Bitcoin price fell short of analysts’ $100K target, but what about 2022?

Bitcoin
(BTC)
is
likely
to
end
2021
well
below
analysts’
target
projections
of
$100,000.
Kraken
CEO
Jesse
Powell,
who
had
also
projected
a
$100,000
price
target
for
Bitcoin,
still
remains
bullish
in
the
long
term,
but
he
does
not
rule
out
a

sharp
drop
in
the
short
term

One
of
the
negatives
that
may
add
pressure
to
Bitcoin
in
the
short
term
is
the
shift
in
the
United
States
Federal
Reserve’s
monetary
policy.
On
Dec.
15,
the
Fed
announced
that
it
would

wind
down
its
bond-buying
program

at
a
faster
pace,
and
it
also
projected
three
interest
rate
hikes
in
2022.


Crypto
market
data
daily
view.
Source:



Coin360

Sam
Stovall,
chief
investment
strategist
of
CFRA
Research,
told CNBC
that
historically,
the
S&P
500
tends
to
post
negative
returns
in
the
12-month
period
when
the
Fed
undertakes
three
or
more
rate
increases.

If
history
repeats,
Bitcoin
could
also
struggle
to
run
away
due
to
its
strong
correlation
with
the
S&P
500
at
various
stages
in
2021.
It
is
difficult
to
predict
with
certainty
whether
investors
will
continue
to
buy
Bitcoin
to
hedge
their
portfolio
against
rising
inflation
if
a
risk-off
sentiment
will
result
in
profit-booking.

With
this
uncertainty,
let’s
turn
to
the
charts
and
conduct
a
long-term
Bitcoin
analysis
to
determine
the
critical
levels
to
watch
out
for.

BTC/USD

Bitcoin’s
sharp
rally
in
2017
pushed
the
relative
strength
index
(RSI)
above
96,
indicating
a
state
of
euphoria
among
traders.
Vertical
rallies
are
rarely
sustainable
and
are
usually
followed
by
a
sharp
correction
or
a
period
of
consolidation.
That
is
what
happened
after
the
bull
move
ended
in
2017.


BTC/USD
monthly
chart.
Source:
TradingView

The
BTC/USD
pair
remained
stuck
below
the
December
2017
highs
until
the
breakout
above
$20,000
in
December
2020.
This
shows
a
large
base-building
period
of
about
three
years.

The
pair’s
sharp
rally
in
2021
propelled
the
RSI
above
91
in
March
before
profit-booking
set
in.
However,
unlike
2017,
bulls
aggressively
defended
the
20-month
exponential
moving
average
($37,281).

This
suggests
that
sentiment
remained
positive
and
traders
were
using
the
dips
to
accumulate.
The
subsequent
rally
drove
the
pair
to
a
new
all-time
high
at
$69,000,
but
bulls
could
not
sustain
the
higher
levels.
This
shows
that
traders
are
booking
profits
on
rallies.

The
sharp
correction
has
once
again
pulled
the
price
toward
the
20-month
exponential
moving
average
(EMA)
and
the
RSI
is
exhibiting
signs
of
a
negative
divergence,
indicating
that
the
bullish
momentum
may
be
weakening.

If
bears
sink
and
sustain
the
price
below
the
20-month
EMA,
the
pair
could
drop
to
the
critical
support
at
$28,800.
This
is
an
important
level
for
the
bulls
to
defend
because
a
break
below
it
could
result
in
a
long
period
of
base-building.

On
the
other
hand,
if
the
price
rises
from
the
current
level,
the
pair
could
retest
$69,000.
A
break
and
close
above
this
resistance
could
signal
the
resumption
of
the
uptrend.


BTC/USD
weekly
chart.
Source:
TradingView

The
bulls
pushed
the
price
above
the
$64,899
level
on
two
occasions
but
could
not
sustain
the
higher
levels.
This
could
have
trapped
the
aggressive
bulls
who
purchased
the
breakout,
resulting
in
a
long
liquidation.

The
20-week
EMA
($52,016)
has
started
to
turn
down
gradually,
and
the
RSI
has
dipped
into
the
negative
zone,
suggesting
that
bears
are
attempting
a
comeback.
The
bulls
attempted
to
defend
the
50-week
simple
moving
average
(SMA)
($47,709)
but
could
not
drive
the
price
above
the
20-week
EMA.

This
could
have
attracted
further
selling,
and
the
bears
are
now
trying
to
sink
the
price
to
the
next
strong
support
at
$39,600.
This
is
an
important
level
for
the
bulls
to
defend
because
if
it
cracks,
the
pair
could
plummet
to
$28,732.

Such
a
move
could
delay
the
start
of
the
next
leg
of
the
uptrend
and
may
keep
the
pair
stuck
in
a
range
between
$28,732
on
the
downside
and
$69,000
on
the
upside.

On
the
contrary,
if
the
price
turns
up
from
the
current
level
and
breaks
above
the
20-week
EMA,
bulls
will
make
one
more
attempt
to
clear
the
$64,899–$69,000
overhead
resistance
zone.

If
they
succeed,
the
bullish
momentum
could
pick
up,
and
the
pair
could
start
its
northward
journey
toward
the
$100,000–$109,000
price
zone
where
the
rally
may
face
strong
headwinds.

Alternatively,
a
break
and
close
below
$28,732
could
result
in
a
bear
market
with
the
next
strong
support
at
$20,000.



Related:




Bitcoin
tests
yearly
moving
average
as
$100K
by
Christmas
needs
‘small
miracle’


BTC/USD
daily
chart.
Source:
TradingView

The
pair
has
been
declining
inside
a
descending
channel
for
the
past
week.
Both
moving
averages
are
sloping
down
and
the
RSI
is
in
the
negative
zone,
indicating
that
bears
are
in
control.

If
the
price
turns
down
from
the
current
level
or
the
20-day
EMA
($50,054),
it
will
suggest
that
sentiment
remains
bearish
and
traders
are
selling
on
rallies.
That
could
pull
the
price
to
the
Dec.
4
intraday
low
at
$42,333.

This
is
an
important
level
for
bulls
to
defend
because
if
it
cracks,
bears
will
attempt
to
sink
the
price
below
the
support
line
of
the
channel.
If
they
manage
to
do
that,
the
selling
could
intensify
further.

The
zone
between
$39,600
and
$37,300
may
act
as
strong
support,
but
if
bulls
fail
to
push
the
price
above
the
20-day
EMA,
the
decline
may
extend
to
$28,800.

Conversely,
if
the
price
rises
and
breaks
above
the
resistance
line
of
the
channel,
it
will
signal
that
the
selling
pressure
could
be
reducing.
The
pair
could
then
rise
to
the
50-day
SMA
($56,524),
which
may
again
pose
a
stiff
challenge.

The
bulls
will
have
to
push
and
sustain
the
price
above
the
50-day
SMA
to
indicate
the
start
of
an
up-move
to
$60,000.
This
level
may
act
as
a
strong
resistance,
but
if
crossed,
the
rally
could
retest
the
all-time
high.


The
views
and
opinions
expressed
here
are
solely
those
of
the
author
and
do
not
necessarily
reflect
the
views
of
Cointelegraph.
Every
investment
and
trading
move
involves
risk,
you
should
conduct
your
own
research
when
making
a
decision.

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