While a $100,000 Bitcoin is unlikely to occur this year, analysts are optimistic that BTC will end the year above $50,000 and begin the year with a new all-time high.
Stock market bulls who believed that Bitcoin would reach $100,000 by year's end have come to terms with the fact that there may not be a Santa Claus rally to end the year 2021 with a bang. For the time being, the pipe dream has been reduced to simple hopes that the top cryptocurrency will at the very least finish the year above $50,000, as opposed to $100,000.
Following comments by Federal Reserve Chair Jerome Powell, data from Cointelegraph Markets Pro and TradingView shows that the price of bitcoin (BTC) has virtually vanished, with the price having fallen to new lows of $45,500 in the last 48 hours and looking like it may continue to fall even further in the coming days.
Traders weigh in on Bitcoin's recent price movement and their predictions for the remainder of 2021 in this article.
Bitcoin's price action in May is reflected in its consolidation.
As a pseudonymous Twitter analyst, Rekt Capital compared today's price movement to the price consolidation from May to July of the previous year.
It's possible that the price of bitcoin will continue to consolidate and drift lower for another six to eight weeks before resuming its upward trend.
The "bottom" could be as low as $44,000.
Contributor Michal van de Poppe predicted a similar outcome, posting the chart outlining a rough sketch of how Bitcoin's price action might unfold over the next couple of months.
After a short period of consolidation, the upward trend will begin again, according to van de Poppe's chart, which shows a possible drop to the $44,000 range.
The underlying strength remains unchanged despite swings in sentiment.
Last but not least, cryptocurrency analyst TechDev provided the chart, which depicts a more macro view of Bitcoin's price action following each halving period.
TechDev has identified two previous instances in which the Bitcoin price experienced intense periods of volatility, which were then followed by a late-stage rally and blow-off top scenario that resulted in a new all-time high price for the cryptocurrency.
As of this writing, Bitcoin's macro position hasn't changed, according to TechDev's analysis.
According to TechDev's subsequent tweets and responses, the long-term outlook for bitcoin was positive, and that "all eyes are on the retracement levels.
Bitcoin will begin trading at $47.2K in 2022, according to new research, which attributes its performance to the exodus of Chinese traders.
It is possible that the deplatforming of Chinese citizens by exchanges prior to the December 31 deadline contributed to the rise in BTC selling pressure.
As the year 2021 came to a close, Bitcoin (BTC) bears were beaten at the post — and a growing consensus is emerging that China is once again to blame for the currency's weakness.
The "last hammer" from China could now provide reason for optimism regarding Bitcoin.
Bitstamp's BTC/USD rate plummeted $2,000 to $45,630 just hours before the end of the year, according to data from Cointelegraph Markets Pro and TradingView, before staging a modest recovery that brought the price of bitcoin to $47,200.
While a bit of an anticlimax and far below many popular projections, the lack of a parabolic upswing in Bitcoin's price has recently prompted explanations to shift from the cryptocurrency to cryptocurrency exchanges.
Following years of the Chinese government tightening the screws on cryptocurrency trading, users had until December 31 to withdraw their funds from the major Chinese exchanges, which were then required to deregister them.
According to Bobby Lee, former CEO of the Beijing Stock Exchange (BTCC), this represents the "last hammer" in Beijing's arsenal, and one that could have had a significant impact on the selling behavior of the stock market.
According to him, "Perhaps that's why the highly anticipated year-end bull market hasn't taken off yet," according to a series of tweets he sent out on the subject in early December.
The theory was supported by other voices, and Blockstream acknowledged this week that it may be under pressure from offloading Chinese users, who may be selling their BTC in order to withdraw capital, resulting in rising balances.
It could also be a source of future optimism, given the fact that the Chinese exchange overhang will be cleared by the end of this month.
As Blockstream analyst Jesse Knutson explained in the firm's most recent weekly newsletter, "I believe this explains why Bitcoin has historically traded weaker during Asian business hours compared to US and European business hours."
Maintaining your composure in the face of holiday volatility
When looking at shorter timeframes, limited holiday liquidity may provide yet another reason to discount price declines such as the one seen Friday.
It is possible that the price action of bitcoin (BTC) in general will provide an unreliable indication of how the market will perform after Wall Street and institutional traders return.
According to one forecast released this week, Bitcoin ownership will undergo a significant "flipping" in favor of large-volume institutional traders and away from retail investors by 2022.
Looking forward to the year 2022: Bitcoin Prediction
Countless Bitcoiners around the world are looking forward to seeing how the market will fare in the coming year, especially with concerns about inflation and economic instability looming large across the globe as we move into the new year. While this is the case, there appears to be a continued maturation of the ecosystem surrounding the digital asset, as evidenced by the increasing number of conferences and meetups scheduled to take place in 2022.
More people are also becoming aware of the importance of protecting their Bitcoin as the future becomes increasingly decentralized — particularly in the way they spend and receive their coins, as well as the way they facilitate their transactions in a private manner.