Bitcoin is at a critical juncture, says Huobi Research Institute Analysis from Huobi Research Institute uncovered many factors that may have contributed to its present price and forecasts future market changes.
London, UK
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April 12, 2022 01:00 PM Eastern Daylight Time
The falling price of Bitcoin, which now stands below US$40,000, has prompted many to wonder if the cryptocurrency bull market that began early March is indeed over. Analysis from Huobi Research Institute uncovered many factors that may have contributed to its present price and forecasts future market changes.
“The market is at a critical juncture, and this will determine the future price direction of Bitcoin (BTC),” says William Lee, Chief Researcher at Huobi Research Institute.
From a macro perspective, it was the Russia – Ukraine war, and its Currency Substitution effect, that led to the rise in BTC’s price In March, as many citizens exchanged their Russian Ruble for BTC to mitigate the effects of the Ruble’s devaluation and sanctions from the United States (US) and European Union (UN).
The situation, however, is hardly as simple as it seems. The US and EU tightening sanctions against Russia in the crypto space since April, moves that affected both individuals and businesses in Russia, and the global financial market has entered a new era. The US Consumer Price Index (CPI) has gradually recovered, and the shift in monetary policy is inevitable.
From a technical analysis point of view, it can be observed that BTC has undergone two peaks since it started its third bull market run in the second half of 2020, and is currently positioned to develop into a third peak, in accordance with the Triple Peak Format.
However, this wave, often dubbed wave B, has mainly been caused by Russia – Ukraine war. This wave has often been dubbed as the last “escape wave”; therefore, if the price continues to develop and form this third peak, the market will likely observe a sharp drop after the price changes from wave B to wave C.
On the other hand, the overall price of BTC is still on the rise, despite the recent price drop (blue line in Fig 1), indicating the market has not formed an effective breakthrough to the lower line.
Figure 1: The three triples of the BTC and RSI indicator
“The current RSI index has been below 50, indicating a weak market, however, this figure has yet to fall below 30, which means the market is not yet in an oversold stat,” says Lee. “Above all, the cryptocurrency market is currently at a critical juncture. If the price continues in the channel, then the B wave will continue; otherwise, the market will fall even more sharply.”
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About Huobi Research Institute
Huobi Blockchain Application Research Institute (referred to as "Huobi Research Institute") was established in April 2016. It is committed to researching and exploring new developments in the global blockchain industry. Its goal is to accelerate the research and development of blockchain technology, promote its applications, and improve the global blockchain industry ecosystem. Huobi Research Institute covers industry trends, emerging technologies, innovative applications, new business models, and more. Huobi Research Institute partners with governments, enterprises, universities and other institutions to build a research platform that covers the entire blockchain industry. Its professionals provide a solid theoretical basis and analyze new trends to promote the development of the industry.
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