Five things to keep in mind about Bitcoin before the end of the year

Five things to keep in mind about Bitcoin before the end of the year

Bitcoin faces the last week of the year in the middle of a more or less calm dynamic, moving at levels ranging from 43,000 to 44,500 euros. However, despite the tranquility, it has been a busy year for the cryptocurrency, from its historical maximum of more than 61,000 euros, to the exile of Bitcoin miners from China due to pressure from the authorities.

In short, 2021 has been the year of the massive adoption of cryptocurrencies and blockchain technology, such as NFTs. That is why, we have asked ourselves: what can we expect from Bitcoin for next year?

-Bitcoin lives more stable times: Christmas is usually a time of great volatility for Bitcoin due to lack of liquidity. However, this year has been very stable, with stocks limited both above and below. This stability could indicate a slow escalation to a level above € 46,000 and place its holding point at the € 50,000 level.

-A new price model: The latest price reduction and corrections that Bitcoin has experienced in recent months, has challenged the model of Bitcoin price flows, since following this approach the price of BTC should be above the € 85,000. The current model of price flows has never been challenged until now, so it is reasonable to think that, looking forward to 2022, new models may emerge.

-Beware of open interests: In 2022 a key area of ​​Bitcoin could be derivatives. Following the liquidation at the beginning of the month, open interest in Bitcoin futures has risen again. Coupled with Bitcoin's price continuing to decline, this could be a tricky scenario. Chain indicators show that sellers are beginning to show signs of fatigue, which could increase price volatility.

-Caution is extended due to liquidity: The Christmas holidays bring a greater number of movements, which could translate into a reduction in liquidity.

-Bitcoin is unpredictable: As 2021 ends Bitcoin traders are becoming more fearful. According to the "Crypto Fear & Greed Index", a popular sentiment index that takes into account certain variables to produce a general impression of traders' emotions, the market today is still at risk of a wide decline. This indicates that the most sensitive traders could sell and cause a snowball effect that will drag Bitcoin and the market lower.

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