Bitcoin price prediction 2022: Can BTC continue to make a comeback?
Can bitcoin continue its recent recovery to hit new heights in 2022?
- Bitcoin’s recent history
- The market and regulation
- Fear and greed
- Bitcoin price forecasts
- Will bitcoin go back up?
Bitcoin had quite the year in 2021 but the start of 2022 has seen BTC falling by significant levels. With BTC the biggest crypto, both in terms of price and market capitalisation, this is something any potential cryptocurrency investor needs to be looking at. What are the bitcoin price predictions for 2022? Let’s take a look.
Bitcoin’s recent history
October and November 2021 were a real boom time for BTC and, therefore, they were a general boom time for cryptocurrency. Starting in late September, the crypto leader went on an extended bull run that saw it break previous records and culminated in an all-time high of $68,789.63 intraday on 10 November. To put this into some context, the coin’s price had dipped below $30,000 in July as it struggled to make a recovery from the Great Crypto Day Crash on 19 May, an event that was, in part, triggered by concerns over the environmental impact of the Bitcoin blockchain.
For an asset as big as bitcoin to more than double in the space of three months is quite an achievement but there was a downside. The rise was followed by an inevitable dip, exacerbated by global market concerns about the Omicron variant of Covid-19.
By the end of the year, the coin was trading at $46,306.45, which represented a drop of nearly 33% over the course of less than two months. The price continued to slide and, as of the afternoon of 21 January, BTC was being bought and sold at about $38,630, a fall of more than 16% since the start of the year and down more than 40% from the high it enjoyed on 10 November 2021. The fall was not over, though, and on the morning of 24 January, bitcoin fell to $33,184.06, the lowest mark it got to this year. Since then, there has been something of a recovery. While upward momentum, which saw BTC trade at more than $40,000 on 4 February, was stalled when Russia invaded Ukraine on 24 February, March saw better times.
A combination of events, such as the news that the banking giant Goldman Sachs was to allow people to trade bitcoin over the counter, coupled with US president Joe Biden’s executive order calling on the United States treasury and other departments to “address the implications of the growing digital asset sector and changes in financial markets for consumers, investors, businesses, and equitable economic growth”, meant that there was a growing confidence surrounding cryptocurrency. Since bitcoin is very much at the head of the market when it comes to crypto, it was able to benefit from the increased positivity and, on 31 March, it stood at $47,177.76. This meant that, ultimately, it was up by a little under 2% from the end of 2021, and BTC was outperforming the crypto market as a whole, which was down a little more than 2% from 31 December to 31 March.
Earlier in 2022, the markets contracted because people had less money, so there was less to spend on risks such as cryptocurrency. Nasdaq, the tech-heavy stock exchange that is probably the one best linked to bitcoin, entered so-called correction territory, where the overall value of the exchange was down 10% from its highest point. This, in turn, led to bitcoin taking some quite big losses at the start of the year. If we remember that the crypto’s all-time high of $68,789.63 took place as recently as 10 November, the drop to where it was in late January was rather disconcerting. Since then, though, Nasdaq has gone back up, which is good news for BTC.
The market and regulation
One of the biggest worries behind January’s fall in BTC is how it would affect the cryptocurrency market as a whole. Since bitcoin is, in the eyes of the public, so synonymous with crypto that any crypto coin that is not bitcoin is called an altcoin (that is, defined by not being bitcoin), any price change to BTC would have an impact on the market in general. Bitcoin is somewhat ahead of the market in terms of its 2022 performance so far, which means that it is entirely possible that other cryptos could end up making further gains in the not too distant future. That is, at this stage, conjecture, so we will have to look at how the market performs in the coming weeks and months to see if that hypothesis holds true.
The regulatory environment, particularly in the US, could also have an impact on what happens to bitcoin in 2022. In December 2021 six crypto CEOs appeared before the House of Representatives financial services committee and said that “some clarity” on regulation was needed. They might just get their wish this year. In March, President Biden issued an executive order, which stongly indicated that, in the eyes of the US govenment, cryptocurrency and, by extension, bitcoin could well be properly regulated and was not something to be seen as belonging to a criminal underworld.
On 19 January, the chairman of the US Securities and Exchange Commission, Gary Gensler, said that he hoped that 2022 would see regulation introduced, telling reporters: “If the trading platforms don’t come into their regulated space this would be another year of the public being vulnerable.” If regulation comes in, then this could lead to confidence and stability.
In addition, with the rate of inflation currently going up, we could see interest rates rising too. While bitcoin is seen as a hedge against inflation, the taps being turned off could equally lead to investors being more cautious when it comes to putting their money into BTC. While things are moving positively at the moment, cryptocurrencies can turn around in a second. Just because bitcoin is the biggest dog in the yard, that does not mean it is immune from such things.
BTC/USD price history
|Mar 29, 2023||27610.40||338.85||1.24%||27271.55||27636.20||27254.95|
|Mar 28, 2023||27270.45||133.65||0.49%||27136.80||27533.70||26633.45|
|Mar 27, 2023||27136.95||-861.85||-3.08%||27998.80||28055.90||26512.95|
|Mar 26, 2023||27998.70||510.00||1.86%||27488.70||28249.55||27441.55|
|Mar 25, 2023||27488.45||-2.35||-0.01%||27490.80||27826.95||27182.30|
|Mar 24, 2023||27490.70||-864.65||-3.05%||28355.35||28438.45||27305.45|
|Mar 23, 2023||28354.30||1034.35||3.79%||27319.95||28847.55||27180.05|
|Mar 22, 2023||27320.20||-855.25||-3.04%||28175.45||28954.70||26662.15|
|Mar 21, 2023||28175.70||368.15||1.32%||27807.55||28527.95||27408.05|
|Mar 20, 2023||27808.20||-260.25||-0.93%||28068.45||28571.80||27234.05|
|Mar 19, 2023||28069.55||1093.60||4.05%||26975.95||28480.05||26905.20|
|Mar 18, 2023||26976.70||-479.85||-1.75%||27456.55||27790.55||26668.25|
|Mar 17, 2023||27455.20||2392.50||9.55%||25062.70||27842.95||24950.95|
|Mar 16, 2023||25062.95||699.65||2.87%||24363.30||25238.80||24200.70|
|Mar 15, 2023||24363.45||-388.25||-1.57%||24751.70||25311.80||23932.45|
|Mar 14, 2023||24752.30||556.20||2.30%||24196.10||26565.80||23996.50|
|Mar 13, 2023||24195.20||1979.75||8.91%||22215.45||24633.95||21872.70|
|Mar 12, 2023||22216.80||1593.50||7.73%||20623.30||22357.40||20449.95|
|Mar 11, 2023||20623.20||411.65||2.04%||20211.55||20875.20||19877.75|
|Mar 10, 2023||20211.20||-149.10||-0.73%||20360.30||20361.05||19560.70|
Fear and greed
One important metric for a bitcoin price analysis is the “fear and greed index”. Put together by Gregor Krambs, from Hamburg, Germany, and his business partner Victor Tobies, the index looks at what the bitcoin price is, the general direction of movement in the market, social media sentiment and the overall dominance of BTC, and assigns a mark between zero and 100, depending on whether the pair thinks investors are being motivated by greed or fear.
As of 24 January 2022, the index was down to a very low 13, suggesting the market was being motivated by extreme fear. This did, though, represent a recovery of sorts, since it had been showing a fear and greed score of 11 on 23 January. For some kind of context, in early December 2020, the index was in the 90s, indicating that people were being motivated by extreme greed. The last time the index was as low as it was on 24 January was just over six months earlier, on 21 July 2021, when the coin had dropped below $30,000 and uncertainty about the market’s recovery was still swirling around traders’ minds, putting the score at 10. There was some recovery in the index’s standings, with it reaching a “neutral” 54 on 9 February before dipping down to a fearful 20 on 22 February. Early March saw a return to a neutral position, reaching 52 on 2 March before dipping down again. Towards the end of the month things got better again and it reached 60 – signifying greed – on 28 March before sliding back to stand at 52 on 31 March.
Bitcoin price forecasts
So, what of the bitcoin price predictions for 2022? Well, on 13 January, Guido Buehler, CEO of the Swiss bank SEBA, said the overall prognosis was for the coin to recover what was, at the time, a drop-off. He said that it was entirely possible BTC would see a new all-time high in 2022, telling the Crypto Finance Conference in St Moritz, Switzerland: “Our internal valuation models indicate a price right now between $50,000 and $75,000. I’m quite confident we’re going to see that level. The question is always timing.
What is your sentiment on BTC/USD?
“Institutional money will probably drive the price up. We are working as a fully regulated bank. We have asset pools that are looking for the right time to invest.”
There is also Bloomberg analyst Mike McGlone, who said in an interview that consolidation around the current level may not be such a bad thing in the short to medium term. He said: “I think bitcoin’s going to $100,000, it’s a question of time by simply watching the trajectories of declining supply, which is a known increase in demand and adoption. I think it just got a little bit too speculative, excessive.
“Here we are now around $40,000; it seems to be in a very comfortable zone within a pretty elongated bull market.”
Talking about his outlook and bitcoin price prediction for 2022, McGlone said that he felt this year could well see bitcoin change from being a “risk-on” asset to being a “risk-off” one, replacing gold as collateral. He added: “I think it is building a good base here around $40,000 and I think it’s more likely to accelerate towards $100,000.”
In early January, Zach Pandl of Goldman Sachs argued that the $100,000 mark was a distinct possibility for bitcoin in 2022. Reuters reported a note from him which said that: “Bitcoin may have applications beyond simply a ‘store of value’ – and digital asset markets are much bigger than Bitcoin – but we think that comparing its market capitalisation to gold can help put parameters on plausible outcomes for Bitcoin returns.” He felt the coin could hit $100,000 if bitcoin’s share of value store rose exponentially. We have asked Goldman Sachs if they can send us a copy of the note, but have not yet received a reply.
Meanwhile, in March, de Vere group CEO Nigel Green told Forbes that he would not rule out the growth of bitcoin to end soon, saying: “It’s now edging nearer to the important $50,000 level. Should it also surge through this key price marker, we expect the current bull run would become supercharged as crypto FOMO would kick in – as it typically does when the bitcoin price shoots up.”
Will bitcoin go back up?
Finally, let’s try something a little different and look at what the price prediction website Gov Capital has to say. This site uses an algorithm to make a BTC price prediction, which can change at any moment, and also hedges its bets somewhat, using a lowest forecast, a highest forecast, and an average forecast. The potential good news for bitcoin investors – if they are willing to trust the site’s bitcoin predictions – is that there is a small possibility of it reaching a new all-time high at some point later this year.
The most negative forecast says that BTC will drop to as low as $41,088 at the start of April and the site forecasts it should spend a good chunk of the early summer trading below $40,000; but it says there will be a turnaround in August and it could break through $50,000 in November when the rise becomes boosted, and it will close the year at $50,804.57.
On the other hand, the average forecast sees it stutter, making brief forays above $50,000 in April, and May before falling back in June and kicking ahead in August. It should break through $60,000 briefly in the middle of November, but then go back down somewhat to close 2022 at $59,770.08.
If we look at the most optimistic forecast, though, we can see why some investors in bitcoin might well be getting excited. The site says that BTC can top $50,000 in April consistently and operate between there and $60,000 until August, when it tops that level. In November, the bulls should be running free and, on 9 November, it could just reach a potential new record price of $70,518.66. After that, though, the coin will slide down somewhat and will close the year at $68,735.59.
A few final points to note. First, forecasts are often wrong. It is important to point out that the idea of bitcoin trading at $100,000 has been something both investors and analysts have been getting excited about for some time now, so it is entirely possible that there might be some wishful thinking going on, especially when we bear in mind BTC’s recent bearish status and the lack of clarity about the immediate future.
Second, bitcoin has a crucial place in the cryptocurrency ecosystem, so the coin’s performance over the coming year is absolutely crucial. If it does well, then cryptocurrency can blossom and if it does badly, we are looking at an upcoming dip. We will need to see if and how the American authorities introduce regulation, too, because that will, inevitably, have an impact on the future of bitcoin. Since things are still rather uncertain, we may well just have to wait and see.
Trade Bitcoin to US Dollar: BTC/USD chart
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Will bitcoin rise again?
It almost certainly will (in fact, it looks like that is what is happening as we write ) but what we do not know at this stage is how long it will continue to rise and what level it will rise to.
Keep in mind that since launching in 2009, bitcoin has operated in four-year cycles, with 2014 and 2018 delivering painful losses. In theory, this means 2022 would be next, but some analysts believe that bull cycles are lengthening and it is premature to be talking about a crypto winter. There is no guarantee they will be right, though.
Should I invest in bitcoin?
This is something that only you can answer, based on your understanding of the market and the amount of risk you are willing to take. Keep in mind that big growth for bitcoin may take several years, and you should be prepared to deal with troughs as well as peaks; as ever, you will need to do your own research on both BTC and the crypto market in general. Remember, bitcoin can be very volatile and prices can go down as well as up, and that you must never invest more money than you can afford to lose.
Is bitcoin a good investment right now?
It might be. It all depends on how the coin moves in the short to medium term. If it does continue to go up, then that would indicate that there is market confidence. If, on the other hand, it starts to fall again, then that would suggest that it might be better to hold off for a little while. Bitcoin is still incredibly young as an asset, just 13 years old. There is still a lot of uncertainty surrounding regulation, and whether another cryptocurrency could come along that unseats BTC as the world’s largest.
While the forecasts seem to be positive, cryptocurrency price predictions are very often wrong, so you will have to do your own research, be aware that prices can go down as well as up, and never invest more money than you can afford to lose.