Bitcoin price stumbles again, but technicals suggest upward movement soon

Historical data suggests Bitcoin could experience a massive pump during the first week of January.
- MicroStrategy has added another 1,914 BTC to its crypto reserves.
- Many industry experts, including Raoul Pal, Alex Krüger and David Lichfitz, believe that the new year will help spur a major price rally for Bitcoin.
- Bitcoin’s total market capitalization currently stands at around $900 billion.
Even with the new year just around the corner, Bitcoin (BTC) failed to muster the financial momentum that many experts had predicted for the asset. After seemingly having found support around the $49K region, the flagship crypto has continued to dip, currently showcasing weekly losses in excess of 7%. At press time, BTC is trading at $47,623.
Amid the ongoing volatility, business intelligence firm MicroStrategy — led by Bitcoin maximalist Michael Saylor — revealed that it had added another $94 million worth of BTC to its coffers, acquiring the token at an average price of $49,229. In a filing with the US Securities and Exchange Commission (SEC), the firm noted it had purchased another 1,914 BTC, bringing the company’s total crypto haul to a whopping 124,391 BTC.
MicroStrategy now owns approximately $6 billion worth of Bitcoin, with the investment already having yielded the firm gains in excess of $2.1 billion. Most of the company’s purchases have been facilitated via the cash-on-hand route as well as through the sales of convertible senior notes, which were made primarily via private offerings aimed at institutional buyers.
Historical data suggests a near-term pump on the horizon for Bitcoin
A number of prominent market analysts believe that a solid week of gains may be on the cards for Bitcoin. The digital currency has traditionally registered hefty profits — ranging from 7% to 30% — during the first week of every year since 2018.
In a recent tweet, economist Alex Krüger pointed out that for nearly four years running, BTC has delivered positive returns come January each year, referring to the phenomenon as the “first week of the year effect.” However, he also conceded, “To be fair, only 2020 and 2021 matter, different markets, so do with those two data points as you will.”
This optimistic outlook is also shared by Real Vision CEO Raoul Pal, who, in a recent interview, noted that Bitcoin was reaching its local bottom after having undergone massive sell-offs over the past month. In his view, the turn of the new year will most likely see institutional money make its way into this burgeoning market.
Similarly, ExoAlpha CEO David Lifchitz also believes that many traders may currently be offloading their BTC to minimize their tax liabilities and that once the new calendar year starts, the currency could make a strong comeback.
Not everyone is convinced of BTC making a strong comeback
During a recent sitdown with CNBC, Carol Alexander, economist and professor of finance at Sussex University, revealed that the future may hold a lot of uncertainty for BTC. Alexander claimed that the asset may dip as low as $10K over the coming months. Being a longtime crypto skeptic, Alexander believes Bitcoin has no intrinsic value and that the currency may have already achieved all that it could monetarily this past fiscal year.
Similarly, Union Bank’s chief equity strategist Todd Lowenstein believes that as and when the Fed starts off with its tapering plans — by hiking interest rates — Bitcoin’s price could take an even bigger hit. In his view, 2022 could have an adverse impact not only on the crypto sector but on a whole host of traditional markets as well.
Interested in cryptocurrency? Learn more about the basics with our beginner’s guide to Bitcoin, dive deeper by learning about Ethereum and see what blockchain can do with our simple guide to DeFi.
Disclosure: The author owns a range of cryptocurrencies at the time of writing.