Its capacity to accomplish this is constrained by a number of things, but a few wildcards could just work.
In May, the price of one bitcoin (BTC 1.27 percent) fell below $30,000. Even though a price gain of 3.3 times may seem unattainable for some people, this kind of development is not unheard of, especially for Bitcoin.
Following the market turmoil brought on by COVID-19 in March 2020 that caused a 40% decrease in Bitcoin, the cryptocurrency rallied more than ten times over the course of the next 12 months. Although past performance cannot be used to forecast future performance, we may be able to use analogies to increase our confidence in market direction predictions.
Concern with bitcoin
While market euphoria is defined by greed, severe market downturns are accompanied by a pervasive undercurrent of dread. May 2022 is a time of worry, both in the Bitcoin market and the stock market, according to any fear and greed index. If the number is low, we are getting closer to total fear, and if it is high, we are getting closer to entire greed. Early in May, the index fell to a low of 10, which is barely on par with the low of 8 on March 17, 2020.
The fear and greed index is only a surface-level indicator of market mood, thus it shouldn’t be the deciding factor in your trading approach. It only offers a piece of information for assessing the underlying market circumstances.
Expert traders and influential investors like Robert Kiyosaki continue to believe that Bitcoin has more room to fall before it can begin to rise. According to Kiyosaki, Bitcoin may drop as low as $11,000 or as high as $17,000. In the event that the stock market itself continues to decline, these values are valid. Part of it may involve increasing the sell-pressure on Bitcoin as traders and institutional investors abandon risky positions. Since Bitcoin is still viewed as a hazardous asset, there could not be enough buying activity to sustain Bitcoin over $20,000 at any one time.
How Bitcoin may increase to $100,000 in 2022
There aren’t many prospects for a comeback, and it seems like Bitcoin and the rest of the market are in a serious decline. Since Bitcoin is unlikely to hit $100k by the end of 2022, in my opinion. There are, however, a few catalysts that may start a traditional Bitcoin rally and drive the price upward.
For instance, the Federal Reserve intervened and introduced quantitative easing while the stock market was collapsing in March 2020, perhaps sparing the market from an impending collapse. The technique of printing additional money to purchase bonds and assets is known as quantitative easing. By lowering interest rates and maintaining a minimal degree of market confidence, this supports the economy.
A recurrence of March 2020 is possible if things significantly worsen in the traditional markets, which would result in more interest in Bitcoin and other public markets. In the past, quantitative easing has increased market activity and the value of publicly traded assets. There is no exemption here for Bitcoin. After the start of quantitative easing in March 2020, Bitcoin increased by around 600% by year’s end.
The further institutional and governmental embrace of Bitcoin is the other trigger that merits investigation. Historical Bitcoin bull runs have generally been the consequence of supply shortages coupled with rising demand from retail buyers. However, there is now a compelling value proposition for both enterprises and nations wishing to protect themselves from systemic currency inflation. Despite a 50% decline from all-time highs in late 2021, Bitcoin continues to be perceived as a reliable store of value. According to this theory, businesses like MicroStrategy (NASDAQ:MSTR) and Block (NASDAQ:SQ) keep buying Bitcoin to fight inflation and maintain the purchasing power of their treasuries over a number of years.
