Bitcoin breaks a price record again! The coin set a new all-time high of $66,930.39 on October 20, 2021. How did this advance come about? BTC broke above $60,000 in March 2021, and after a short-lived drop, continued moving upward. It has been a turbulent year, both inside and outside the Bitcoin scene. Time for a brief look back: what big things happened in the world of Bitcoin, and how did this beautiful record market price come about? And what can we expect from the crypto-king next? Will Bitcoin go up even more? Let’s find out in our Bitcoin coin review!
Bitcoin in Short
We’re sure you know, but Bitcoin is the best-known digital currency (also known as cryptocurrency). It was the very first decentralized currency that works by means of blockchain technology. The native token was launched in 2009, in the midst of a global financial crisis. Because many people were suspicious of banks, Bitcoin immediately won the interest of a large group of people.
The system allows you to send “money” to someone else without the intervention of a third party. The data is not managed by one person but by all users of the network. This makes it one large decentralized database of transactions.
Bitcoin Price History Before 2021
First of all, let’s address the price development of Bitcoin since the beginning. In the image below, you can clearly see the various major events and the price increase.
Bitcoin Crash in March 2020
2020 started with bad news. From February to March, Bitcoin fell from over $10,000 to below $4,000. However, the crash wasn’t just in the crypto market. It was a full-on economic recession because of the COVID pandemic. For example, the AEX (the stock market index) closed with the largest drop since 1987, a drop of more than 10%.
Bitcoin Halving in May 2020
The halving event happened on May 11. The new reward per block was set at 6.25 BTC, which was the new era for Bitcoin. So, the number of bitcoins circulating became even scarcer, which also coincided with people receiving their stimulus and money packages. Because of the higher demand and lower supply, the price rose.
Bitcoin Core Update in June 2020
The next on the Bitcoin news were changes within the network. As upgrades usually cause price increases, they’re important news. Bitcoin Core is responsible for everything in the ecosystem, the update for which was released on June 28 by 119 developers. OpenSSL was removed from the code to increase the security of the protocol and reduce vulnerabilities to attacks.
BTC Banking in July 2020
The Comptroller of the Currency (OCC), which supervises the national banks, allowed US banks to offer Bitcoin services. The first companies to jump on this news were Avanti, Kraken, BitPay, and Paxos. All of them applied for a license and bank charter.
MicroStrategy in August 2020
The most bullish news of 2020 came in August when the business intelligence company MicroStrategy purchased bitcoins worth about $250 million. The reason was the Inflation Ghost.
BitMEX and PayPal October 2020
The most shocking news of October came from the derivatives platform BitMEX. The exchange has been sued by the US Commodity Futures Trading Commission (CFTC). According to the CFTC, BitMEX was operating without proper licenses. It was also accused of manipulating the market, which doesn’t look good for the price of Bitcoin.
On the plus side, PayPal opened its doors to Bitcoin the same month. Anytime a billion-dollar company starts accepting cryptocurrency, it pushes the market forward and causes a price increase. It’s also important to note that PayPal bought up about 70% of the newly mined Bitcoins.
Institutional Money in December 2020
MicroStrategy made the first influx of institutional money at the end of 2020, which was followed by Square, Stone Ridge, MassMutual, Guggenheim Partners, Grayscale, and Ruffer Investment. In total, the investments were in the hundreds of millions USD. MicroStrategy raised $650 million in debt securities and, since then, successfully turned that cash into Bitcoin. This prompted a price increase, with BTC rallying above $24,000 during that period.
Bitcoin Price Development in 2021
Why is Bitcoin going up? Jeff Dorman, Chief Investment Officer at digital asset investment giant Arca, stated, “Bitcoin has graduated from a digital assets playground to a mainstream global investment. Investors now have the knowledge and means to buy Bitcoin themselves, and we are seeing it in real-time, which happened quicker than we anticipated.”
But if you want more insight into what pushed Bitcoin’s value in 2021, below is a further description of Bitcoin’s historical price charts.
Crash Prompted by the FCA in January 2021
The BTC/USD pair took a plunge at the beginning of 2021 due to regulation issues. The UK Financial Conduct Authority warned people investing in crypto assets “should be prepared to lose all their money.” As a result, around $175 billion in market value was wiped off the market.
FCA Chief Mr. Bailey was sure that “Bitcoin’s days [were] numbered.” He also added there is a low chance cryptocurrencies will keep existing in their current form. Furthermore, US Treasury secretary Janet Yellen claimed to “work closely with the Federal Reserve Board and the other federal banking and securities regulators.” Such comments signaled tougher conditions for cryptocurrencies in general.
Boost From Tesla in February 2021
The question of whether Bitcoin would go back up worried investors. Fortunately, Elon Musk mentioned Bitcoin on Twitter, and within a day, the price skyrocketed by 11%. Also, Tesla mentioned it purchased $1.5 billion worth of Bitcoin in an SEC filing, driving the price over $48,000.
Coinbase’s Listing in April 2021
Bitcoin hit a new record of over $63,000 in April, a day before Coinbase’s share listing in the United States. Coinbase is the cryptocurrency exchange in the US, and its listing on Nasdaq was a landmark victory for crypto advocates. This news had a positive impact on other cryptocurrencies as well, including Ethereum.
Mining Ban in China in May 2021
China’s cabinet vowed to crack down on Bitcoin mining, trying to mitigate financial risks and sending Bitcoin tumbling. Over the course of several weeks in May, BTC fell from over $58,000 to around $32,000. At this point, China’s share of global BTC mining has fallen to effectively zero.
New Narrative in July 2021
In July, the price of Bitcoin crashed below $30,000. This was the time when the ESG (environmental, social, and governance factors) narrative dragged the mood in the market down. Bitcoin also suffered from the Financial Action Task Force’s negative regulatory undertones. These stories began to affect the global economy – the sentiment fell to single-digit levels at the time.
Full Ban on Cryptocurrencies in China in September 2021
Cryptocurrency trading has been illegal in China since 2019, but it continued through foreign exchanges. This time, the official declared a full ban. The People’s Bank of China said: “Virtual currency-related business activities are illegal financial activities.” Within a few days, the price of Bitcoin fell by more than $4,000.
Regulatory Recognition in October 2021
U.S. Bank, the fifth-largest retail bank in the USA, launched its Bitcoin custody service for fund managers. On top of it, the Biden administration might release an executive order to direct federal agencies. If this goes into effect, they will be ready to study and offer recommendations on the crypto market, which is great news for traders.
“It’s a validating moment,” said Jesse Proudman, co-founder and CEO at Makara. “I think that’s a really meaningful mark in the history of the broader digital-asset class.”
Bitcoin price today is $47 078.90.
Bitcoin Technical Analysis
The first stage of our BTCUSD technical analysis deals with the one-month time frame.
The BTC/USD price history over a few past years is shown in the chart above. We see a gradual stable bullish trend that started in 2017.
Cryptocurrencies’ second life started in October 2020 when trading volumes grew and historical highs were retested against a backdrop of the previous years’ calm.
Bitcoin‘s price has been growing steeply since then. Thinking this situation will last forever would be naive. We have to figure out when the BTC coin will reverse again to buy some bitcoins.
BTC price prediction for the next three months
The weekly chart above indicates that the ultimate candle absorbs almost fully the penultimate candle’s ascending price movement. That’s a bearish signal.
The BTC/USD price location increases negative sentiment. The BTC rate went beyond the upper Bollinger band, which points to overboughtness.
The RSI is overheated too and indicates a bearish divergence.
The limits of a projected fall are marked in the BTC/USD price chart. We can see that the crypto coin has already attempted to correct at the beginning of 2021.
Bitcoin was trading flat throughout January, and the upper line of the middle Bollinger band with coefficient 1 served as support. I don’t have many reasons to say that fractal won’t repeat again. Strong support will then be located at around 42,000.
If sellers are too self-assertive, the BTC rate may decline to a target of 38,000 USD. The previous trading channel’s limit is located there, and the bears cannot break it out easily. Since the bullish trend isn’t broken, such a pullback may turn to the historical high’s retest.
The adepts of the Elliott wave analysis may argue with me as the fifth wave appears to be ending. However, the market is inert, especially after a rise that big. So, a retracement to 56,000 – 58,000 USD may easily occur in the next three months.
What will be the price of Bitcoin in 2021?
Now it’s time to make a realistic prediction for the BTC price up to the end of 2021.
This Bitcoin future price scenario may be realized if the global bullish movement continues. If the price drops below 38,000 USD, I will have to revise this outlook.
Thus, consolidation has seemed to be the likeliest scenario so far. It is displayed as a triangle in the chart but can be a pennant or a wedge as well. Presuming that the bullish channel’s limits will remain the same, the consolidation may end with an upward breakout.
The historical maximum of 58,200 dollars for 1 Bitcoin may then become a serious obstacle. If that level is broken out, we are very likely to see sharp ascending momentum, something similar to the historical peak’s breakout at 20,000 USD. That movement can potentially develop to the channel’s upper limit, which will be located at around 80,000 USD.
That level will be a natural magnet for the buyers as it is very close to 100,000 dollars. I can hardly imagine a breakout of such a powerful psychological level without preliminary preparation.
Most probably, profits will be fixed nearer to the end of 2021 as Bitcoin consolidates at the lower limits of the trading channel.
By projecting Bollinger Bands, I analyzed the projected areas of the BTC price’s movement based on the above outlook. Check the prediction chart of BTC/USD above. The limits of Bitcoin‘s projected value for each month are presented in the table below.
|December 2021||59 000||78 200|
We do not dare to make a realistic prediction of the price of Bitcoin in 2025. The Bitcoin price simply depends on too many factors. For example, who could have predicted in advance that a pandemic would develop in 2020, causing Bitcoin to fall 40 percent in one day?
The same reply is even more applicable here. We cannot make reliable projections of the price of Bitcoin for the year 2040. It’s possible to say the price tomorrow but not in 20 years. The price of any cryptocurrency depends on a lot of factors and can change in the blink of an eye.