This article was written exclusively for Investing.com
- Bitcoin and $ 40,000 pivot points
- Ethereum is close to the $ 2,900 level
- Closer to the January 2022 low than the November 2021 high
- 3 bullish factors and 3 bearish factors
- Tightly wound spring
One of the problems facing crypto asset classes is expectations. After rising from 5 cents in 2010 to nearly $ 69,000 per token in mid-November 2021, market participants have become accustomed to the violent price fluctuations and sales that offer golden buying opportunities. Asset classes are dynamic and have created incredible opportunities for profit. Many market participants who challenged the libertarian medium of exchange and did not have an ideological connection. Their ideology was profit.
When Bitcoin and Ethereum found the bottom on January 24, 2022, both digital tokens went to sleep. The profit ideolog has left the asset class and searched for other more volatile locations, increasing the potential for profits. Bitcoin and Ethereum will enter a dormant state of volatility, continuing in early May 2022.
Bitcoin and $ 40,000 pivot points
After years of volatile fluctuations in the field of cryptocurrencies, the price behavior of Bitcoin and other over 19,150 tokens settled in 2022.
Source: Bar graph
The chart shows that the 2021 range of Bitcoin was a trading band from $ 28,740.04 to $ 68,906.48 and $ 40,166.44 per token. During the first four months of 2022, the range ranged from $ 33,076.69 to $ 48,187.21, or $ 15,110.52. While the 2022 price range for most assets will fluctuate, crypto market participants are now expecting much higher price volatility than ever seen this year.
Bitcoin, on the other hand, has hit higher lows since June 2021. This is a bearish pattern of cryptography that continues to integrate around the $ 40,000 pivot point, which is the midpoint of the 2022 trading range.
Ethereum is close to the $ 2,900 level
Ethereum, the second best cryptocurrency, has also settled in the trading range since the end of 2021.
Source: Bar graph
In 2021, Ethereum’s price range ranged from $ 716.919 to $ 4,865.426 and $ 4,248.507 per token. During the first four months of 2022, it was between $ 2,163.316 and $ 3,888.805 or $ 1,725.489. At the $ 2,761 level on May 1, Ethereum was $ 240 below the midpoint of $ 3,000, the pivot level of the past few months.
Meanwhile, like Bitcoin, Ethereum has hit higher prices since June 2021.
Closer to the January 2022 low than the November 2021 high
With Ethereum at $ 2,760 and Bitcoin at $ 37,950, prices remain much closer to the January 24, 2022 lows than the November 10, 2021 highs. Bitcoin, Ethereum, and many other cryptocurrencies are sleeping in 2022 compared to the activity of the previous year.
On May 1, the asset class had a market capitalization of $ 1.71 trillion, well below the 2021 record. One of the consistent bullish moves in the asset class is the increase in the number of tokens on the market. By the end of 2020, there were 8,153 tokens in cyberspace, ending at 16,238 last year, almost doubling in a year. There were 19,206 tokens on May 1st, and more by the time Investing.com publishes this article.
3 bullish factors and 3 bearish factors
The bullish and bearish factors are pulling cryptocurrencies in the opposite direction in 2022.
- Incredible returns over the last decade have continued to attract investors and traders looking for the next Bitcoin to rise from 5 cents to nearly $ 69,000.
- Decreased confidence in fiat currencies has increased demand for alternatives, and cryptography is filling that void. In 2021, El Salvador made Bitcoin its home currency. Last week, the Central African Republic adopted Bitcoin as its official currency.
- Pick-and-excavator companies that move up and down in the value of futures, options, ETFs, ETNs, and cryptocurrencies are shifting them to mainstream investment assets.
- Storage and security remain a key factor and obstacle to the asset class, as increased hacking is causing market participants to lose ownership.
- The fix from the November 2021 highs cost speculators who bought the cipher too late and too long. Price behavior needs to turn bullish for them to return to the asset class.
- The government continues to hate cryptocurrencies because it threatens the management of the money supply.
These opposite magnetic forces created a narrower trading range in 2022 than in 2021.
Tightly wound spring
I see the Bitcoin and Ethereum highs patterns as a sign of getting out of the 2022 downturn. The technical pattern suggests a substantial move, but it can be higher or lower. On the other hand, odds have an upward advantage due to the reduced confidence in fiat currencies and the advantages of blockchain technology, which is the basis of the crypto asset class.
At the Berkshire Hathaway (NYSE 🙂 annual event in Omaha, Nebraska over the weekend, Warren Buffett said he would never buy Bitcoin for $ 25.Doesn’t produce anything visible.. He also said he would not pay $ 25 for every Bitcoin in the world. Support for crypto asset classes has increased, but the vulnerable hasn’t receded. Last year, Buffett’s partner Charlie Munger called Bitcoin “Disgusting, contrary to the interests of civilization.. “
Bitcoin, Ethereum, and other over 19,200 crypto trading patterns create tightly wound springs that eventually snap up and down. My bets remain up because the FinTech Revolution is a financial evolution.