Bitcoin 2022 Scenarios
Many possible scenarios abound for Bitcoin in 2022. It could be a consolidation year or the second leg up of the bull market followed by a bear market. DeVere Group CEO says it is likely three more countries will make Bitcoin legal tender in 2022. El Salvador President Bukele says Bitcoin will break $100K and add two more countries making it a legal tender in 2022. Meanwhile, the number of Bitcoin addresses with a non zero balance continues to grow fast regardless of market sentiment:
One indisputable thing about Bitcoin, is that it’s adoption is so fast, that it will outpace the adoption of the internet in the 90’s. That should happen in the next five years or so. Therefore, can one assume the consolidation Bitcoin has been in for two months now, is temporary and will not last? We think so. At some point, Bitcoin will break out or break down. Volatility is the next aspect of price action we will see. Everytime Bitcoin gets this stable for this long, volatility ensues. We know it will happen, just when is the question.
The next chart below shows the long term trajectory of the 50 EMA and the 200 EMA for Bitcoin. It is called the liquid index for Bitcoin. Based on this chart it could take a while for a breakout from where Bitcoin is. This gives one perspective on this consolidation, accumulation period it is in right now:
This next chart shows the price action more from a bottoming perspective. We cannot tell which chart view is most accurate because the future direction of the price is unclear now. However, the RSI is obviously bottoming in the chart below. That COULD be a good sign:
When RSI gets close to 40, it would normally bounce up once a breakout is reached. Currently RSI is at 45. This next chart shows Bitcoin bottoming at 261.8% of the last bull market ATH which was 20,000. In past retests of this level, it has been a bottom and Bitcoin went on to go parabolic and find the cycle top. We still think this is the most likely outcome for this bull market cycle. We do not believe at all, that the top of $69K is the cycle top. Here is that chart:
This final chart from year of the bull, is a great one. This chart shows the 2 year moving average 5X multiple. That is the red line. The green line below is the 200 day moving average. Cycle tops blow off above the 2 year moving average 5X multiple. In 2021, Bitcoin never got above the red line. That is why we believe, this bull run is NOT over:
We saw fear and greed index at 21 today. Market sentiment is very low, but we haven’t seen the second leg above the 2 year moving average 5X multiple! When will we see that nobody knows, but it is still likely Bitcoin does get above this level. Don’t let the news, or twitter, or social media, make you feel fatalistic about future price action. Bitcoin CAN still get above this 2 year moving average 5X multiple! We need some patience, and charts, with past historicals, that give us clues as to what Bitcoin may do next. We still do not believe in the lengthening cycle, super cycle theory. A Bitcoin cycle is 210K blocks, at 10 minutes per block. There is not much time for the cycle to lengthen, and we still see bear markets as inevitable. Before the halving. Remember, the next halving for the block reward is 2nd Quarter 2024. If anything, it could be a little earlier. So this blow off top and the entire bear market have to complete well before then. Every Bitcoin cycle has looked like this, we have no good reason to believe that it won’t happen again! Accumulate and HODL more Bitcoin. You won’t be sorry.
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