 2023.
Option in red. Triangle in wave (4), followed by the final one (5). This would end the impulse from 68990 and begin its correction.
Black option. Episode 1-2 1-2.
The important level separating these two scenarios should have been the trend level (blue). When it was broken, growth to the region of 30,000 (4 of the previous degree) was expected.
As a result, they broke through the trend line, tested it from below (wave (ii)) and went to the previously expected level of 30,000.
After it was reached, there was reason to expect a reversal. In July, a chart was published where the main count assumed the end of wave 2.
Indeed, in mid-July, a downward movement began from the level of 31764, which ended in September at the level of 24923. The impulse went down, the question remained of what it was part of: the beginning of a reversal, or a flat correction ((C)) in B. Ultimately, the second scenario worked, the correction ended, growth resumed.
After breaking the July maximum, the count was adjusted (graph below). The movement from August 2022 to the end of November is marked as 5 (although at a stretch, it was initially considered a correction). This option correlates with the red option at the beginning of the review.
We achieved the first goal of 36,000, now we are going to 42,325. At the moment, this mark is expected to be reached, it will be necessary to look at the situation: how we will approach it, what the downward movement will be, what the general situation on the markets will be. However, after finishing (2), (3) will begin with a rapid downward movement.
Initially, a rise above 31764 was seen as a less likely alternative scenario. However, despite many fundamental factors that are sure to play a role, Bitcoin has updated its annual highs. This was also facilitated by the local weakness of the dollar and the completely unexpected optimism of investors in the stock market.
As an example.
The cost of hedging in options against a stock crash is now at a 5-year low. Nobody believes in the market falling anymore. In 2019, it is clear what happened after such confidence.
Asset managers and fund "shoulder" megalongs in Nasdaq.
It's no surprise that November of this year was one of the best in history since 1928. You can also see what 1929 was like.
There are inflows of funds into the crypt, which pushes it up.
"Twitter sentiment" regarding US stocks. Often pointed to the peaks.
At the same time, few people have doubts about the future recession (acute phase). Economic data and leading indicators confirm this.
Yield curve inversions and crises. As you can see, a return to normal has begun, which always corresponds to the beginning of a crisis.
The cost of borrowing for companies from the SP500 is the highest in 17 years, servicing and taking on debt is becoming increasingly difficult = deflation. This doesn't just apply to SP500 companies.
Conclusion: growth from the end of 2022 is considered as a correction (wave (2)). At the top there are still levels 42325 and 48640, technically there are no obstacles to reaching at least the first. However, the fundamental factors noted on the charts indicate an extremely precarious position of the cryptocurrency market, as well as the stock market. The fall can begin at any moment, but so far there are no signals for this, so growth is expected to continue. Most likely, something global will not happen before the New Year, but after that we should expect a rapid decline.
