There is a lot of speculation circulating online that the price of Bitcoin will explode in 2022. Apparently, November’s $69,000 may not have been the peak of this cycle.
Many people are talking about it, especially on Twitter, including some analysts.
This is only a hypothesis, but based on a consideration that seems at least logical.
The price of Bitcoin and the halving
The influence of halvings on Bitcoin price cycles
The price of Bitcoin is subject to four-year cycles that follow the halvings.
Given that May 2020 was the most recent halving, i.e. the third ever, the current one is Bitcoin’s fourth cycle.
After the previous two halvings, in 2012 and 2016, there was always a large speculative bubble at the end of the following year. However, it has not happened during the current cycle.
Analyzing the trajectory of the BTC price after May 2020, it turns out that the end of 2020 triggered a bull run that lasted only five and a half months, until mid-April 2021. The price peaked on 14 April at $64,000.
The price then fell to below $30,000 in July, before rebounding to $69,000 in November. This second bull run of 2021, which lasted only four months, merely brought the price back to just above the April highs.
In other words, there was no end-of-year speculative bubble, as there was in both 2013 and 2017.
It is enough to think that during 2013 there was a long bull run culminating in a big speculative bubble that brought the price above $1,100, starting from $13 at the beginning of the year, while in 2017 it started with BTC below $1,000 and went up to $20,000.
Last year, the price merely climbed from $11,000 in October 2020 to $64,000 in April 2021, without a real big speculative bubble. In fact, after falling, the price rose back to roughly the same levels at the end of the year.
According to some analysts, the lack of a large speculative bubble at the end of 2021 could suggest that the $69,000 reached in November may not actually be the peak of the current cycle.
BTC price predictions
According to PlanB’s stock-to-flow model, the price of Bitcoin could still reach at least as high as $100,000 during the current cycle.
In light of this there are those who believe that in 2022 the price of BTC may at some point rise again, perhaps even to that fateful $100,000. If this is the case, it would be +150% from current values.
To be fair, the current cycle will end more or less around April 2024, with the fourth halving, so it is by no means certain that 2022 will be the year that the $100,000 mark is reached.
Moreover, it is worth emphasizing that these are only hypotheses, without any kind of certainty. In addition, the global macroeconomic situation is heavily influencing the financial markets in 2022, and this is obviously also having a negative effect on the price of Bitcoin.
However, the current crisis in the financial markets is not necessarily going to last, so should the macroeconomic scenario change during the course of the year, the price of Bitcoin could be free to rise again.
It is very difficult to determine the real probability of such a scenario occurring, also because there are still too many variables that prevent us from understanding how the global economic/financial situation will evolve. In a scenario of such uncertainty, it is impossible to have a clear idea of what will happen.
On the other hand, a hypothesis such as reaching $100,000 in 2022 should not be ignored, because if the global situation improves, the potential to reach that figure may still be there.
The fact that the whales are continuing to accumulate BTC suggests that they believe it is at least possible that Bitcoin will increase in value later this year.
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