Top.Mail.Ru
empty
30.12.2021 09:35 PM
Results and Outlook of the Crypto Market; Forecast for Bitcoin

The cryptocurrency market has been developing rapidly this year. Thus, it will be very interesting to look at the future prospects of the crypto markets, given that the current year has become an epoch-making one for them, without exaggeration, and since all markets are interconnected and cannot develop in isolation, then inter-market technical analysis, as they say, rules, and in this context, we will consider the dynamics of Bitcoin in the future for the next one to three months.

But first, let's talk about what events became milestones for the cryptocurrency market in the outgoing year, and the main ones were:

  • The increase in the capitalization of Bitcoin above $1 trillion, which occurred in February 2021, due to the increase in the BTCUSD rate to the level of $57,000, and an increase in the capitalization of the cryptocurrency market over $3 trillion, which happened in November 2021.
  • A sharp rise in interest in projects based on non-fungible tokens (NFTs), which spurred the sale of the work "Everydays: The First 5000 Days," by artist Mike Winkelmann, also known as Beeple, for $69 million.
  • El Salvador's adoption of Bitcoin as a national currency, which, despite criticism from international financial institutions, made BTC a national means of payment.
  • The launch of the Ethereum London EIP-1559 update, which will eliminate mining of this cryptocurrency by mid-summer 2022, which will reduce the environmental impact of ETH by 99% and herald a new turn in the development of cryptocurrencies.
  • The launch of the first exchange-traded ETF ProShares BITO in the U.S., following cryptocurrency and allowing investors to invest in bitcoin futures contracts, much like they do now in commodity exchange-traded funds such as oil.
  • China's ban on any activity related to the cryptocurrency market.

This image is no longer relevant

Moreover, the restrictions imposed by China are indicative for investors. First, they give us a clear understanding of how the central banks will act in the event that trading and mining of cryptocurrencies will pose a threat to the national currency and the economy. Second, the exponential growth of the cryptocurrency market after China made the decision to ban it confirms the hypothesis that the fate of this segment, like any other financial instrument, is decided in the United States.

The analysis of these events gives us an understanding of how cryptocurrencies will behave in 2022, comparing their dynamics with the dynamics of dollar liquidity in the system, because so far cryptocurrencies are not an independent segment of the economy and depend on how much fiat money is in circulation, as well as the possibility of exchanging cryptocurrency for dollars, euros, pounds etc. In this regard, the policy of key Central Banks is decisive not only for traditional markets, but also, despite decentralization, is of crucial importance for the cryptocurrency exchange rate.

As you know, in December 2021, the U.S. Federal Reserve decided to accelerate the completion of the quantitative easing program in 2022, postponing its end from July to March. In addition, as the "dot charts" published following the FOMC meeting show, next year the Committee may raise the rate three times, and this should lead to a decrease in the amount of money in the system.

There is no bigger secret that the rise of crypto markets has been driven by cheap liquidity pumped into the system in 2020-2021. Earlier, the Fed has conducted three quantitative easing programs, each of which led to the growth of the cryptocurrency market (Figure 1). I think that each of us is able to understand this causal relationship.

This image is no longer relevant

Figure 1: Assets on the balance sheet of the U.S. Federal Reserve and 4 stimulus programs 2009-2021

If we assume that the dynamics of the Fed's balance sheet will develop as it did from 2016 to 2019, when the asset level was at a constant value and even decreased, then this will give an understanding that the bitcoin exchange rate next year will at best remain in the range of $30,000-$60,000, and at worst everything can be, and the scenario of a decline to the level of $20,000 is not the worst option.

These are, of course, fantasies on the topic, but for investors who are planning to buy bitcoin now, "while it is selling cheap," it would be nice to try on just such a negative scenario for your deposit. Naturally, buying for 30 and selling for 60 is a great option, but buying for 45 and selling for 20, I think, will not be liked by anyone.

In the context of the development of this forecast, let's look at the short-term prospects of BTCUSD using technical analysis. As follows from the dynamics of the rate during the daytime, at the moment bitcoin remains in an upward trend, while the strength and length of the correction to this trend allow us to consider scenarios for a further continuation of the decline. In this case, the most negative scenario will be that the corrective decline will develop further, and the price will drop below $40,000 (Fig. 2). In this case, the trend of the daytime will change its direction from an increase to a decrease, which in the future will most likely lead to the fact that the BTCUSD rate will fall to the level of $30,000.

This image is no longer relevant

Fig. 2: Chart of the BTCUSD rate in 3 Line Break format

At the moment, bitcoin traders may consider buying as their priority, but do it exactly until the level of $46,200 is overcome from top to bottom. At the same time, overcoming the level of $46,200 will require them to take a pause in opening long positions and follow the further development of the situation, since in this case there is a high probability that the BTCUSD rate will drop to the level of $40,000, and this level is a local pivot point of the daytime and separates the upward trend from the downward trend.

There is a long-term positive trend in the cryptocurrency market now, but January is a bad month for all markets. According to statistics, over the past 20 years, in 55% of cases, January on stock exchanges closed with a decrease to the opening, which means that investors are rejecting risks, which directly has a negative impact on cryptocurrencies. Therefore, when deciding to trade on New Year's holidays, be extremely careful and follow the rules of money management.

Seleccione el marco de tiempo
5
min
15
min
30
min
1
hora
4
horas
1
día
1
s.
Gana con los cambios en el valor de las criptomonedas con InstaForex.
Descarga MetaTrader 4 y abre tu primera operación.
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    UNIRSE AL CONCURSO

Recommended Stories

El Bitcoin se vende fácilmente

Mientras el mercado debate cómo afectará la legislación sobre las stablecoins, la reanudación de las amenazas arancelarias de Donald Trump deteriora el apetito global por el riesgo y contribuye

Marek Petkovich 13:41 2025-06-02 UTC+2

Los litigios judiciales entre Trump y las empresas sobre los aranceles influirán negativamente en los mercados (existe la probabilidad de que continúe la caída del precio del Bitcoin y del Litecoin)

Los mercados mundiales siguen bajo la fuerte influencia de los acontecimientos que ocurren en Estados Unidos, que tanto en el ámbito político como en el económico se comportan como

Pati Gani 12:57 2025-05-30 UTC+2

Análisis del par GBP/USD. El 30 de mayo. La justicia prevaleció, ¿pero por cuánto tiempo?

El par de divisas el par GBP/USD el jueves se consolidó por debajo de la línea media móvil, mientras que el dólar creció durante tres días consecutivos. Sin embargo, todo

Paolo Greco 07:40 2025-05-30 UTC+2

Análisis del par EUR/USD. El 30 de mayo. Jaque a Donald Trump.

El par de divisas EUR/USD continuó un débil movimiento descendente durante la primera mitad del jueves, pero en la segunda mitad se disparó bruscamente al alza. Vimos un fuerte estallido

Paolo Greco 07:40 2025-05-30 UTC+2

Análisis del par GBP/USD. El 27 de mayo. La libra esterlina se mantiene estable.

El par de divisas GBP/USD continuó su movimiento alcista el lunes. Es importante señalar de inmediato que la situación con el euro es bastante complicada e inestable. El euro

Paolo Greco 07:28 2025-05-27 UTC+2

Análisis del par EUR/USD. El 27 de mayo. El presidente dijo, el presidente cambió de opinión.

El par de divisas EUR/USD reanudó su movimiento alcista durante la sesión del lunes desde la apertura del mercado. Otra caída del dólar estadounidense la semana pasada fue provocada

Paolo Greco 07:28 2025-05-27 UTC+2

El caos en los mercados continuará (hay probabilidad de una continuación de la caída local del #USDX y del precio del oro)

Los mercados continúan actuando a ciegas en medio de las acciones caóticas de D. Trump, quien intenta sacar a EE.UU. de la más profunda crisis integral como el barón

Pati Gani 11:26 2025-05-23 UTC+2

Análisis del par GBP/USD. El 22 de mayo. El mercado vuelve a responder sin ambigüedades a Trump.

El par de divisas GBP/USD continuó su movimiento hacia el norte el miércoles, aunque a primera vista no había razones claras para ello. Sí, el nivel de inflación (el único

Paolo Greco 07:12 2025-05-22 UTC+2

Análisis del par EUR/USD. El 22 de mayo. Un nuevo golpe al dólar: «One big beautiful bill act».

El par de divisas EUR/USD continuó su movimiento ascendente durante el miércoles. El dólar estadounidense lleva cayendo sin pausa por más de una semana, algo que no sucedía en todo

Paolo Greco 07:12 2025-05-22 UTC+2

El Bitcoin se convierte en víctima de estafadores

La confianza en el mundo financiero no solo puede perderla el dólar estadounidense. La información sobre el robo de datos de aproximadamente 197 mil clientes de Coinbase, la mayor plataforma

Marek Petkovich 14:05 2025-05-19 UTC+2
¿No puede hablar ahora mismo?
Ingrese su pregunta en el chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.