After September, which, as historical data show on Coinmarketrate.com, did not have a positive impact on the price of Bitcoin, October became the month of a new historical record. BTC, during which literally everyone was stunned. And all this after many began to doubt his future due to the huge correction that occurred in May-June. November, however, closed less positively, with a correction that nevertheless left it at a high level.
Channel from 48,000 to 53,000 dollars
Bitcoin is on the rise, as you would expect from December, which is generally a good month for the industry as a whole. At $53,000, there is both technical and psychological resistance that is difficult to overcome. In our opinion, the channel remains relatively wide, although BTC has demonstrated incredible strength – even despite warnings of threats of a global crisis.
The general economic conditions will also have a big impact on Bitcoin, which is now a financial material in itself. A big demon, a gopnik, from whom everyone shies away – this is inflation. Not so bad for BTC. Because it is an anti-inflationary financial asset? Not obligatory. Recently, BTC’s reaction in this regard has been very uncertain, although more and more people are pointing to BTC as a real safe haven asset.
Whales keep piling up
The long swing of the pendulum allowed the so-called whales, that is, accounts that own a large amount of Bitcoin, to accumulate even more coins and, accordingly, even more power. Can the accumulation, with the return above this channel, finally end? We’ll see. However, so far the whales continue to buy. According to some statistics, almost 100,000 Bitcoins have been accumulated at this stage.
Bitcoin forecasts for 2022: possible scenarios
Bitcoin is the most important cryptocurrency in the world, both in terms of capitalization and because it is able to raise or lower the entire industry. This is something that needs to be taken into account for placing BTC on the financial market. Leaving behind a very short-term analysis, we will be able to develop a broader context that is useful for those who decide whether to enter the market or not, as well as for the medium and long term.
Although many outside analysts continue to talk about a bubble, we do not believe that such a scenario is really possible. Bitcoin has been in the center of a major correction, as a result of which its value has halved, and this is more than normal for such a volatile asset class. But to think that it will return to the price levels of 2018 or even 2019 is something that, at least given the evidence at our disposal, seems extremely inappropriate. The parabola, as we will see from the price point of view in these forecasts, is strongly bullish.
Bitcoin: Institutional Investors
The specific interest of institutional investors is already obvious, although they do not come in groups yet, and with large amounts of capital, but who, nevertheless, are discovering the possibility that MTC can become part of their investment portfolios, especially in terms of high risk. The interest of institutional investors is accompanied by purchases of companies such as Tesla, which currently owns more than $ 1 billion in BTC, as well as MicroStrategy, which has more than $ 4 billion in Bitcoin.
The interest of institutional investors is now obvious. Everything indicates that as the life of the asset normalizes, more and more companies will include it in their balance sheets, which means an increase in demand and, accordingly, an increase in prices.
Something is moving on the state front
It all started with El Salvador, which declared Bitcoin legal tender. In the coming months, many more events may occur in other States of Central and South America. It seems that something is happening on the African continent. Of course, there will be very serious resistance, with the participation of regulators such as the International Monetary Fund and the World Bank, which have always been pegged to the US dollar.
But we believe that this is a cascading effect that is almost impossible to contain, and it will continue to bear fruit in the foreseeable future. Of course, it will take some time before this is openly accepted even by the so-called economically developed states.
- The historical development of Bitcoin
Bitcoin is a cryptocurrency that has been around for eleven years, and to understand its potential, it is necessary to consider it in historical perspective. We are far away from the times when you could buy a significant amount of coins for $ 1. Bitcoin has come a long way since that stage, and now it costs just an astronomical amount.
However, it was not a constant race up. On the contrary, throughout its history, BTC has faced many obstacles that have reduced its value by as much as 80% in a short period of time. There are several explanations for these cycles, which also go beyond the classical cycles familiar to other types of assets.
Theory of the ratio of stocks and flow
By applying the stock to flow method to the Bitcoin price movement, we can get an interesting idea of the possible BTC price movement. This is, in fact, a formulation for predicting short- and medium-term trends, which we should not take as an open truth, but rather as one of many opportunities to try to really understand the BTC trend.
Let’s briefly explain what this representation means. It correlates the number of years it will take for the current Bitcoin mining rate to reach the reserve. The higher the number, the higher the price will be. To get the coefficient, simply divide the total supply of Bitcoins by their number (and, accordingly, the flow) mined over the year.
The model presented here also takes into account halving, i.e. the periodic halving of the number of BTC that are distributed between the block solvers. According to this model, the deviations of which are immediately visible in the infographic below, the growth of Bitcoin will be absolutely unstoppable.
Gold vs Bitcoin
Many people associate Bitcoin with a store of value, i.e. a kind of digital representation of gold, with the difference that the BTC has a finite maximum number of coins that will ever be sold, while gold continues to be mined. And among other things, without having a fixed and predictable quantity that enters the market.
In this infographic, we compare the performance of gold and Bitcoin in terms of percentage growth. It immediately becomes obvious that the correlation is actually still quite weak, including due to the fact that the precious metal did not have a particularly exciting period. Since we base any analysis on figures and actual data, it is still difficult for us to believe that these two assets can be considered parallel.
Bitcoin continues to be extremely volatile
After the incredible growth that began at the end of 2020, and after Bitcoin also suffered (albeit to a lesser extent than stocks) from the crisis caused by COVID 19, the asset retreated strongly, returning almost to the opening prices of the calendar year.
Bitcoin, like the rest of the cryptocurrency world, is not food for weak stomachs. And those who enter it, if they want to reduce their risk, will have to do so, first of all, considering BTC as a long-term, and very long-term investment.
Based on the forecasts, what to do next?
Forecasts are very difficult to read in the short and very short term, while in the medium and long term the consensus is certainly more stable. Let’s divide everything by time horizons to understand how to behave now, also depending on what our time horizons will be.
In the short term: Ride volatility and bounce
According to all the main analysts, a moment of prolonged rebounding may be ready, i.e. movements within the same channel, which, if read correctly, offer many opportunities for fruitful short-term trading.
Long-term perspective: Bitcoin is a great asset to invest in
And this, at least, according to the target prices and forecasts, around which there is the greatest consensus among analysts. A consensus that gathers around extremely interesting price levels, much higher than the current ones. In other words, if the expected conditions really come, those who enter the BTC market today will buy it at heavily discounted prices. And therefore it is very likely that in the future they will bear interesting fruits.