Bitcoin Road To $100K — Managing Expectations As We Enter 2022
Welcome back.
Hope you all had a restful weekend. November failed to be a Moonvember. But as I reiterated in last week’s article, we used this month to clear excess leverage and consolidate. Even though the whole crypto space feels bearish given all the angry comments and Doomsday posts, the bull market is very much alive and chugging along. Now, let’s ask the question. Can Bitcoin reach $100,000 by the end of the year? Can it do that in the next 30 or so days?
Probabilistically speaking, it’s highly unlikely. To reach $100,000, Bitcoin needs to increase by roughly $1,300 every day until December 31. In other words, the bull market will most likely extend to Q1 of 2022 at least. Although I considered this scenario less probable at the end of the summer lull, I now consider it more probable. The cycles seem to be lengthening after all. That said, I wanted to share three important things for all of us to keep in mind.
There will be shakeouts along the way. Because there will be people taking profits along the way. The difference is that dips in a parabolic run will recover much faster due to the sheer volume and intensity of the FOMO kicking in. But when you are in the thick of it, it can be hard to tell. That’s why it’s important to take partial profits on the way up.
There might NOT be a violent blow-off top. You might think Bitcoin is too volatile but it was much more so during previous cycles. Pumps were bigger, dumps were bigger. Now with all the institutional demand, mass adoption and public awareness of crypto, I suspect it will be more difficult to get a proper feeling of the parabolic run. Another great reason to take profits on the way up and never try to time the top.
There will be a huge crash into a bear market. With all the bullish things that are happening across the world, crypto may feel invincible. I see many comments like “It’s different this time. With mass adoption, Bitcoin will go up forever. No bear market.” I agree that Bitcoin will continue to go up in the long term, but I still expect at least a 70% crash and a bear market. Below is an extremely rough idea of how this cycle top and the ensuing bear market might play out.
These caveats are by no means guarantees. But I think they serve as realistic reminders to help us better navigate the rest of the bull cycle. Please let me know what you think down below and let’s continue to stay level-headed and flexible as Bitcoin climbs its way up to $100,000. The road ahead is rough and windy but it will be worth it. Cheers and see you in the next one.