Bitcoin and Ethereum - what to expect in 2022?
Logarithmic TA on 1W shows that the price has already exited the rising green wedge. The price is currently wandering within a second ascending wedge in pink colour. Once the price breaks out of the wedge, it should be expected to go down in proportion to the height of the wedge (thick line shown in purple colour). In support, RSI & MACD show divergence in relation to the rising price. RVI has already broken through 50 - which is the first sell signal. Vertical volumes also continue to fall while the price rises.
I want to emphasize once again that this chart purely demonstrates a position perspective! Locally, on lower time frames, such as 4H, the price will continue to go up and down.
Also, I want to point out that ETH has a strong correlation with Bitcoin. Its local movements may differ, but the global trends remain the same. Bitcoin is the defining cryptocurrency! Therefore, the analysis is based on bitcoin! ETH will follow Bitcoin's lead.
What about the flight to the moon of 100,000 USD?
The main argument for the price to rise is based solely on past cycles. However, this is not much of an analysis as it does not take into account macroeconomics. It's like saying my car has been driving 200 km without a stop and therefore, it should drive another 200 km. No, buddy! You need petrol before you can drive any further.
In 2021 bitcoin's price went up as a result of hedging against speeding inflation in US, which from May remained above 5.4% on average. The only way bitcoin's price is going up is if inflation continues to grow towards 10-15% + a few more trillion dollars are invested into bitcoin capitalisation. If inflation starts to slow down or the interest rate is raised, there will be no need to hedge against further inflation and as a result bitcoin price will fall. Yes, it will reach 100,000 USD, but not in the nearest term.
How does macroeconomics support the downtrend?
1. The FED has already made adjustments to its monitoring policy. Although the interest rate has not yet been lowered, the volume of purchases of financial assets (bonds) has been reduced, which will serve to slow down inflation.
2. There is a real estate bubble in China. Several large construction companies have already defaulted, and the largest Evergrande is already standing on its last breath. The company's shares collapsed.
3. The energy crisis in Europe is in full swing.
4. A recession is coming. Look at the SP500 index on 1W - the price is already at the peak of the rising wedge. No economic growth in 2022-2023 is to be expected!
5. Tether is not going to save the day by creating and pouring more USDT into the market. With their ongoing law suits for market manipulation, lack of auditing and USDT backed by only 2% cash and about 68% by securities and the remainder backed by thin air - is more likely to take a big hit.
6. Lastly, the bankrupted Mt Got (the largest exchange in the past), having lost a lawsuit, is expected to pay compensation to its depositors in the amount of 180,000 bitcoins. The exact date is not known, but it was stipulated to happen in February-March 2022. Would you allow some guy to get 100,000 USD per bitcoin in compensation only to crash the market?
Conclusion
I hope I got my message across. The herd is driven by greed while market makers are looking for liquidity. I will provide a more detailed vision of the price movement in my next article. If you are on the same wavelength - put a like, subscribe, comment!
I want to emphasize once again that this chart purely demonstrates a position perspective! Locally, on lower time frames, such as 4H, the price will continue to go up and down.
Also, I want to point out that ETH has a strong correlation with Bitcoin. Its local movements may differ, but the global trends remain the same. Bitcoin is the defining cryptocurrency! Therefore, the analysis is based on bitcoin! ETH will follow Bitcoin's lead.
What about the flight to the moon of 100,000 USD?
The main argument for the price to rise is based solely on past cycles. However, this is not much of an analysis as it does not take into account macroeconomics. It's like saying my car has been driving 200 km without a stop and therefore, it should drive another 200 km. No, buddy! You need petrol before you can drive any further.
In 2021 bitcoin's price went up as a result of hedging against speeding inflation in US, which from May remained above 5.4% on average. The only way bitcoin's price is going up is if inflation continues to grow towards 10-15% + a few more trillion dollars are invested into bitcoin capitalisation. If inflation starts to slow down or the interest rate is raised, there will be no need to hedge against further inflation and as a result bitcoin price will fall. Yes, it will reach 100,000 USD, but not in the nearest term.
How does macroeconomics support the downtrend?
1. The FED has already made adjustments to its monitoring policy. Although the interest rate has not yet been lowered, the volume of purchases of financial assets (bonds) has been reduced, which will serve to slow down inflation.
2. There is a real estate bubble in China. Several large construction companies have already defaulted, and the largest Evergrande is already standing on its last breath. The company's shares collapsed.
3. The energy crisis in Europe is in full swing.
4. A recession is coming. Look at the SP500 index on 1W - the price is already at the peak of the rising wedge. No economic growth in 2022-2023 is to be expected!
5. Tether is not going to save the day by creating and pouring more USDT into the market. With their ongoing law suits for market manipulation, lack of auditing and USDT backed by only 2% cash and about 68% by securities and the remainder backed by thin air - is more likely to take a big hit.
6. Lastly, the bankrupted Mt Got (the largest exchange in the past), having lost a lawsuit, is expected to pay compensation to its depositors in the amount of 180,000 bitcoins. The exact date is not known, but it was stipulated to happen in February-March 2022. Would you allow some guy to get 100,000 USD per bitcoin in compensation only to crash the market?
Conclusion
I hope I got my message across. The herd is driven by greed while market makers are looking for liquidity. I will provide a more detailed vision of the price movement in my next article. If you are on the same wavelength - put a like, subscribe, comment!
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