Why Bitcoin Isn't Over $200k
There is a feeling in the bitcoin market of anticipation. Have you been able to feel it? November and December were supposed to be the months that sent bitcoin straight up towards the moon in-terms of price movement. But instead, the price has been moving sideways and even slightly down. Of course there are those out there who have panicked and declared that this bitcoin bull market concluded with a double top. No one knows for sure what will happen, and yet, that is the exciting part. As I mentioned before, the price has been moving sideways for quite a while now, which means the coil that is bitcoin's price, is being squeezed and squeezed until that built up pressure will eventually be released. And I believe that will be happening sooner than later.
Now don't get me wrong, this doesn't mean that the price will only go up, it could also go down as well. But, I'm more of the opinion that things will move upwards. Bitcoin began the year on fire, quickly moving from around $20k all the way to around $65 in about a month and a half. People had become extremely bullish and began putting out very bullish end-of-year price predictions. These predictions were so bullish that even a EOY price of $100k had become a bearish prediction. Instead, we were seeing predictions of $200k, $300k, $400k, and even some insane ones were people thought bitcoin had a chance to reach $1 million. The theory of a bitcoin "super cycle" began to increase in popularity. Of course those were only predictions, and even the most knowledgable people dealing with charts, and involved in macro, still cannot promise what the price of bitcoin will be.
I will fully admit that at the beginning of the year, I was also believing some of these predictions. And why not? We had already reached $60k in February. It felt reasonable that we would at least see bitcoin increase to $200k by the end of the year. My theory is that if bitcoin was left uninterrupted, it definitely would be above that price today. But it wasn't left uninterrupted, and actually faced some of the largest obstacles that has ever had to fend off. The important thing is that it keeps surviving.
While some people blame Elon Musk for bitcoin's price initially dropping in May. That was just a red herring and what actually caused the drop was fear and over-leverage. People were becoming too bullish and thought that bitcoin may never drop below $50k again. And then the ESG FUD began, and it spread. It was being talked about by everyone. Even regular people who knew next to nothing about bitcoin had been fed the information that bitcoin was destroying the world and had to be avoided at all costs. And so the price dropped. People were too over-leveraged and the price continued to drop.
But almost every time there were dumps, bitcoin did well to recover. Although, it was interesting to see that each and every time bitcoin was surging upwards, it was hit with a new round of FUD. Almost as if they were planned attacks. But that is a topic for a conspiracy article that I will write some other time. Even extremely old news that we had already seen, had been recycled and given out to the media. The China ban, double spend FUD, USA government regulation, and the list goes on. We also finally saw a huge exodus of bitcoin mining exiting China. While at the time, people were worried about the drop in hash rate and health of the blockchain, but overall I think that will be a bullish event as we look back on it in the past.
And finally we have the virus. This is the black swan event that no one could have predicted years ago and it keeps affecting the financial markets. Even just last week, bitcoin was on the verge of breaking $60k and potentially marching back towards new all-time highs. But just as it was doing so, the new variant was discovered and so the prices tanked. Bitcoin doesn't stop though, and it rose back up again. But then Jerome Powell, Chairman of the US Financial Reserve, spoke up that inflation was not transitory. This of course caused the financial markets to tank again. Once again, bitcoin is beginning its fight to march upwards once again.
Bitcoin has had to go against more narratives than it has at any other point in its life. This time, because of the virus, it is something that has come out of no where and cannot be controlled. With that said, each day that bitcoin survives and new blocks are minted. That means that bitcoin has become a little stronger and that is a reason to be bullish. These challenges are exactly what bitcoin needs. You wouldn't want to have a world currency that hasn't overcome any challenges and hasn't been tested before. In the past, only one of those above FUD movements could have meant the end of the bull run. Yet this time, it only took bitcoin a few weeks to recover. That is something to be very bullish about.
The world is different than before, and so I don't see any reason why we should expect this bitcoin bull run to act the same as all the ones before it. Many people believe that the end of this run will occur in either December or January. Like I mentioned, I believe that covid has changed everything. Instead, this market will be extended and it might take longer to reach those price heights that we all hope to see. In the end, this could actually be a bullish thing. The slower we go up, we are able to build up more price support than if we had moved up with parabolic movements.
Either way, it is exciting to wake up each day and see what will happen in this market.
What do you think? Why didn't bitcoin move up in price like many expected? What's your price prediction for next year?
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