Forex Analysis & Reviews: 04.01.2022 - Technical Analysis of...

04.01.2022 11:03 AM

Technical Analysis of BTC/USD for January 4, 2022

Crypto Industry News:

Bitcoin, the world's most valued cryptocurrency, has replaced gold as a hedge against inflation for young investors, according to a Wharton School finance professor.

The gold performance in 2021 was "disappointing," Wharton School finance professor Jeremy Siegel said in a televised interview.

On the other hand, BTC is increasingly emerging as a hedge against inflation among younger investors, argued Siegel:

"Let's face it, I think Bitcoin has replaced gold as a hedge against inflation in the minds of many younger investors. Digital coins are the new millennial gold. I think the history of gold is that the younger generation is treating Bitcoin as a substitute."

Siegel also recalled that older generations witnessed gold soaring during inflation in the 1970s. "This time is not favorable," he added.

Gold, which has traditionally emerged as an asset class to provide hedge against inflation, fell short of investor expectations in 2021, posting its worst year since 2015 and falling around 5% to close the year at $ 1,800. Despite huge price fluctuations during 2021, BTC grew by around 70% by the end of 2021.

Technical Market Outlook

The BTC/USD pair has bounced after a successful test of the trend line support around the level of $45,638, nevertheless, the bounce was very short-lived. The intraday technical resistance is seen at the level of $47,595, but the key short-term technical resistance is located at the level of $51,913 (Pin Bar high) and $53,333. Despite the recent complex and time consuming corrective decline in form of ABCxABCxABC pattern, the larger time frame trend remains up and only a clear and sustained breakout below the wave C low at $41,678 would change the outlook to bearish again.

Weekly Pivot Points:

WR3 - $56,509

WR2 - $54,179

WR1 - $49,960

Weekly Pivot - $47,650

WS1 - $43,745

WS2 - $41,329

WS3 - $36,987

Trading Outlook:

The ABCxABCxABC complex corrective cycle might be terminated at the level of $41,678 and the market is ready to continue the up trend, however the timing is not great at all as the volatility is low at the beginning of the 2022. According to the long-term charts the bulls are still in control of the Bitcoin market and the next long term target for Bitcoin is seen at the level of $70,000. This scenario is valid as long as the level of $39,474 is clearly broken on the daily time frame chart (daily candle close below $39,000 would be considered as a long-term trend change due to the lower low placement).