​“The capital outflow from the crypto market will intensify.” How the price of bitcoin will change by the end of 2022

The material is not an investment recommendation and is published for information purposes only.

Crypto analyst and trader Jason Pizzino sees the US dollar’s downtrend against other world currencies as a prerequisite for the growth of bitcoin and other cryptocurrencies rates, as people will want to exchange fiat for digital assets, among other things. In this regard, Pizzino believes a sharp drop in the first cryptocurrency to low levels is unlikely, especially to the $10 000 level. Analysts interviewed by GetBlock Magazine commented on the trader’s theses and gave a prediction of the nearest movement of the bitcoin rate.

Today, by contrast, the dollar is in an uptrend, TTM Group founder Vladislav Utushkin objects. It continues to trade above the 200-day simple moving average (SMA), suggesting a continued bullish trend. “Many people are really dissatisfied with a strong dollar because it “shakes slightly” the global economy and could lead to a recession in the United States. We have seen attempts to weaken it, but all this has had a short-term effect,” the expert comments.

Simple Moving Average (SMA) is a key indicator for determining overall long-term market trends, helping traders identify potential areas of support or resistance, as well as indicating whether the trend is up or down. It reflects the average value of a cryptocurrency’s price over a certain time period.

On Wednesday, November 2, the US Federal Reserve System (Fed) Chairman Jerome Powell said that it is too early to talk about easing monetary policy. The Fed raised the interest rate to 4% as planned, which caused a local rebound in the crypto market. “Overall, the dollar index (DXY) continues to rise, and in the near term, I see no prerequisites for a rise in the price of the main digital asset,” Utushkin notes.

“I do not agree that the dollar has entered a downtrend, against some currencies it is standing still, and against some, it is even growing,” comments Andrey Podolyan, head of trading platform Cryptorg. Besides, the dollar index in terms of technical analysis is now at a point of uncertainty, where its nearest future is being decided.

We can agree that the recent revival of the crypto market was provoked, first of all, by the weakening of the dollar against other world currencies, which logically affected trading pairs with cryptocurrencies, believes Nikita Zuborev, senior analyst of Bestchange.ru aggregator. “However, we do not agree with the expert’s further reasoning,” the expert notes.

Even though the volatility of bitcoin in the last 4,5 months remains at an enviably low level, as opposed to the repeated stock market crashes from time to time, cryptocurrencies still remain in the category of risky assets. According to Zuborev, this asset class more often suffers from the uncertainty of financial markets than receives new investment inflows.

Above the resistance level

Pizzino noted that bitcoin’s key resistance is located at $25 000 and the 200-day SMA indicator is also near that area. If the price of BTC manages to overcome it, then, in the trader’s opinion, a deep drop in the rate in the near future should not be expected.

According to Utushkin, it will be possible to talk about a move to resistance at $25 000 only if bitcoin updates its previous high of September 13, above $22 850. So far there is no significant reason for that, the founder of TTM Group said.

“Potentially, we cannot rule out a sharp manipulative jump in the exchange rate to that level to collect a large volume of margin positions with which major players can further strengthen the downtrend and “break” the existing support levels,” Zuborev admits. However, if talking about a confident consolidation above $25 000, according to the analyst of Bestchange.ru, one should not expect it before the middle of 2023.

However, if the BTC price rises to $22 500, it may be followed by significant impulses, Podolyan admits: “[In this scenario] $25 000 will not be limited, we may go as high as $30 000.

Will BTC fall below $20 000

According to Zuborev, the return of the rate of BTC below $20 000 is not only possible, but it looks like the most probable scenario. However, it is unlikely that it will happen in the next few days or even weeks, the expert believes, adding that the mood of the market is still kept in a fairly positive zone.

“Most likely, the New Year’s tradition will continue, and at the end of the year, the capital outflow from the crypto market will intensify. Consequently, the price will be under pressure and potentially will be capable to fall even below the range settled in the second half of 2022, going considerably below the $19 000 mark,” the analyst predicts.

Returning the BTC rate below $20 000 seems more probable today, Utushkin agrees, “I am sure, that is what awaits us in the nearest future. The descending structure is still not broken, so it is not worth talking about a market reversal prematurely.”