Bitcoin price has just managed to breach the $50,000 resistance level after crashing below it on December 4th and hitting its lowest point since late September. The recovery above $50k could have greater implications, of course, as it might signal the start of a new rally. However, whether or not that will truly happen has yet to be seen.
Bitcoin in 2021
Bitcoin has had a very eventful year, even according to the crypto standards. Everyone who is familiar with the crypto industry knows that these coins never sit still for too long, but Bitcoin’s track record is something that no other crypto can hope to match.
As many likely remember, Bitcoin was growing consistently ever since March 2020, when its price crashed due to the global economic meltdown caused by the COVID-19 pandemic. However, many now believe that crypto prices went down due to the correlation with the stock market, and not necessarily because people lost faith in digital coins.
Quite the opposite, in fact. After the sharp crash, the prices started growing rapidly, eventually reaching their former height. After that, Bitcoin started skyrocketing, becoming a leader of another historical rally.
Before the year ended, the coin even managed to hit its former all-time high of $20,000, and then exceed it, ending the year with a price beyond $29k per coin.
By January 8th, 2021m Bitcoin price was at $40,000 per coin, and after a brief recovery that lasted for the next few weeks, the coin started skyrocketing again, stopping just before $58k. Another recovery followed in the final week of February, only for BTC to skyrocket even further in March 2021, and then again in April, hitting the price of $64k.
After this, however, things started going downhill for a while. This was around the same time when Elon Musk announced that Tesla will stop accepting BTC payments due to Bitcoin’s major carbon footprint. Whether or not this was what caused the following price crash is still up to debate among the members of the crypto industry. What is known, however, is that mid-May 2021 caused a price crash that cut Bitcoin’s price in half by the time it was done
The drop finally finished in late July, after BTC dropped to $29k for the first time since the first days of January. Fortunately, the coin found a strong support level here, which allowed it to launch another recovery, and then a brand new rally that took it all the way up to $68,000 per coin. This new milestone was reached on November 10th, after which the coin once again saw a correction that took it down to $45k in early December.
But, Bitcoin started recovering once again in the last 7 days, which brought it back to $50,000, and even to $51k, which is where it sits at the time of writing.
Will Bitcoin’s newest gains last?
At the time of writing, December 7th, 2021, Bitcoin is once again past $50k, after experiencing a rather rough weekend, where its price suffered a brief but notable sell-off. The fact that the coin managed to bounce back up came as a surprise to some, but it also managed to awake hope in others.
Now that the coin is above this level — even going up to $51k, technical analysts and market experts are waiting to see whether the coin can establish a support at these levels, or if it will lose its momentum and fall back down. Bitcoin did struggle to breach the $50k level, and then it had to work even more in order to reach $51k. However, it now has to put in even more effort to not drop below these levels and allow the bears to take over again.
Earlier this year, predictions about the coin’s price in the last days of the year were extremely bullish, with some predicting that BTC could even hit $90,000 per coin. At this moment, something like that seems improbable, although it is still not impossible. After all, BTC has seen rapid surges that took it up by thousands upon thousands of dollars in mere days, let alone weeks.
But, with that said, the coin is running out of time with each day that it spends struggling. According to the CEO of BitBull Capital, Joe DiPasquale, the fact that Bitcoin managed to reclaim the $50,000 level is great for the prospects of resuming bullish price action. But, the coin also needs to maintain this as a support and move towards several other resistances in order to truly invalidate the bearish momentum that took hold at certain moments of this year. DiPasquale has mentioned levels at $53k, $55k, $58k, and finally $60k as the most crucial resistances that Bitcoin has yet to breach in order to beat the bears.
StockCharts.com’s chief strategist, David Keller, also commented on the matter by saying that remaining above $50k is the key to Bitcoin returning to bullishness. If the coin fails to do so and falls below this level, Keller expects it to drop low to some major supports such as $40k and potentially even $30k — both levels that have proven to be crucial, and that managed to hold the coin’s price earlier this year when it was crashing down due to the bearish element.
What is next for Bitcoin?
At this time, any predictions regarding Bitcoin’s near future can only be pure speculation. The coin must first show whether or not it has the strength to create a support at $50k. If it does manage to stay above this level, then a new price surge can likely be expected.
Of course, expecting to see BTC hit $90k is likely a bit too optimistic, given the short amount of time that the coin has to achieve this milestone by the end of the year, and a huge $40k gap between its goal and where it currently sits.
Of course, it is still possible for it to happen, as one major optimistic event could trigger a bull run unlike any other so far. It is unlikely that Tesla will start accepting Bitcoin again, as the coin did not solve its energy issues, but one thing that has been in the works for a while now is bringing smart contracts to the Bitcoin network.
This is something that holds great potential to turn Bitcoin into a development platform, instead of having its wrapped version used on existing development platforms. Any breakthrough in this area, or similar areas would likely cause a great price boost.
El Salvador and institutional investors are not stopping their BTC grab, so there is certainly no lack when it comes to the demand. And, finally, the US’ attempt to regulate the crypto industry might also have a serious impact on how the industry is accepted in the United States, and any positive developments in this regard would likely reflect on Bitcoin’s price, at least to some degree.