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22.01.202508:50 Forex Analysis & Reviews: Analysis of BTC/USD - January 22: Gary Gensler's Resignation Delights the Market

Relevance up to 01:00 2025-01-23 UTC--5

Exchange Rates 22.01.2025 analysis

The wave structure of BTC/USD on the 4-hour chart is quite clear. After a lengthy and complex corrective structure (a-b-c-d-e) that developed from March 14 to August 5, a new impulsive wave has started to form, which is already showing a five-wave structure. Given the size of the first wave, it is likely that the fifth wave may be shortened. Therefore, I do not expect Bitcoin to exceed $110,000–$115,000 in the coming months.

Additionally, wave 4 has taken on a three-wave form, which confirms the validity of the current wave marking. As wave 5 continues to develop, it is advisable to look for buying opportunities. However, as previously mentioned, this wave could conclude very soon—or it may have already ended. The news environment remains supportive of Bitcoin's growth, driven by reports of investments from institutional traders, governments, and pension funds in certain countries. While some of this information may not be entirely accurate, demand for Bitcoin is on the rise. The critical question now is how long this demand can be sustained.

The Crypto Market Is Optimistic About the Future

On Tuesday, BTC/USD rose by $4,300; however, this increase did not alter the current wave count. I still do not see a convincing wave 2 within the presumed wave 5 that would indicate new buying opportunities for Bitcoin. While Bitcoin is certainly on the rise, the sustainability of this growth remains uncertain. Many analysts believe that Bitcoin's growth is eternal or at least has a long way to go, with price projections ranging from $250,000 to even $1,000,000. Personally, I am less optimistic and expect Bitcoin to experience significant periodic corrections.

Yesterday, the market reacted positively to the resignation of Gary Gensler, who has repeatedly obstructed the crypto industry in recent years. The Trump administration appears to take a more liberal stance toward Bitcoin and other crypto assets, aiming to ease regulations. Moreover, Trump has expressed openness to including Bitcoin in the U.S. strategic reserves. While these developments are contributing to a rise in BTC's price, I remain cautious about the longevity of this growth. Wave 2 within wave 5 could take on a three-wave form, leading to another drop below $100,000. If wave 5 turns out to be truncated, we may see a much stronger collapse of Bitcoin's value. Once again, I am not convinced that Bitcoin will experience perpetual growth under any U.S. president.

Exchange Rates 22.01.2025 analysis

General Conclusions

Based on my analysis of BTC/USD, I believe that the current growth phase of this instrument may be nearing its end. While this perspective might be unpopular, I suspect that wave 5 could be truncated, potentially leading to a collapse or a complex correction. Therefore, I do not recommend buying cryptocurrency at this time.

If wave 5 develops into an extended five-wave structure, it should be preceded by a clear corrective wave 2. This corrective wave would indicate that the market is preparing for new buying momentum, creating opportunities for investors to enter.

On a higher timeframe, a five-wave bullish structure is evident. Soon, we may see the emergence of a corrective bearish structure or the onset of a bearish trend.

Key Principles of My Analysis

  1. Wave structures should be simple and clear. Complex structures are challenging to trade and often subject to change.
  2. If market conditions are unclear, it is better to stay out.
  3. There is never 100% certainty in market direction. Always use Stop Loss orders.
  4. Wave analysis can and should be combined with other analytical methods and trading strategies.

*A análise de mercado aqui postada destina-se a aumentar o seu conhecimento, mas não dar instruções para fazer uma negociação.

Chin Zhao,
Analytical expert of InstaSpot
© 2007-2025
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