Despite the fact that Bitcoin begins to hover above $18,000, financial institutions and regulators are still skeptical about the rapid growth in its value. The British head of the Financial Conduct Authority (FCA), Andrew Bailey argues that Bitcoin is a speculative bubble, and new investors will lose the money invested in this cryptocurrency. The British regulator has expressed concerns about the way of valuing Bitcoin. Considering that the cryptocurrency recorded over 1000% increase in value over 12 months, he predicted that investors would lose all their money:"If you look at what happened this year, you will be careful. We do not know much about what sets the price of Bitcoin. This is a strange commodity, because the supply is maintained all the time. If you want to invest in Bitcoin, be prepared to lose your money - this is my serious warning." Bailey acknowledged that Bitcoin is classified as a commodity, given that its quantity is limited to 21 million coins.
The head of the FCA repeated what the deputy Governor of the Bank of England, Sir John Cunliffe, said in November, warned investors to train before investing in cryptocurrencies. In November, the analyst compared Bitcoin's rise to dot.com bubble from the 90s, emphasizing supply/demand as a driver of Bitcoin's value. According to this report, the supply of virtual currency may be the cause of its loss in the future.
Let's take a look at the Bitcoin technical picture at the H4 time frame. The market broke through the local support at the level of $17,984 (now resistance) and dropped lower towards the next local support at the level of $15,470. This pull-back is a part of the corrective wave 4, which might get more complex and time-consuming pattern. The key level to the downside is still at $12,686.
