There is a fair chance that 2022 might kick off in a good way for Bitcoin. Whether it will be good for all coins is a different questions, we keep on thinking that hyper bi-furcation will kick in crypto markets as per our crypto forecast 2022. That said, we also believe it is fair to start switching to a more bullish stance for crypto as a short term 2022 forecast. That’s because the first signs of stabilization right above 47k in BTC are visible. It’s a little too early to tell but we should now in the next 3 to 4 trading days.
What is it that is attracting our attention on the Bitcoin chart?
Well first of all, the short term timeframe. Although not included in this article the shorter timeframe (which will be made available in our crypto investing research area today or tomorrow) shows solid signs of support right below 46k. It is hard to see, you need not only a trained eye but also the right trendlines and chart structures. But it is visible, and it is the first constructive sign since mid-November.
Second, if we zoom out the daily chart starts showing the first part of the reversal might be nearly complete now. This does not imply that a big bull run is imminent, on the contrary. A lot of hard work is needed, and above all the crucial 46-47k level must hold strong (bulls can only accept intraday wicks) in or below that level).
Here is the point: a reversal has 3 components. First the downtrend, followed by a stabilization and next the start of the right part of the reversal. Only once this process is complete can we reasonably expect a solid foundation for a leg higher.
The first part of the reversal took 2.5 weeks to complete. Assuming that we are near the middle part we can also reasonably expect that a good outcome will take another 2 weeks of base building. But, again, current levels cannot be violated.
We would not be surprised if BTC goes back to 56k in January only to test levels around 59-60k late in January. All this, of course, assumes that global markets don’t crash between now and then. It’s an important assumption.
In our crypto investing research service we are preparing our regular charts updates in 30 distinct coins. This comes with conclusions in which areas potential opportunities might arise, but also when to know that to be defensive.