Now that we are about to close this 2021, in this space of market analysis, I would like to give a different vision than usual. We will try to answer the question of what has happened in 2021 in the cryptoasset market, and by extension, what can happen at the beginning of this 2022.
To do this, we need to get away from the noise of the short-term market. Perspective is essential when analyzing assets. The analysis is carried out on a chart of bitcoin vs USD in a daily timeframe.
Visually, the price already offers us a lot of information:
- We have experienced a clearly bullish first quarter of the year that took bitcoin quickly from USD 10,000 to touch USD 63,000
- From this moment on, in April we began to see exhaustion in the market, something natural after such a significant rise
- The second quarter is marked by a fall to important levels of ground, 30,000 USD
- From that area we enter the third quarter with a marked rate of recovery, but in two different stages
– We recover the 50,000 USD
– Pullback to $ 40,000 and new bullish momentum
- The new upward momentum culminates in the third quarter with a new ATH already touching USD 70,000.
- Then we again see a strong setback that leads the para to test the 45,000 USD approx.
Attention to bitcoin
I guess by now, the reader will be clear about why we are focusing on bitcoin to do this market analysis, and that is dominance. The relative weight that this asset has in the market with respect to the rest.
Although it is still clearly the main actor, it must be said that this 2021 leaves us a clear change of scenery with a clearly downward dominance of bitcoin in favor of Ethereum
Despite the fact that flippening (a term that refers to the fact that Ethereum can surpass bitcoin) is a long way off, no one can deny that in this sense of weight in the market, this year has been the year of Ethereum, surely boosted by the structural improvements (EIP 1559) that it has undergone and that are aimed at combating its main current problem, which is the price of fees.
The importance of perspective
This is a concept that we work on a lot, both individually and with our DeFi PRO graduate students. In our trading training block we strongly insist on developing criteria to evaluate the market and that they adjust to reality through this work and analysis with a global perspective. Without a doubt, one of the keys and qualities that any good market operator has.
With that perspective, we can approach the current charts with more information, and assess the price movements that we can see in them with more information than the charts themselves provide.
Bitcoin in support zone
With these data and a little reflection, we can understand the importance of this current support zone, and at the same time how it is providing robustness and resilience to the price. Also looking at the previous market situations, we are surely facing a very good buying opportunity, which well managed and with a good assessment of our risk tolerance could be interesting.
Ethereum shows signs of capital inflow
An interesting aspect of the Ethereum chart is looking at the volume data. Unlike bitcoin, we see that we have volume increases in the ascents within the downtrend, which could indicate a clear accumulation. Without a doubt, recovering the area of 4,000 USD is vital for Ethereum that seems destined to be one of the preferred assets of this 2022
USDT on exchanges
One piece of information that also catches our attention is the USDT balance in Exchanges accounts. Let’s not forget that being positioned in USDT would be the equivalent of what we understand in the FIAT market as being in liquidity, therefore, one more sign that the market remains prudently waiting.
And … what do whales do?
To close this analysis, we are going to examine in detail what the whales have done during these last 90 days in which we have seen how the market towards a round-trip figure, where investors have returned to the market in full. gains from the latter ATH
We can appreciate two significant facts:
- In these types of operators, the volume of exit from their exchange accounts continues to be much higher than the volume of entry.
- As a percentage, the most traded asset at the exit of exchanges is a stablecoin, a clear indication that we are in a bearish phase of the market in these 90 days
- Despite the previous point, the exit balances of both bitcoin and Ethereum exchanges show a clear accumulation of these assetsthe exit balances of both bitcoin and Ethereum exchanges show a clear accumulation of these assets
Good Bye 2021
The conclusions that we can therefore draw are that we have lived through a bullish year despite its end, and that as in 2020, the market and its structure have changed significantly, which means a new step forward in maturation. of crypto assets.
We have continued to see the inflow of institutional capital to a greater or lesser extent, and there have been many news regarding investments or interest on the part of important players in the financial sector, a sample of them has been the issue of crypto ETFs in the USA, which still it’s not closed at all
Therefore, we closed a transition year with significant expectations of market consolidation, which does not mean that we do not see declines. The technical situation is complex right now due to the lack of volume that adds a significant uncertainty factor. To overcome the current market price zone, we must see a significant entry of that volume into the market, which will surely be abrupt, something that could cause an accelerated price movement