On January 2, President Nayib Bukele made several predictions as to how 2022 will be for Bitcoin. In his tweet, he stated that the apex coin will hit $100k, will be accepted as legal tender in two other countries and many more.
Sadly, three days after this projection, the asset dipped below $43k for the first time in the past thirty days. It flipped the $43,000 support and retraced as low $42,413 from $45k in four hours.
A few minutes to the time of writing, the king coin dropped to $40,987. In reaction to the dump, Mike Novogratz predicted that the firstborn coin may find support at between $40k and $38k. Peter Schiff was not left out as it also predicted a drop to $15,000.
Currently trading at $42,000, BTC hitting three figures looks like an unrealistic goal. How high can the top coin go this year and how low? In this article, we will be considering three factors that may determine the digital asset’s price range.
What the Chart Says
We turn to the chart to get a hint of how low crypto’s largest may dip. We note that a previous analysis suggested that we may not see a lot of hikes in the first quarter. The article based this conclusion on some price patterns.
One such pattern, the Moving Average Convergence Divergence (MACD), hints at bearish actions during the current intraweek activity. The faster line is moving closer to the slower line and once it is intercepted, the largest digital asset may be hit with a series of corrections in the monthly timeframe.
Another is the impending death cross – one of the most dreaded phenomena of any instrument or asset. The 50-day MA and 200-MA are closing in on each other. We know based on these indicators that we will see more price drops. How do we get the bottom?
CME Gaps
Based on the rules of this indicator, once a gap is created it will be filled. One such example was in 2021 when there was a trading gap in the CME’s Bitcoin derivatives product, dating back to a February rally. Prices lagged at $38k while Bitcoin went on to hit new highs.
The CME gap got filled the next month. Now, there is another trading space seen between $34,300 and $32,700. Historically, these gaps are almost usually filled, although ‘when’ it is filled is still a question that only time can answer. Nonetheless, we got a glimpse of how low BTC will dip.
Market Sentiment
Last year, the Fear and Greed Index got as high as 95 and saw a low 10 which indicates that the bears had the spotlight and thrived. At the index peak in the second month of 2021, bitcoin hit a high at $58k. In November, the same metric saw the top coin surge to an ATH of $69k.
Based on recent activities, we observed how the Fear and Greed index heralds a new all-time high. The index hitting 90 may signify a sustainable surge to a new ATH. How high? We note that since 2018 BTC has hit marks that are 100% higher than the yearly start. We may also conclude that the top coin may $94k with the next 11 months.
