December 31, 2021

Ending the Year with a (Small) Bounce

Dec 31, 2021

Introduction

It seems like the crypto community has already checked out for the year because there is absolutely nothing going on – no hot news, no debates, no controversy…

Before we jump into today’s content, I wanted to wish everyone a very happy new year – may it be as exciting and profitable as 2021!

Market Watch

At least price-wise, it seems like the bears are showing some mercy on the last day of the year, with the crypto market bouncing moderately from yesterday’s lows. Especially DeFi is finally getting some love after being beaten down for months and almost entirely skipping the altcoin bull market in the second half of 2021.

It seems like options expiring today was the primary catalyst for this week’s price action. Only up from here?

Byzantine General @ByzGeneral

Expiration at pretty much exactly max pain price of Deribit options. I think the bull case just got a little stronger.

Byzantine General @ByzGeneral

MAX PAIN IS... Oh it's... It's exactly where we are right now. $BTC https://t.co/x7kwGG5md9

light @lightcrypto

expiry and then up

TheSkyhopper @TheSkyhopper

In @DeribitExchange Option-Land, 2021 is gone and 2022 is in. Pre-and post Max Pain on #bitcoin pricing. Potential energy (capped by expiries, gamma) turning into kinetic energy. Gotta think we do see 50,000+ first week of 2022.

The last weeks’ sentiment on Crypto Twitter could make one believe that we have entered a brutal bear market with prices crashing to new lows on a daily basis. If you zoom out and look at the charts, however, you can see that after the initial liquidation dump, prices have just consolidated in a large sideways channel…

StarkNet Maestro @CryptoMaestro

So much emotion, ego trip and bull/bear argument What market actually did:

We have outlined several times recently that the crypto market will likely look quite different in 2022, with less overall money printing by central banks driving up asset prices, a new crypto cycle framework (lengthening cycles?), many projects and important updates finally shipping (think the Merge, innovations in the NFT space or hotly anticipated crypto games) and an overall structural shift of the crypto market. To end the last post of the year, let’s conclude with some more fresh outlooks for 2022: