What should we expect from the crypto market in 2022?

What should we expect from the crypto market in 2022?

Bitcoin and cryptocurrency markets have been afloat for several weeks, and showed quite good results. Although some coins are skyrocketing upwards, most of them can’t hold on to their achievements. The mood among investors is fearful, many are tense, waiting for a new collapse. So far, Bitcoin has managed to avoid a deeper correction, but analysts ambiguously assess the short-term development of events. There are also some positive tendencies as well as negative ones. So where will Bitcoin and Co move next?

Bitcoin demonstrates tremendous strength in the face of the global political situation and the accompanying uncertainty. A new collapse did not occur, and the cryptocurrency was able to remain stable in its range, or even grow decently.

In general , according to Coinmarketrate.com, the capitalization of the cryptocurrency market has increased by 3.51% over the past 24 hours, although most coins are practically not moving, and amounts to 2.68 trillion US dollars. Only a few exceptions demonstrate strong upward breakthroughs, including cryptocurrencies such as Celo (CELO), THORChain (RUNE) or The Sandbox meta-hit (SAND).

BTC, for example, lost 3.35% of its value. Source: Coinmarketrate.com
BTC, for example, lost 3.35% of its value. Source: Coinmarketrate.com

On the other hand, Ethereum, the second-largest cryptocurrency by market capitalization, has fallen below $4,000 again since December 28, and has not regained its position to date, and is worth just over 3,300 (data Coinmarketrate.com ).

Price movement of ETH / USD. Source: Coinmarketrate.com
Price movement of ETH / USD. Source: Coinmarketrate.com

Binance Coin (BNB), Solana (SOL) and Cardano (ADA) also suffered losses. The mood in the market is quite alarming. Many investors expect the next crash. The oft-cited “Fear and Greed Index”, an indicator of investor sentiment, is currently at the “neutral” level.

But is it justified? Are those experts who say that the next crash is coming really right? What developments do experts expect, and what should investors expect in the coming months?

Where should the crypto markets move next?

The way Bitcoin and the broader market are behaving now, we have seen too many times to declare a panic fear of the future. Silence and sideways movement is what follows major price corrections of 50% or more. And then, “in the midst of silence,” someone suddenly appears and buys a large amount of Bitcoin, as MicroStrategy did. From a macroeconomic point of view, additional selling pressure is likely.

Today, some analysts say that, “if there is an opportunity for Bitcoin to enter a bear market, then now is the time”. Bitcoin “should” move down, but for some reason it is not moving. This sets the tone for a possible price trend in the coming months.

Michael Novogratz, CEO and founder of the well-known crypto-financial provider Galaxy Digital, believes that surprises are still to be expected. In an interview with Bloomberg TV, Novogratz states: “In the next five years, Bitcoin will grow to $ 500,000.” However, according to the billionaire, there will be no new historical maximum this year. He believes that in 2022 Bitcoin will remain in the range of $30,000 to $50,000. Only after that, the crypto enthusiast expects that the developed regulatory framework will lead BTC and cryptocurrency markets to new highs.

So what to expect next?

First, let’s look at the most important cryptocurrency – Bitcoin.

Traders and chart experts are currently refraining from price forecasts, as the short-term trend seems too unclear. However , the blockchain researchers from Santiment in their recent analysis note: “More and more investors are withdrawing their Bitcoins from exchanges and storing them. In general, this is considered a good sign, including from the point of view of further price dynamics in 2022.

Santiment shows that investors are holding on to their coins – instead of selling. According to the data, there are currently 25% fewer Bitcoins on exchanges than two years ago. Even apart from this, nothing has changed in the fundamentally bullish macro situation of the BTC. Banks and large institutions are switching to BTC, and the adaptation is taking place in leaps and bounds. The development of events may accelerate in 2022.

Ethereum Becomes Ethereum 2.0

One of the cryptocurrencies that will probably – and why probably – surely gain momentum in 2022, along with Bitcoin, is Ethereum. The background is as follows: in the near future, ETH will reach an important milestone. The leading smart contract platform will complete the long-awaited upgrade to “ETH 2.0”. Along with this, the Ethereum blockchain will be transformed from the previous proof-of-work consensus model (PoW, known by Bitcoin) into a proof-of-stake (PoS) model. This should not only make Ethereum faster, but also significantly cheaper (in terms of fees). Analysts expect a lot of interest from the media and the public in this regard. Aspects that can spur a new round of bullish growth.

Metaverse Coins: Is it worth spending time on them?

The so-called metaverse also has huge growth opportunities in 2022 and beyond. This term was almost unknown to anyone until recently, until billions of dollars flowed into the creation of such a virtual world. This attracted the attention of investors to numerous meta-projects and caused a boom in the corresponding coins.

Assets such as Decentraland (MANA) or The Sandbox (SAND) have risen in price by thousands of percent over the past year. It can be assumed that the cryptocurrencies of the metaverse will also be successful this year.

Crypto Markets 2022: What You Should Pay Attention to

But what should we pay special attention to this year? Here are some tips to help you avoid losses and stay safe in the markets:

  1. Do not chase “explosive” cryptocurrencies, even if it seems tempting and “right”: investors are advised not to enter the cryptocurrency when its price skyrockets. It should be remembered that each parabolic rise is followed by a correction, and this makes it possible to buy on the best terms. The rule here is: wait and see.
  2. Make a plan – and stick to it: think ahead what you are going to do with your investments. Should it be only a short-term investment that will probably be sold in the same year with the next strong growth? Then it is necessary to consider the possible tax consequences. Currently, the taxpayer receives losses as soon as cryptocurrencies that have been stored for less than a year are sold again. If we are talking about long-term investments, you can safely perceive sharp fluctuations in prices.
  3. Beware of scams and scams: 2021 was a record year for crypto scammers. According to a Chainalysis report, cybercriminals have been able to steal $7.7 billion over the past twelve months. Losses, a considerable proportion of which could have been avoided with a little caution. No wonder there is a simple principle in this industry: DYOR. This is short for “Do Your Own Research” (do your own research). This means that each investment must be preceded by a thorough study of the corresponding cryptocurrency.

Good places to start are, for example, popular portals Coingecko.com or Coinmarketrate.com. Here you will find many links to additional information about cryptocurrency, for example, white paper. The ticker symbol (for example, BTC) of the coin also helps to find out opinions. Twitter is considered the dominant social media platform for crypto enthusiasts. Almost all traders, analysts and industry observers can be found here. The search is very simple: just enter the appropriate ticker symbol in the allotted field, after which you will receive all the relevant statements on this topic.