Historical Volatility, Technical Patterns, On-chain Activity Indicate that Macro Bitcoin (BTC) Bull Run Isn’t Over: Report

The team at digital assets firm Kraken notes that if 2020 was the year of the bull, 2021 was the year that “crypto went mainstream.” During the past year, they claim to have “witnessed leaps in adoption, infrastructure, regulation, and policy — not to mention new all-time highs.”

As we enter 2022, the Kraken Intelligence team revisited what they consider to be “some of the past year’s most notable market events and provided an outlook of what may be expected in the year ahead.”

For the third straight year, the cryptocurrency markets “closed higher (+187%) in what remains a macro bull market trend,” the team at Kraken noted while adding that the gains were solid but not “as impressive as 2020’s return of +310%, it’s well ahead of 2019’s +58% return.”

As mentioned in the market report, BTC and most other crypto-assets “finished the year higher and outperformed traditional financial assets like the S&P 500, the NASDAQ, gold, government bonds and high-yield bonds.”

Despite the recent market correction to sub-$50k, “historical volatility, technical patterns, and on-chain activity collectively suggest that the macro BTC bull run isn’t over and could trend higher in 2022.”

The report further noted

“Developments in 2021 either accelerated the adoption and success of crypto-assets, or served as a headwind that gave market participants a reason for pause. In spite of the ups and downs and the retracement from all-time highs, crypto came out on top; the industry’s innovation and investment have never looked better.”

The report added that the most notable events of 2021 “include El Salvador’s adoption of BTC as legal tender, Elon Musk’s vocal opposition to the leading crypto-asset (after initially announcing Tesla’s support for BTC payments), China officially banning Bitcoin, and the approval of the first BTC ETF in the U.S (albeit an ETF tied to the futures market rather than the underlying spot market).”

The report also noted:

“Evidence of the surge in crypto adoption is evident in the balances held by BTC and ETH addresses, CBDC developments, trading volume, corporations adding crypto to their balance sheets, and open support and recognition by well-respected players in traditional finance.”

The report added that the “demand for DeFi and NFTs have fueled innovation in a range of Layer 1 and Layer 2 platforms, leading to spectacular growth in 2021.”

The report also mentioned that the demand saw these protocols “chart new territory on social media, drawing a new generation of users into the crypto space.”

Further, the underlying crypto-assets “powering these Layer 1 platforms (e.g., ETH, SOL, ADA, DOT) vastly outperformed the broader crypto market as participants found great value in their utility.”

You may access the full report via this link.

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