Bitcoin closed the first month in 2022 with a negative note. The worst start to the year since the beginning of the 2018 “crypto winter” was January, which saw back-to-back falls. The’red line’ for February indicates a further decline. Experts predict that Bitcoin’s price will continue to rise despite the current crisis. This is expected to result in Bitcoin’s incredible year. It is predicted that Bitcoin will reach US$100k by Q2 2022. The experts also predict that BTC will rebound to US$50k within the first quarter.
Bitcoin was the first cryptocurrency to hit the virtual marketplace. Although there are many mysteries surrounding Bitcoin, it remains the most popular crypto asset. Bitcoin’s value has reached new records every day since 2020. The cryptocurrency has experienced a few bearish periods and slumps, but overall it recorded remarkable growth over the past few years. Unfortunately, Bitcoin is currently in a negative phase.
The cryptocurrency has been trending downward since November 2021 when it reached an all-time high at US$69,000 2022 began on a very bad note, with Bitcoin close to touching its psychological resistance level of US$30,000. Surprisingly, January saw only 11 days of growth for the cryptocurrency, meaning that it has spent more than 65% of the month in decline. Other altcoins such as Ethereum, Solana and Cardano also suffered from a downturn. Even though the market is looking very unsettling, experts still believe Bitcoin could be making a comeback and reaching a record-setting high in Q2 2022.
Why Bitcoin Crash
Although there are many factors that contributed to Bitcoin’s fall, the primary reason is the market uncertainty triggered by the Federal Reserve’s announcement towards the end 2021. The Federal Reserve announced plans to raise interest rates and tighten regulations. Many investment options, including cryptocurrency and the S&P 500, were hit hard by this announcement. Even tech stocks are experiencing constant declines.
However, there are also countries around the world that have developed regulations and new measures in order to reduce cryptocurrency use. The Central Bank of Russia proposed that cryptocurrency trading and mining in Russia be banned. The UK and Europe are also working together to create a new regulatory framework. Even countries such as Singapore, which were previously very quiet about cryptocurrency usage, are now urging governments to put restrictions in place. The Indian Finance Ministry announced recently that all cryptocurrency profits will be subject to a 30% tax.
Crypto Winter and ‘Correction Phase
There has been much concern about a coming ‘crypto-winter’ due to the steady falls and sharp selloffs in the digital currency markets. The crypto winter is a significant bear market in digital currency history. It occurred in 2017-2018, when Bitcoin prices plunged as high as 80% from their all-time highs. Some believe the so-called “crypto winter” has already come, but enthusiasts view this period as a correction’ time.
The fall will be more severe if Bitcoin is considered a ‘crypto winter” asset. BTC will reach US$15,000. If it experiences a price drop of more than 80%, then that would be a major problem. However, this is not the case right now. It has experienced a 30%-50% decline, which suggests that the cryptocurrency is in correction territory. There is no guarantee that Bitcoin will make a comeback, but there aren’t any guarantees about the claims. It is a sign that things are really out of control if it drops below the US$30,000 resistance and remains there for more than a week.
Is BTC’s price at a new record in Q1?
Bitcoin’s performance is heavily dependent on its network activity. This will be the guiding light for the remainder of the year. BTC must undergo a huge correction to reach US$100k by Q1. It did so in 2017. To reach the resistance level, Bitcoin must rise 110% from its current price. It is possible, even though it seems impossible right now. However, it has been done in the past.
Bitcoin Priced at US$100k for the Second Quarter
Bitcoin struggles to overcome the US$100k barrier. People believed that Bitcoin would reach this psychological level easily by the end of 2021. The cryptocurrency market plunged into darkness and things turned around. Experts in cryptocurrency predict that BTC will make a sharp correction in Q1 and hit US$100k in quarter two.