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Bitcoin has been struggling in recent weeks and is currently trading at $4,912.68 USD per coin, which still seems to be a long way below the all-time high of approximately $20k set on December 17th last year. However, given that Bitcoin has failed to gain momentum after its latest “bull run” and many are predicting an imminent crash or even a major correction over the next few months – it remains unclear whether Bitcoin will continue these downward trends and eventually break free from them.
The “why did bitcoin spike” is a question that many are asking. The cryptocurrency has finally climbed back above $50k, but can it remain there?
After plummeting below $50,000 on December 4th and reaching its lowest position since late September, bitcoin price has just managed to break above the $50,000 barrier level. Of course, a rebound over $50k might have far-reaching repercussions, as it could mark the start of a fresh rally. However, it remains to be seen whether or not this will really happen.
Bitcoin in the year 2021
Even by cryptocurrency standards, Bitcoin has had a pretty busy year. Anyone acquainted with the cryptocurrency sector understands that these currencies never stay stationary for long, yet Bitcoin’s track record is unmatched by any other crypto.
As many of you may recall, Bitcoin has been steadily increasing since March 2020, when its price plummeted due to the worldwide economic crisis brought on by the COVID-19 epidemic. Many now assume that crypto values fell as a result of the stock market’s link, rather than because individuals lost trust in digital assets.
In reality, the reverse is true. Following the steep drop, prices began to rise quickly, finally reaching their previous highs. Following that, Bitcoin began to soar, becoming the leader of yet another record surge.
The currency even managed to achieve its previous all-time high of $20,000 before the year finished, and then surpass it, closing the year with a price of more than $29k per coin.
By January 8th, the price of 2021m Bitcoin had risen to $40,000 per coin, and after a small recovery that lasted a few weeks, the coin began to climb once again, halting just shy of $58k. After a brief rebound in the last week of February, BTC skyrocketed even higher in March 2021, and then again in April, reaching a high of $64,000.
However, after that, things began to go sour for a bit. Around the same time, Elon Musk said that Tesla will no longer accept Bitcoin payments owing to the cryptocurrency’s large carbon impact. Members in the crypto industry are still debating whether or not this was the reason of the subsequent price fall. What is known is that a price collapse occurred in mid-May 2021, which resulted in Bitcoin’s price being slashed in half by the time it was completed.
BTC dipped below $29k for the first price since the initial days of January in late July, bringing the slump to a close. Fortunately, the currency found a solid support level at this point, allowing it to resume its recovery and then begin a fresh rally that pushed it all the way to $68,000 per coin. This new milestone was achieved on November 10th, following which the currency saw another fall, dropping below $45k in early December.
However, Bitcoin has begun to rebound in the previous seven days, bringing it back to $50,000 and even $51k, where it stands at the time of writing.
Will Bitcoin’s recent gains be sustainable?
Bitcoin is back over $50k at the time of writing, December 7th, 2021, following a tough weekend in which its price experienced a short but significant sell-off. The fact that the currency was able to recover came as a surprise to some, but it also gave hope to others.
Now that the currency has risen above this level, even reaching $51k, technical analysts and market experts are watching to see whether it will find support at these levels, or if it will lose its momentum and go back down. Bitcoin had to work hard to get over the $50k barrier, and it had to work even harder to hit $51k. However, it must now do much more effort to avoid falling below these thresholds and allowing the bears to retake control.
Predictions for the currency’s price in the final days of the year were quite positive earlier this year, with some speculating that BTC might reach $90,000 per coin. Something like that seems implausible at the present, yet it is not impossible. After all, BTC has seen dramatic price increases of tens of thousands of dollars in a matter of days, if not weeks.
But, as previously stated, the coin is running out of time with each passing day. According to Joe DiPasquale, CEO of BitBull Capital, the fact that Bitcoin has reclaimed the $50,000 mark bodes well for the possibility of a return to positive price movement. However, in order to completely invalidate the negative trend that took hold at times this year, the currency must retain this as a support and proceed towards many more resistances. DiPasquale has identified $53k, $55k, 58k, and eventually $60k as the most important resistance levels that Bitcoin must overcome in order to defeat the bears.
David Keller, the chief strategist at StockCharts.com, also weighed in on the topic, noting that staying over $50k is the key to Bitcoin’s return to bullishness. If the coin fails to do so and falls below this level, Keller predicts a drop to major supports such as $40k and possibly even $30k — both of which have proven to be critical in the past, and which helped to keep the coin’s price stable earlier this year when it was crashing due to the bearish element.
What does the future hold for Bitcoin?
Any forecasts about Bitcoin’s immediate future can only be pure guesswork at this moment. The currency must first demonstrate that it has the strength to build a $50k support. If it manages to remain above this level, a fresh price rise will almost certainly follow.
Of course, expecting BTC to reach $90k by the end of the year is a touch ambitious, considering the coin’s short time frame and a big $40k disparity between its objective and where it presently stands.
Of course, it’s still conceivable, since one large positive event might spark a bull run unlike any other in history. Tesla is unlikely to accept Bitcoin again since the currency did not address the company’s energy problems, although integrating smart contracts to the Bitcoin network has been in the works for some time.
This has a lot of promise for turning Bitcoin into a development platform rather than having its wrapped version utilized on current platforms. Any breakthrough in these or comparable areas would very certainly result in a significant price increase.
El Salvador and institutional investors aren’t slowing down their BTC purchases, so there’s no shortage of demand. Finally, the US’ effort to regulate the crypto business might have a significant influence on how the industry is regarded in the US, and any favorable developments in this area would almost certainly have an impact on Bitcoin’s price.
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