• Mon. Mar 4th, 2024

2021 Likely To End at ‘Bearish’ Note for Bitcoin

Dec 17, 2021

It seems that Bitcoin is going to welcome 2022 with the pinned down value range of US$ 48,000 and analysts believe that until the end of Q1 of 2022, the Bitcoin market will likely remain variable in between 48k to 50k.

The fear of growing inflation in the world’s economy is debarring the economies of Bitcoin and altcoins from breaking the barricade. Since past 2019, ‘Crypto Fear and Greed Index’ had never seen the worst fear than the one that came along in December 2021. In November, the index was in the “Greed” zone with an average of 71%. The “Greed” has now changed into “Fear” last week with an average of 29% and as of 16th December, the “Fear” remains at 29%.

Even then crypto market saw a short but brief bump when Federal Open Market Committee met with Jerome Powell, Chairman of the Federal Reserve. Perhaps the impetus had come from Fed. Chair’s statement that there is no need to increase interest rates for the time being. However, the present outlook of the crypto market suggests that the market is still diminishing. Since less than two weeks remain in the expiry of 2021, therefore, it wouldn’t be wise to expect an appreciating spike in this period. It is highly unlikely that 2021 will end on the ‘bullish’ and instead it will expire on the ‘bearish’.

A report on Bitcoin’s Greed and Fear Index has been published by Delphi Digital. In this report, the author notes that Bitcoin’s existing value is fluctuating in line with the changes in the sentiment. The analysts argue that the changes are similar to those which were trending at the time of the market downturn. The analyst then concludes that usually the trend is not reversed automatically but instead it fades away with time.

The report further notes that Bitcoin’s present technical setup is such that it needs a major push. It is performing below its 200-day average when the movement is at its highest peak ever. In fact, these days Bitcoin is rather testing its simple moving average of the past 200 days.

Delphi Digital is of the view that a similar pattern was lastly seen in May 2021. At that time Bitcoin market succumbed to a terrifying pullback. It took more than 2 months after the terrifying pullback for Bitcoin to regain its momentum and bring consistency in the value.

Corresponding with the May pullback and uneven present market conditions, coupled with apparent weaknesses, stablecoin transactions and daily volume have increased exponentially. For instance, on 14th December 2021, approximately US$ 57 Billion worth of stablecoins were transacted. In addition, the daily trade volume for stablecoins is consistent in between 10 and 20 billion USD. Consequently, Delphi Digital concludes that further oscillation in the prices of Bitcoin as well as for Ethereum is forthcoming.

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