Bitcoin (BTC) has had a tumultuous year of losses in 2022, culminating in a 65% decline in value. Still, as we move closer to the next scheduled halving event in May 2024, investors are beginning to look ahead to potential for a significant recovery in Bitcoin in 2023. Signs of institutional investment and longer-term holders suggest that bulls could be ready to start accumulating and push prices upward as other factors such as economic news, Federal Reserve interest rate policy, and demand for BTC to replace gold as a store of value could all come into play and influence prices. We look at the current Bitcoin trading situation, technical indicators, what top-tier Bitcoin whales are doing, and predictions of prominent analysts and Bitcoin enthusiasts to provide an overview of what to expect in terms of price predictions for the coming year into the future.
Bitcoin has been the talk of town for the past few months. After reaching an all-time high of nearly $70,000 in April 2021, the world’s most valuable cryptocurrency has dropped about 75%, finishing 2022 in the red with a 65% loss. This decline was exacerbated by bankruptcy and scandal announcements that rattled investor confidence. Nevertheless, Bitcoin is viewed as a crypto bell cow, and as it goes down, so goes most other cryptocurrencies in the market. Many analysts believe 2023 will be a much better year for Bitcoin than 2022, with the next halving slated to take place in May 2024. This article will look at various projections and indicators that suggest 2023 could be Bitcoin’s year and what investors and traders should watch out for.
Bitcoin’s Halvings Effect in the Past
To understand Bitcoin’s performance in the past, it is important to look at two important metrics – halvings and all-time highs. Halvings are a mechanism in cryptocurrency’s code that reduces the rate at which new bitcoins enter circulation and occur roughly every four years. Historically, Bitcoin has typically hit a bottom when the next halving is a year and a half away. So as the next halving is set to be in May 2024 – less than 18 months away – it suggests that lower risk can be expected in short-term, and price should approach $40,000 by May 2024.
According to its historical trend, Bitcoin’s price should be 60% of its previous all-time high when the next halving arrives – which would mean a price point of $40,000 in May 2024. As a result, many analysts suggest that this could be the price point of Bitcoin over the next two years, although there is still a great deal of political and economic uncertainty that could still affect the price. Michael Saylor, a co-founder of MicroStrategy, has a solid bullish outlook for Bitcoin, even going so far as to purchase approximately 130,000 BTC, which is 0.62% of the 19 million Bitcoin currently in circulation.
Bitcoin’s Current Price and Volume
At the time of writing, Bitcoin was trading at $17,251, with a $14 billion trading volume in the last 24 hours. Bitcoin broke through the psychological resistance level of $17,000, suggesting a possible increase to the $17,800 support zone in future. In the 4-hour time frame, BTC is positive due to an upward channel. However, if BTC falls below the $16,775 level, it could fall as low as $16,450.
The number of Bitcoin addresses holding 0.1+ coins hit an all-time high, and the BTC Percent Supply in Profit (7-day Moving Average) met a one-month high of 60.513% at press time, with Bitcoin whales continuing to sell. Holder composition by time projected something positive, with 62% of investors holding their coins for more than one year and 32% for 1 to 12 months.
Bitcoin Price Prediction for 2023
Despite the recent downward trend, Bitcoin could potentially go further up. Legendary investor Bill Miller believes that Bitcoin’s supply is growing around 2.5 percent per year, and Bloomberg Intelligence’s demand and adoption curves point to a projection of $100,000 by 2025. McGlone of Bloomberg Intelligence believes that the Fed’s interest rate negotiations will lay the framework for BTC to maintain its upward trajectory and outperform most asset classes.
Bitcoin can reach as high as $124,508 in 2025, and a high of $137k is also possible. However, as the global regulatory and legislative regimes still have not uniformly supported Bitcoin and uncertainty around the introduction of CBDCs continues, price predictions can only be extrapolated from technical and investor behavior. Looking at technical indicators, Bitcoin is currently positive on a 4-hour time frame but could see a negative drop if it closes today below $\16,775 psychological resistance level. Moving averages, oscillators and momentum indicators also currently suggest a buy for Bitcoin. Furthermore, Bitcoin is increasingly being seen as a safe haven asset, store of value, and inflation hedge, with more Bitcoin whales and holders accumulating cryptocurrency. Thus, whatever happens to Bitcoin is bound to have a ripple effect on the entire altcoin market.
The outlook for Bitcoin in 2023 is mainly positive, but it is vital not to ignore the volatility of the crypto market. At press time, Bitcoin is recording negative ROIs of -27% and -41% over a 3-month and a 1-year window, respectively. The number of Bitcoin addresses holding 0.1+ coins is at an all-time high, and $BTC Percent Supply in Profit (7d MA) and aSOPR (7d MA) are at 1-month and 3-month highs, respectively. Investors and traders should keep an eye on the $16,775 level and monitor BTC’s holder composition, stats, and price movements.