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  • Long-term analysis of Bitcoin Price in 2022: What will be the market trend in the new year?

    Contrary to the predictions of most cryptocurrency market analysts, Bitcoin ended its work in 2021 with a price of less than $ 50,000. But what will the Bitcoin market trend be in the new year, and what are the key price supports and resistances in 2022?

    According to the Telegraph, the Bitcoin trend ended 2021 with a significant distance from the 100,000$ target that analysts had predicted. Jesse Powell, CEO of the Kraken Exchange, who recently predicted that the price of Bitcoin would reach $ 100,000 by the end of 2021, still has a bullish outlook on Bitcoin performance in the Bitcoin market trend in the long term. However, he does not rule out the possibility of falling prices in the short term.

    The Negative Point

    One negative point that could make sales pressure increase in the short-term is the change in the monetary policy of the US Federal Reserve. The Federal Reserve announced on December 15 that it would continue to move faster than before toward stopping Bond Purchase Program. In addition to this, the government plans to increase bank interest rates in 2022 in three stages.

    Sam Stovall, a capital expert at CFRA Research, said that as the market history shows, during the 12-month period in which the Federal Reserve intends to raise bank interest rates in three or more steps, The performance of the S&P 500 index is also most likely tend to negative efficiency.

    Bitcoin and the S&P 500 index

    Since the price of Bitcoin and the S&P 500 index are correlated significantly over the past year, if history is meant to repeat itself, Bitcoin may be under a lot of pressure just like the US stock market. Fears and the growth of it may drive some market participants out. So, predicting whether investors will continue to buy Bitcoins in the new year to counter rising global rising inflation. That is not an easy task to do, and also, we cannot comment on this with certainty.

    In this article, which has been specially prepared for the beginning of 2022, we intend to examine the price conditions of Bitcoin in the long term and identify key price supports and resistances for the new year.

    Long-Term Analysis of Bitcoin Prices

    Simultaneously with the jump in Bitcoin price in 2017, the relative strength index (RSI) had reached the level of 96, which indicates the over-optimism of traders in that period. These fast jumps in prices are usually not stable and often lead to a deep correction or a long period of price stabilization. This is exactly what happened after the end of the uptrend in 2017.

    Bitcoin Price Plot
    Bitcoin Price Plot

    Bitcoin Price

    The price of Bitcoin was always below the 2017 lows before reaching the $ 20,000 level in December 2020. This means that the market has been involved in the introduction to the recent uptrend for three years. The price jump in 2021 raised the relative strength index above the level of 91 in March. It was before the increase in sales pressure in the market. However, unlike 2017, this time buyers defended support for the 20-month moving average (EMA).

    This shows that traders’ attitudes remained positive after the fall in May, and some market participants were buying on the price floor after the fall. A few months later, another jump in Bitcoin reached took it to a high record of $ 69,000. However, buyers still failed to maintain their position. This means that some traders sell during price fluctuations.

    In recent months, price corrections have once again brought Bitcoin closer to the 20-month moving average, and as the relative strength index position shows, it is likely to continue to decline in strength.

    If sellers can lower prices below the 20-month moving average and maintain their position in that area, the price is likely to fall to the significant support of $ 28,800. Defending this level will be very important for buyers because breaking it can lead to a long-term consolidation period.

    On the other hand, if the price starts a new uptrend from the current levels, buyers will try to reach the level of $ 69,000. The passage and closing of the price candle above this level can be a sign to resume the uptrend.

    Bitcoin Price Plot
    Bitcoin Price Plot

    Bitcoin Price Prediction

    As can be seen from the 1-week market view, buyers have managed to push the price above $ 64,899 twice. But they have failed to maintain their position above this level. This may have trapped traders in the bears’ trap, who have entered long positions (buying) after breaking this level.

    The 20-week moving average is gradually declining and the relative strength index has entered the negative zone. The situation shows that the sellers are trying to take over the market again. Buyers’ efforts to maintain a simple 50-week moving average have been successful so far, But this effort was not enough to push the price above the 20-week moving average.

    Market Pressure

    The current situation could lead to an increase in the selling pressure in the market, and now sellers are trying to lower the price to the strong support of $ 39,600. Buyers have no choice but to defend this level. Breaking this level could drop the price to $ 28,732.

    This could delay the start of the next phase of the market uptrend and push the price in the range of $ 28,732 to $ 69,000.

    Conversely, if the price starts a new uptrend from the current levels and can overcome the 20-week moving average, buyers will once again have a chance to move above the resistance range between $ 64,899 to $ 69,000.

    If they succeed, the acceleration is likely to increase, and the price could make its way to the $ 100,000 and $ 109,000 targets. The area in which sellers are likely to be active.

    And we should add this to what we said, that if the breaking the $ 28,732 support could start the downtrend, in which case the $ 20,000 level will act as strong price support.

    Bitcoin Price Plot
    Bitcoin Price Plot

    The Market Sentiment

    In the 1-day Bitcoin market trend view, the price has been fluctuating in a bearish channel for almost a week. The slope of the moving averages is moving downward and the relative strength index is in the descending zone like the 1-week view. In general, it can be said that market control is in the sellers’ hands.

    If prices continue to fall below current levels or move away from the 20-week moving average, it means that market sentiment is still declining and traders are looking for an opportunity to sell when prices jump. This move could be accompanied by the fall of Bitcoin to the price floor on December 4 at $ 42,333.

    Buyers are supposed to defend this level because if this resistance level gets lost, the sellers will try to lower the price below the channel support, in which case the selling pressure in the market will increase.

    The $ 39,600 to $ 37,300 range will act as strong price support; But if buyers fail to break the 20-day moving average, the downtrend is likely to continue at $ 28,800.

    Bitcoin Resistance Level

    On the other hand, if the price rises and reaches above the resistance level of the channel ceiling, it is a sign of reducing the selling pressure in the market. In this case, buyers will try to reach the simple moving average of 50 days, which can be challenging for them this time as well.

    Buyers should expect a break above the 50-day moving average and stay above this level to reach the $ 60,000 price target. This level is presented as strong resistance to price; But if it breaks, buyers can try to reach the historic high of $ 69,000.

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