There is a sense of anticipation in the Bitcoin market. Were you able to feel it? November and December were supposed to be the months that send Bitcoin straight to the moon in terms of price action. But instead, the price is moving sideways and even slightly downward. Of course, there are those who have panicked and declared that this Bitcoin bull market has ended with a double top. No one knows for sure what will happen, but that's the exciting part anyway. As I mentioned before, the price has been moving sideways for quite some time, meaning that the coil that is Bitcoin's price is being squeezed and squeezed until that built-up pressure is eventually released. And I believe it will happen sooner or later.
Now don't get me wrong, this doesn't mean the price is only going to go up, it could also go down. But I'm more of the opinion that things will move up. Bitcoin started the year on fire, quickly going from around $20,000 all the way to around $65 in about a month and a half. People got extremely bullish and started issuing very bullish year-end price forecasts. These forecasts were so bullish that even an EOY price of $100,000 became a bearish forecast. Instead, we were seeing predictions of $200,000, $300,000, $400,000, and even some crazy people who thought Bitcoin had a chance to reach $1 million. The theory of Bitcoin's "super cycle" began to gain popularity. Of course, these were just predictions, and even the most knowledgeable charting and macro people,
I fully admit that at the beginning of the year I also believed some of these predictions. And why not? We had already reached $60,000 in February. It felt reasonable to at least see Bitcoin increase to $200,000 by the end of the year. My theory is that if Bitcoin had been left uninterrupted, it would definitely be above that price today. But he didn't go without a break, and actually faced some of the biggest obstacles he's ever had to overcome. The important thing is that he continues to survive.
While some people blame Elon Musk for the initial drop in the price of Bitcoin in May. It was just a red herring and what actually caused the decline was fear and excessive leverage. People were getting too bullish and thought Bitcoin might never drop below $50,000 again. And then the ESG FUD started and spread. Everyone was talking about it. Even ordinary people who knew next to nothing about Bitcoin were fed the information that Bitcoin was destroying the world and should be avoided at all costs. And so the price dropped. People were overleveraged and the price continued to fall.
But almost every time there have been dumps, Bitcoin has recovered nicely. Although it was interesting to see that every time Bitcoin went up, it was hit with another round of FUD. Almost as if attacks were planned. But that is a topic for a conspiracy article that I will write some other time. Even extremely old news that we have already seen was recycled and distributed to the media. The China ban, FUD double spending, US government regulation and the list goes on. We also finally saw a huge exodus of Bitcoin mining leaving China. While at the time people were worried about the drop in hashrate and the health of the blockchain, but overall I think it will be a bullish event looking back at it in the past.
And finally we have the virus. This is the black swan event that no one could have predicted years ago, and it continues to impact financial markets. Even just last week, Bitcoin was on the verge of breaking $60,000 and potentially returning to new all-time highs. But just as he was doing so, the new option was discovered and so the prices fell. However, Bitcoin is not stopping and is rising again. But Jerome Powell, chairman of the US Federal Reserve, said at the time that inflation was not transitory. This of course sent the financial markets crashing again. Once again, Bitcoin begins its struggle to rise again.
Bitcoin has had to defy more narratives than at any other point in its life. This time, because of the virus, it's something that came out of nowhere and can't be controlled. With that said, every day that Bitcoin survives and new blocks are mined. This means that Bitcoin has gotten a bit stronger and that is a reason to be bullish. These challenges are exactly what Bitcoin needs. You wouldn't want to have a world currency that hasn't overcome any challenges and hasn't been tested before. In the past, just one of these above FUD moves could spell the end of a bull run. Yet this time it only took a few weeks for Bitcoin to recover. This is something you have to be very open minded about.
The world is different than before and so I see no reason to expect this Bitcoin bull to act in the same way as all before it. Many people believe that the end of this cycle will occur in December or January. As I mentioned, I believe covid changed everything. Instead, this market will expand and may take longer to reach those price heights we all hope to see. After all, this could actually be a bullish thing. The slower we move up, we are able to build more price support than if we move up in parabolic movements.
Either way, it's exciting to wake up every day and see what's going to happen in this market.
What do you think? Why didn't Bitcoin rise in price as many expected? What is your price forecast for next year?