Bitcoin predictions for 2022

As usual, many predictions are circulating regarding the possible course of Bitcoin’s price in the remaining months of 2022, but none seem to have a solid basis. 

What is clear, however, is that the price of Bitcoin is now constantly being influenced by macro events, both financial and political and economic. 

For example, the rise over the past two days from $19,000 to $20,500 seems to be very much a consequence of the decline in the Dollar Index from more than 111 points to less than 110. Moreover, last Friday the Dollar Index was still at 113 points, so its descent is actually broader and longer-lasting than it might seem by looking only at today. 

Halving and past cycles: how to use them to make predictions about Bitcoin

For Bitcoin, 2022 is the year of the third major speculative bubble burst. 

The first was there in 2013, and 2014 was the first real bear market year in Bitcoin’s history. 

The second was in 2017, and in 2018 there was a bear market. 

The third took place last year, and 2022 not surprisingly is a bear market year. 

In all three cases, the bubble inflated the year after the halving occurred, although it has been increasingly contained. 

In 2013 it was truly exaggerated, rising from about $10 to more than $1,000 in less than twelve months. After all, the halving occurred in November 2012. 

In 2017, however, it was definitely large, with the jump from $1,000 to $20,000 also in less than twelve months. The halving had occurred in July 2016. 

In 2021 it was not particularly pronounced, with a move from about $10,000 to less than $70,000 in just under a year. The halving took place in May 2020. 

So it is possible that 2022 will replicate the trend of 2014 and 2018, such that it is not to be expected that between now and the end of the year Bitcoin’s price will return close to the highs. 

Indeed, in both 2014 and 2018, the annual low was reached precisely at the end of the year, although in 2018 it was in December while in 2014 it was in October. But in 2015 it fell again, hitting its lowest peak as early as January. 

The differences between the current and past bear markets

There are two main differences regarding Bitcoin’s price performance during the current post-bubble bear market compared to the previous two. Not to mention, however, the fact that the external environment has completely changed. 

The first is that the post-bubble low peak of the previous cycles was touched at about -85% from the previous highs. 

In 2022, on the other hand, the low end so far was about $17,500, while the previous high was $69,000. Hence for now the maximum loss has been less than 75%. 

While this figure suggests that in theory, the price of Bitcoin could still fall well below $17,500 during the current bear market, it also makes it clear how much more restrained the 2021 bubble has been compared to past ones. 

If the 2013 bubble was something truly abnormal, the 2017 bubble was in some ways more understandable. However, the +1,900% of 2017 remains far higher than the +590% of the 2021 bubble. 

Thus, it is also possible that a post-bubble loss of “only” 75%, instead of 85%, can be justified simply by the fact that during the bubble the price did not rise as much as it did in the past. 

The second, much more striking difference is that the post-bubble low of 2022 is for the first time in history lower than the peak of the previous cycle, namely the $20,000 or so touched in mid-December 2017. 

In both cases, these differences might suggest that the $17,500 touched in June might also be the low peak of this bear market. 

But there is also a third difference that seems to suggest the opposite, namely the fact mentioned earlier that in the two previous post-bubble bear markets the minimum peak was touched more than twelve months after the previous maximum peak, while this time it would have been only seven months. 

However, it is worth noting that the past does not always make it possible to predict the future. 

Bitcoin (BTC) price predictions

According to several analysts, the lowest peak of this bear market may not actually have been touched yet. For months now, there have been those who argue that the price of Bitcoin could still fall as low as $14,000 or $13,000, with some suggesting that it could fall as low as $11,000. It is not certain, however, that these lows will be touched in 2022, as the bear market could extend further into 2023. 

The next halving is expected to occur in the spring of 2024, and this could also suggest that the low of the current bear market could be touched in the first half of 2023. 

However, there are also those who argue that the bottom is now behind us. 

In reality, there are not many who claim this. Moreover, those who claim this are not necessarily the ones claiming that the price will go up from now on. 

Among those who claim that the bottom has already been touched, many believe that it is the macro conditions that influence Bitcoin’s price trend. 

In such a context, there are in particular two interrelated issues that would be affecting its value, and which would heavily influence its performance in 2022. 

The first is the war in Ukraine, that is, specifically the fears that the conflict could widen. To tell the truth, however, if this scenario in the past months was considered likely, for the past few days it seems that these fears have subsided somewhat. 

The decline in the Dollar Index proves this since in 2022 the dollar has been the ultimate safe haven asset, even better than gold. 

The second issue is that related to inflation first, and then recession. Again, such fears seem to have subsided quite a bit in recent days. 

In such an environment, it is possible that any major developments in these issues could affect the price of Bitcoin, either upward or possibly downward. According to many until there is important news in this regard, the price of Bitcoin may continue to lateralize. 

The lateralization of the price of BTC

It is now since mid-June that the price of Bitcoin has actually been lateralizing, in a range between $18,000 and $24,000, with rare excursions below and above these thresholds. 

Indeed, since 14 September it has been lateralizing in an even narrower range of $18,400 to $20,300. Yesterday’s crossing of the latter threshold could signal the end of this latest phase of narrow lateralization. 

However, only in the event that Bitcoin’s price returns well above $25,000 would it be possible to say that the long phase of lateralization that began in mid-June has also ended. At this time there does not seem to be any authoritative analysts saying that this threshold could be crossed any time soon. 

However, in case there should be major positive news either regarding the war in Ukraine or regarding inflation and recession (especially in the US), the scenario could change completely and even quickly. However, this is completely unpredictable. 

Finally, it is also worth mentioning again that there are those who believe that the low peak of 2022 may not have been touched yet, but in this case, the reasoning from earlier applies, namely that it could also be touched in the first half of 2023. 

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