While market pullbacks and long sideways are not necessarily everyone's favorite, they are good for the overall market cycle. Although we may not see the peak of this market cycle until late 2022 or even early 2023, we are likely to see Bitcoin price much higher than expected.
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The year is almost over, but Bitcoin is nowhere near 100k. If we look back a few months ago, many of the crypto influencers were predicting 300k Bitcoin for September, 100k Bitcoin sometime this year, or a parabolic move towards the end of the year. Even I was pretty sure that we will see Bitcoin around the 80-90k level before the end of the year (although I was not expecting the peak of the market cycle this year).
Instead, what we got was, in fact, quite a 'boring' year with Bitcoin bouncing between 30k and 70k. Sure, we set new all-time highs, and the numbers may seem impressive, but in terms of percentages, you could get 140% max if you bought around 29k and sold around 69k.
Now compare it to 2020, when Bitcoin started the year around 7k and ended around 29k, not to mention the drop to 3.8k at the start of the pandemic. 320% and 650% respectively.
So what's in store for cryptocurrencies in 2022?
While we all know "buy the dip" and "bull markets make you money, but bear markets can make you rich," let's be honest: no one likes market pullbacks. Especially if you bought the dip, but the market keeps falling or we enter a prolonged sideways phase. I'll be honest with you: I didn't expect Bitcoin to drop to 42k a couple of weeks ago, and I didn't expect it to stay below 50k for that long. Bitcoin breaking out and more importantly staying below its bull market support band (20-week SMA), which is currently around the 52k level, is certainly a bit bearish. It is not the end of the year that most of us expected.
Nonetheless, I see it as a very bullish sign for this overall market cycle. We are certainly nowhere near a prolonged bear market like the one that followed the bull run in late 2017 and early 2018. Unless of course we break below the 30k level then all bets are off. A much more realistic scenario is a re-accumulation phase similar to the one we had this summer. Personally, I don't think it's as long as it was in the summer, but I wouldn't be surprised to see a few more weeks of lateral movement in 46-50k territory.
So why am I optimistic?
These pullbacks and accumulation phases give the market a chance to breathe and drastically reduce the chance of the top breaking off, at least in the short to medium term. And the longer the cycle, the higher we go. I was expecting Bitcoin to peak at 120-150k in the spring of 2022. After the last few weeks, I expect the market cycle to peak in the second half of 2022 and for Bitcoin to hit something between 150-200k. I think the longest we can go is late 2022 or very early 2023, and I would expect Bitcoin to rise to the 200-250k range if the cycle stretches that far. However you look at it, time is on our side.
To conclude, we will not see another stage of this market cycle until Bitcoin breaks above its 20-week SMA, which is around 52k and is slowly trending higher. Until we get there, I am using this time to buy more Bitcoin and some of my favorite games and Metaverse Alts (discounts everywhere!) And earn interest by gambling some of my crypto.
Although the fourth quarter of this year was not what many wanted or expected, I believe that 2022 will leave everyone speechless. Personally, I don't think I've ever been this excited to be in the crypto space. Happy New Year!
If you found this article interesting, check out my YouTube channel - I post market comments, my thoughts on various altcoins and NFTs, and tutorials for beginners and more advanced users. I also mention a lot of altcoins and NFTs in my twitter.
Disclaimer The content covered in this article should NOT be considered investment advice. I am NOT a financial advisor. These are just my own opinions, ideas, and speculative theories. DO NOT trade or invest based solely on the information presented in this article.
