In 2021, Bitcoin became a pre-teen reaching 12 years of age. As is the case with most pre-teens, the emotions can run high as the hormones begin to rage.
2021 certainly felt like a pre-teen year for Bitcoin.
2021 started with a bang
Bitcoin began 2021 trading at a price of $29,000 per coin. Within a few days, the price had rallied to $42,000. A quick 30% correction brought the cryptocurrency back to $29,000. A 44% rally followed by a 30% correction within a single month set the stage as ‘normal’ behavior for this pre-teen.
The price action for the rest of Q1 2021 became hot.
From $29,000, bitcoin rallied to a high of $64,000 in mid-April.
A large crypto exchange goes public (Coinbase)
On the day of bitcoin’s price peak, April 14, 2021, one of the largest crypto centralized exchanges became a public company. This company is called Coinbase. From bitcoin’s peak price on April 14, it then fell 55% to a low just below $29,000.
Did this 55% correction have anything to do with Coinbase’s public stock offering?
Um, maybe. To clarify, it wasn’t Coinbase’s fault as they did nothing wrong. But the sentiment of the crypto market at that time was ripe for a turn lower.
To illustrate, let’s go back in time to 2017.
You see, back in 2017, bitcoin’s price started the year at near $1,000 and rallied to a high near $20,000 on December 17, 2017. December 17 was a Sunday. The following day, Monday, December 18, 2017, a new product of bitcoin futures were launched.
When investors are exuberantly bullish around a product like bitcoin, the price sees massive gains. Then, when a perceived bullish tool like bitcoin futures or a crypto exchange going public gets added into the bullish excitement, it can be a clue to top in price.
Other headwinds to bitcoin’s price appreciation
In addition to Coinbase’s public stock offering, China cracked down on miners. Energy consumption became a hot topic that soured the appetite for Bitcoin. Bitcoin requires electricity to run the computers that solve the complex math problems to ensure no bogus transactions are included. Securing the Bitcoin network does require energy consumption but it was hotly debated how that energy consumption compares to other legacy systems.
In my opinion, these are simply growing pains in the adoption curve of cryptocurrencies.
Q3 and early Q4 see new price highs
After the Q2 2021 correction, bitcoin prices found support and began to rally up to new all-time highs. On November 10, 2021, bitcoin prices reached $69,000. From there, a correction began and the calendar year 2021 closed at $46k.
Can bitcoin’s trends and price movements be forecasted?
The price history of bitcoin can provide us clues about the trends and potential turning points for the cryptocurrency. As an example, here were some forecasts we made regarding bitcoin’s price before the 2021 calendar year started.
On December 28, 2020, when bitcoin as trading at $26k, we made these three forecasts:
“We are in the latter half of wave 3, that could reach $40-$65k, then a 50% correction.”
Result: Bitcoin did reach a temporary high of $64,895 in April, the corrected 55% from April to June 2021.
“The days of bitcoin below $20k are numbered if not gone altogether.”
The lowest price of bitcoin in 2021 was on January 4 at $27,734.
“Bitcoin could make it to $100k by year end making it a 4x return.”
The first forecast was spot on and has been proven true. The third forecast missed the target of $100k pricing making it only to $69k. Perhaps 2022 will see 100k?
The second forecast appears correct as the low price for 2021 was on January 4 at $27,734.
What is bitcoin’s price prediction in 2022?
Our 2022 Q1 forecast was just released on January 8 for bitcoin.
Here are a couple of sentences within the Bitcoin report (important names, labels, and specific price levels have been redacted).
“There are three main Elliott Wave models I am following for the price of bitcoin. Two of the models suggest a ____[trend]____ coming to the ___[price]____ and ___[price]___. I will be sharing these two models below.
The third model is _____[trend]___ and, in my opinion, less likely as it suggests a _____[trend]___ may develop from about ____[price]___ on its way to _____ [price]___. If I see enhanced clues of this model becoming more likely, then I’ll update you when that happens.
The network of bitcoin is appearing healthy though the price has not gained over the past 9 months.”
Quarterly Trends of 2022
In addition to the bitcoin forecasts above, I have four other quarterly forecasts included. Each quarter in 2022, we will review, analyze and summarize what we are expecting for these five markets:
- Bitcoin
- Ethereum
- DXY
- EURUSD
- USDJPY
The price to access the report includes quarterly updates for each market. For less than a cup of coffee per month, you’ll have outlooks and analyses for these five markets.
