Where is Bitcoin Headed in 2022?
The year gone by has been a stellar one for cryptocurrency including Bitcoin. Nearly every form of crypto has significantly increased in value throughout ’21. Though crypto is ending the year on a bearish note, there is plenty of hope for another bullish year ahead.
Bitcoin had a Spectacular Year
All in all, Bitcoin added more than 70% to its value in the year coming to a close. Bitcoin is still the most dominant form of crypto in the entire world. The value of this crypto has dramatically increased across the prior year, outperforming most other securities including precious metals during the 52 weeks coming to an end. Bitcoin started the year around $32,000 per coin. The coin was trading around $20,000 per coin when ’20 came to a close. Fast forward to April of ’21 and Bitcoin reached an impressive $64,000.
The Bitcoin rally is the result of the continued adoption of cryptocurrencies. The addition of more corporations into the crypto space, including institutional investors, helped move the price of crypto that much higher. Even the electronic automaker Tesla started to accept Bitcoin in ’21. El Salvador made Bitcoin the currency of its nation. Add in the renewed interest from retail investors and Bitcoin had the momentum necessary to achieve a new all-time high of $64,000.
Though Bitcoin underwhelmed from May through September, there is good reason for the decline. Some crypto holders fled for the exits during this time in response to China’s ban on all crypto-related activities. China was the site of the crypto’s largest mining hash rate so the hash rate subsequently declined. Bitcoin lost more than half its value, slumping below $30,000 by mid-summer.
Shifting Our Sights to ‘22
The year ahead is likely to move Bitcoin even higher. It is possible bitcoin and other cryptocurrencies will significantly increase in ’22 just as they did in ’21. It is worth noting Jack Dorsey, the former Twitter CEO, left the company to focus on helping Square become a dominant cryptocurrency player. Square even changed its name to Block in reference to the blockchain.
The creation of the Bitcoin Futures ETF launched earlier this year will help generate all the more interest in the cryptocurrency. A Bitcoin Spot ETF will likely be approved in ’22 as the market becomes that much larger and becomes capable of supporting additional ETFs. The SEC might also approve the conversion of the Grayscale Bitcoin Trust to Spot Bitcoin ETF in the first quarter of the new year. Some analysts such as Kate Waltman, anticipate Bitcoin will hit six-figures by the end of this initial quarter.
What About the Technical Side?
Bitcoin’s technical indicators are currently bearish as the coin underwhelmed in the weeks that wrapped up the year. The MACD line is not exactly bullish at the moment. Bitcoin’s 46 RSI reveals there is considerable selling pressure. However, Bitcoin is still trading higher than the 200-day EMA.
Shift your focus to long-term indicators and you will find Bitcoin is performing better than most expected. The crypto is trading well above its 200-day simple moving average of $47,272. Technical indicators have the potential to become even more attractive to those waiting on the sidelines in the weeks and months ahead. Factor in the selling pressure from anti-crypto totalitarians in China reaching its inevitable conclusion and there is the potential for Bitcoin to have even more momentum as ’22 unfolds.