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Investors' attitude towards bitcoin changed in 2021. Bitcoin was trapped inside a side channel.

At the end of the year, "bitcoin" was inside the flat.

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Bitcoin continues to trade as calmly as possible on the eve of the New Year. The trend line on the 4-hour timeframe was overcome, but at the same time, the cryptocurrency quotes continue to remain within a limited range between the levels of $ 46,600 and $ 51,350. As recently as yesterday, the cryptocurrency bounced off the upper limit of this channel, so now a new round of falling to the level of $ 46,600 or slightly lower may begin. Thus, the main thing now is the side channel and not the fact of overcoming the downward trend line. Actually, on the eve of the New Year, this behavior of the cryptocurrency is justified. There is practically no news for the foreign exchange market right now. There are not many of them on the cryptocurrency market either, and market participants are slowly starting to celebrate and leave the market. Thus, until bitcoin leaves the channel limits, we believe that the flat will remain.

Bitcoin is now a means against inflation.

Meanwhile, many experts have noticed that investors' attitude to bitcoin has changed in 2021. If earlier everyone talked about it as "digital gold", that is, as an asset that sooner or later will be super stable in price and will be used for long-term investments, now the attitude towards bitcoin is as a means of hedging inflation. This does not mean that there will be no longer any long-term investments in bitcoin. This means that when inflation in the States and around the world begins to decline, the demand for bitcoin may begin to fall. We have already said earlier that the Fed's actions to tighten monetary policy are a negative phenomenon for the cryptocurrency market. In addition, inflation will begin to decline in any case, so bitcoin may continue to get cheaper in 2022. However, as soon as a new interpretation of the essence of bitcoin appeared, experts and traders immediately began to abandon its previous version. So now the majority believes that bitcoin has never been "digital gold" because of its excessive volatility. After all, the comparison with gold occurs because, in times of falls in the stock market, the price of gold remains stable, which means it hedges risks. Bitcoin can collapse or grow by 10-15% within one day. So it does not have the characteristics of gold.

Michael Saylor also considers bitcoin a means against inflation.

At the same time, Michael Saylor, CEO of Microstrategy, spoke out about the main cryptocurrency. Recall that Microstrategy is the largest public investor in bitcoin. Saylor called bitcoin a "global reserve asset" in his last interview, and the US dollar a "world reserve currency", thus noting the fundamental difference between them. The head of Microstrategy also noted that in 2021 the world began to need an inflation hedging tool and urged everyone who owns bitcoin not to sell it. However, as we said earlier, all persons interested in the further growth of bitcoin advise not to sell it, but only to buy it. And Michael Saylor is an interested person.

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The trend on the 4-hour timeframe has changed to the side. The side channel $ 51,350 - $ 46,600 plays a key role now. Thus, after the rebound from the level of $ 51,350, we are waiting for a new drop in quotes with a target of $ 46,600 and recommend selling bitcoin. If the price is fixed above the level of $ 51,350, this will suggest the formation of a new upward trend, so purchases with targets of $ 55,754 and $59,177 will become relevant.

The material has been provided by InstaForex Company - www.instaforex.com

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