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Bitcoin has ended 2021 ambiguously, remaining in a wide fluctuation range with no hope of resuming growth any time soon. However, the cryptocurrency continues to attract large investments and leaves no doubt that 2022 will start with a strong growth phase. Market majors are resuming their hoarding period and we can expect crypto to resume its uptrend as early as January.
The main reason for optimism about Bitcoin in January 2022 was news of investment injections from key cryptocurrency players. Digital gold fan Michael Saylor said on Twitter that MicroStrategy had acquired another 1,914 BTC at an average price of $49,229. In total, the company owns 124,391 BTCs, equivalent to $3.75 billion. The average purchase price per bitcoin is $31,159. Notably, every time Saylor acquired a BTC, the cryptocurrency started a bullish rally.
While MicroStrategy's situation has long been clear, Morgan Stanley's rise in investment flows into the Grayscale Bitcoin Trust has caused a market boom. The bank reported that at the end of the third quarter it owned 1% of the assets under management of the BTC trust. Banks in the US often invest in bitcoin-related products, but large investments by key market players indicate a belief in the continued growth of the digital asset.
Bitcoin continues to attract institutional investment. Arcane Research is confident that it will continue to be the most profitable financial instrument next year. Despite this, we should expect the flat BTC/USD price movement to continue in early January. Most likely, the peak of profit-taking and volatility in the market will end on January 2-3, when the main positions will be closed and the market will start another phase of accumulation. During this period, I expect trading activity to decrease and pressure on the price to increase. The combination of these factors will ensure a bearish break of the $46k-$45k support zone. Subsequently, I expect a decline into the $42k-$45k area and a full-fledged local bottom formation. This will require some time in this range, which should be used to build up positions. The key support zone here is $42.5k.
There was a similar scenario in the summer of 2021, when a false breakdown of the resistance zone was followed by a flat movement with accumulation. Given increased volatility and a local sell-off due to the year-end, the consolidation period will drag on and the asset will resume an upward movement in mid-January. The final part of the monotonous period of BTC/USD price movement is still to consolidate above $52k and further rally to $56k-$58k. However, we should not expect a strong rally in the next two weeks.
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