Welcome back to another Newsletter, In this newsletter, we will be breaking down the current market conditions for Bitcoin, Ethereum, and maybe some other exciting positions that have caught my interest over the past week. I am going to be writing these newsletters every week, sharing my technical analysis and unbiased opinions as someone who has actively traded this market over the past four years.
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I will be heavily focusing on my written content moving forward, not only writing wider macro market breakdowns but also covering some of my more active investments, passive income streams, and equity deals with the crypto space. If you are new here and would love to keep up with my weekly newsletter, please subscribe.
Also just before we kick off this newsletter, I want to share some of the terminologies that might appear in the content below as we discuss technical analysis;
PA = Price Action, HTF = High Timeframe, LTF = Low Timeframe, S/R = Support/ Resistance, ATH = All Time High, ATL = All Time Low, EQ = Equilibrium
We all know 2021 was one of the best years we have seen in the cryptocurrency space, with lots of volatility to the upside, new market utilities being born, and overall a very strong and bullish year as a whole for the space. To kick off the new year, I thought it would be a good idea to cover my thoughts and predictions for 2022 as a whole.
Looking back now at 2021 zooming out and just seeing price over a larger span, price has been pretty sideways in the macro, seeing large upside and large downside over the past 12 months. In the early part of 2021 we were obviously finishing off the peak of our first major cycle to new ATH’s, a historic moment for BTC. It’s impressive seeing BTC trade sideways at these higher prices over this extended period of time.
This takes me into my first talking point for predictions, market maturity. I think that this year we will see the continuation of a maturing market with larger institutions taking active positions, the growth of retail consumers, and also the possible addition of a spot ETF for BTC, which will have a direct impact on the price, unlike futures. What does this mean? Well, I think we see a lot more volume and a decrease in % movement for BTC overall. I think the days of 80% pumps or corrections are going to be hard for the price to deliver, the market is harder to move and generally speaking for ‘crypto’ I think we see less volatility over short periods of time.
I do also believe that this year we will see a spot ETF for Bitcoin in the US. We already have a futures ETF and while that is great so some general sentiment, it does not really have a direct effect on retail investors and the broader market who likely do what to add Bitcoin to their portfolio. Not only do I think this could happen in 2022, but I also think this is the catalyst we need for $100,000 price targets to be successfully met and achieved in the future.
Ethereum for example has an extremely bullish chart over the past 365 days, and I think it is defiantly a higher chance that we need to correct even further from where we are at the moment and fill in some key levels that are lower. This goes for Bitcoin and a majority of other larger-cap coins that have yet to see these levels retested. So as a prediction for the year, I think we see a heavy correction across the board, and even though I said this already in Q4, I think we can even go lower from where we are at the moment. I would not be surprised if ETH saw a retest of low 2000’s and BTC got to see low 30’s at some point in 2022, this could happen in the next few weeks. Getting this out of the way earlier in the year might be the best option for a strong profitable year for most investors in the space.
That said, I do think this year can be a very good year for crypto as a whole. I think that if a person bought ETH, BTC, and SOL today, at this 30% discount already, I think that they would be in good profit before this year comes to an end. I think we see new ATH’s within this year for the majority of high marketcap projects.
If I had to take a while prediction on what the market will look like if we fast forward 1 year and zoom out, I think it looks something similar to what I have drawn above, obviously, this is an impossible prediction to make. The main thesis is this;
We see a correction in the first quarter of the year.
Price recovers, buyers step in and we see a yearly low, early this year
Price has a blow-off top later in the year, setting a new ATH over a very short period of time and then having a very fast and aggressive selloff.
I think the market is still generally hot and with 2021 holding so well in terms of overall leaning macro sideways, I think we have a blow-off top style move coming this year, NFT volume is still through the roof while the market is falling which shows people are still looking for interesting plays and the onboarding of new wallets and new users is still greater than ever. I do not think that dump money and new investors are scared of this -35% drop, and I think we see macro support step and we bounce before anyone has time to really question their short-term investment decisions.
A further prediction I have for 2022, is that we will see the top of an NFT market bubble, while I am bullish on NFT’s and I hold a pretty large stake in a majority of collections. I really do believe that what we are seeing with NFT’s is a bubble, big or small I am unsure but this behavior we are seeing, almost any PFP project is selling out in seconds, 99.5% of the investors are only investing for a potential flip and likely at some point we see very harsh and aggressive drops in all NFT prices. I think NFT in the macro is here to stay, I think the technology will be adopted by a majority of events, sports, and fashion brands over the next decade, but the price is out of sync with reality and I would predict the majority of floors will be close to zero.
I think that 2022 is going to be a huge year for DeFi protocol tokens, DAO tokens, and guilds. I think DeFi products are going to see a huge increase in TVL and adoption, even more than we already saw in 2021, these platforms such as convex and curve have already shown us the power of similar protocol tokens and I am betting heavily on continued growth for existing and new platforms. I think L2’s for ETH like Arbitrum and Polygon are exciting positions to watch if prices continue to fall, as L2’s likely have a lot of room for growth and some products shift away from the high gas fees on Ethereum and the slow network state. I also believe that Solana and Avax are going to be strong gainers in 2022, also wise to broaden your portfolio to competitive networks.
I think Ethereum hits $7500 in 2022.
Thank you for reading this Market Breakdown, If you did enjoy it and would like to stay up to date with any of my technical analyses moving forward, please do subscribe it would mean a lot to me as we grow this newsletter.
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