2021 – The Year of FUD, FOMO, and Wild Swings In Bitcoin
We have to admit that 2021 has been a wild year for Bitcoin, with multiple swings, gains that topped 100%, and losses that seemed unrecoverable… until they were completely recovered. We started the year around $30,000 and by mid-April, BTC was ruling the markets at $64,895, almost turning the “To The Moon” memes into a reality.
Now, the only way to go is up, right? Wrong! Just a month later, Bitcoin was again trading at $30,000, reaching a low at $28,600 by 22 June. That price point turned out to be the year’s low and after more than 2 months spent ranging between $30,000 and $40,000, Bitcoin finally broke out and pierced $50,000 resistance before making a retracement that erased more than 20%, re-testing $40,000, and turning it into support.
Things looked uncertain as a drop below $40,000 would have meant that the bulls couldn’t sustain the uptrend, which would send the market into a selling frenzy. However, that selling frenzy was not in the cards for Bitcoin, as $40,000 support held and price once again exploded, hitting a new All-Time High at $67,016. This massive climb took less than a month but the rocket still had fuel and 20 days later, BTC hit another ATH at $69,000.
In typical 2021 fashion, a big climb is followed by a big drop and right now we are in the bearish phase. After hitting the last ATH, Bitcoin dropped to a low of $42,000 before starting to move in a range between $47,000 and $50,000. When will it exit this tight range and what’s in store for 2022? Let’s try to find out.
Chart Analysis – BTC/USD
After a brief visit above $50,000, Bitcoin dropped again below this key handle and is again hovering on $47,000 support. This narrow range is uncharacteristic for BTC, which is known for its volatility; even if it moves sideways, the period is usually short and is followed by a strong breakout.
Assuming that a breakout is imminent, the next step would be to find out the direction and the key for that is $47,000 – $45,000 zone of support. This zone combined with the long-term bearish trend line that is in close vicinity, could act as a springboard that sends price above the 50 days Moving Average.
A break of the mentioned support zone would mean that the bears are still in control and that price will move closer to the $40,000 mark. However, 2021’s pattern has been UP – DOWN – UP – DOWN and if this pattern continues in 2022, then we are looking at an UP period. Well, 2022 is right here, so we will get our answer soon.