Economy

What will happen to the value of Bitcoin in 2023? — experts

The beginning of 2023 pleases with the confident growth of Bitcoin. Users who are tired of the grueling bear market are probably wondering if this means that a fundamental trend reversal is taking place.  

Armed with technical analysis tools, indicators and expert opinions, ForkLog understood the current situation.

What do the indicators say?

Technical analysis tools

Since the beginning of the year, the price of the first cryptocurrency has increased by ~40% — from marks around $16 to ~$500 (as of January 23, 100). However, digital gold is still a long way from the all-time high (ATH) reached on 24.01.2023/10.11.2021/69 of around $000.

1-price
Bitcoin price is trading ~66% below ATH. Data Messaria as of 24.01.2023/XNUMX/XNUMX.

However, positive changes in the market situation and indicators of many indicators are encouraging.

"While the risk of a pullback and retest [of the lows] remains, it is likely that we are entering the early stages of a new bull market," — shared an opinion Philip Swift, founder of Look Into Bitcoin.

The weekly chart below shows that at the beginning of the year, Bitcoin held the key support level B. Pushing away from it, the price went through zone A like a knife through butter. The latter served as a support for a volatile market for quite some time until collapse of FTX .

2-TA-chart
Key levels on the BTC/USD weekly chart. Data: TradingView, Look Into Bitcoin .

Swift does not rule out the possibility of resuming the downward trend. However, according to him, the path of least resistance is up. The next important goal is around the $25 mark. 

For the first time since the end of December 2021, the price of Bitcoin was above the 200-day moving average, a kind of boundary between bear and bull markets.

2_1-200-DMA
Data: in Glassno .

It is important that the January price recovery was supported by a significant increase in trading volumes.

2_2-TradingVolume
Data: Arcane Research .

Indicators

At the beginning of November 2022, the quotation of the first cryptocurrency broke through the bottom of the previous market cycle . It seemed to many that after overcoming the lower extreme, consolidation with recovery and a new bullish trend was not far off. However, another one soon appeared "black swan" Sam Bankman-Fried's huge business empire collapsed. Against the background of the FTX collapse, digital gold reached $15 (in the BTC/USDT pair on the Binance exchange). 

Indicators Cumulative Value Days Destroyed (CVDD) and balanced price in the second half of the year, they indicated a high probability of quotations reaching a cyclical bottom. After some time, the consolidation really began with the subsequent recovery of the market.

3-Price-Forecast-Tools
Data: Look Into Bitcoin .

Every day after the rebound of the price from the key values ​​of the metrics, the chances of the continuation of the rally increase, emphasized Philip Swift.

2022 was a really tough year for miners — increasing hashrate and complexity at falling prices has forced many players to sell digital stocks and/or exit the market. 

Against the background of what is happening, the Puell multiplier fell into the accumulation lane. Currently, there is an exit of the indicator from the "green zone", which historically meant a change from a bearish phase to a bullish one.

4-The-Puell-Multiple
Data: Look Into Bitcoin .

Crossing "hash tapes" and exiting the "red zone" of the metric Hash Ribbons indicates that the worst times for miners are behind us, as well as the potential for the digital gold rally to continue.

5-Hash-Ribbons
Data: Look Into Bitcoin .

The above indicators, according to Swift, signal the return of investor confidence. Improving market sentiment can reduce potential selling pressure, which is also a favorable price factor. 

Bitcoin quotes rose above for the first time in a long period realized value. This is also a positive signal for market participants, indicating the possible end of the bearish phase.

6-Realized-Price
Data: Look Into Bitcoin .

Amid market panic over the FTX collapse and its aftermath, Bitcoin's realized capitalization was down 18,8% against ATH at the end of December. This is the second largest indicator in history.

14-BTC-Realized-Cap-Drawdown
Data: Glassnode, Bitcoin Magazine .

Such slumps are a rare opportunity for buyers, analysts at Bitcoin Magazine are confident. They are convinced that the purchase of the first cryptocurrency in such periods promises a significant profit in the long term. 

Orange indicator line MVRV Z-Score leaves the "green zone" - this is another signal about the passage of the bottom.

7-MVRV-1
Data: Look Into Bitcoin .

The thesis about the change in market phases is also confirmed by the long-term indicator — RHODL Ratio. His orange line is preparing to leave the oversold zone. The latter means the most favorable period for implementation Buy&Hold strategies and/or DCA .

8-RHODL
Data: Look Into Bitcoin .

The prolonged drop in price did not affect the on-chain activity too much. For example, in 2022, more than 556 million BTC worth almost $15 trillion passed through the network of the first cryptocurrency. Compared to the previous year, the indicator increased by 102%.

8_1-BTC-Total-Transfer-Volume
Data: Bitcoin Magazine .

Market sentiments

Indicator aSOPR finally overcame the 1.0 mark, from which it has not come out since the end of April last year. This is a sign of improving market sentiment, indicating that there is sufficient demand to absorb the selling caused by profit locking.

9-aSOPR-1
Data: in Glassno .

The emergence of confidence among investors is also evidenced by the cryptocurrency "index of fear and greed". It has finally moved to neutral values, albeit from April 2022 practically did not leave the "fear" zone.

Hodlers' addresses and holdings

An important fundamental factor is the increase in the number of Bitcoin addresses with non-zero balances. He points to the growing number of market participants and the accumulation of coins in the wallets of those who believe in the long-term potential of Bitcoin.  

For example, in 2022, the number of addresses with a balance ≥ 1 BTC increased by 20%. The indicator increases exponentially, approaching the mark of 1 million.

11-BTC-and-more
Data: Glassnode, ForkLog analysis report for 2022 .

Positive dynamics from year to year are also observed at smaller addresses with at least 0,01 BTC and 0,1 BTC.

12-001-BTC-i-01-BTC
Data: Glassnode, Bitcoin Magazine .

The number of bitcoins in the wallets of hodlers (coins "aged" over 155 days are taken into account) closely matched the mark of 14 million BTC. This is ~72,5% of the total market supply of the first cryptocurrency.

12_1-BTC-Annual-Long-Term-Supply
Data: Glassnode, Bitcoin Magazine .

"There are people all over the world who are buying this asset. There is a huge and growing category of people who are hoarding [bitcoin] regardless of the price,” noted Dylan Leclerc of Bitcoin Magazine.

Weighted at the realized price HODL waves Bitcoin indicates a complete "reset" of the market after the peak reached in late 2021 (red and yellow bars). Similar "cooling" occurred at the bottom of past bearish phases.

12_2-HODL-Waves
Data: Look Into Bitcoin .

Macro factors

Limited supply and a host of other factors suggest that mass adoption on a global level could push the price of Bitcoin to skyrocketing heights. 

Capitalization of the first cryptocurrency is less than $500 billion . The corresponding figure for gold is almost $12 trillion, fixed income instruments are $127 trillion, and the residential real estate market is over $250 trillion.

13-Total-Global-Store-of-Wealth-Estimates
Data: Bitcoin Magazine .

If the share of global wealth concentrated in bitcoin reaches at least 1%, the price of the cryptocurrency will exceed $300, and the capitalization will be $000 trillion. 

It is well known that the geopolitical situation and macro factors significantly affect capital markets and economic growth. Bitcoin price movement does not happen in a vacuum either. The first cryptocurrency rose in price against the background of the widespread liquidity injection caused by the corona crisis. But as soon as the US government tightened monetary policy, growth quickly turned into a fall. 

According to forecasts, 61 out of 90 respondents Reuters economists believe that the Fed rate will reach its peak at the level of 4,75%-5% in March. Then, the regulator is likely to keep the rate unchanged at least until the end of the year.

For a long time, the price of the first cryptocurrency moved almost in sync with the American stock market. The latter, in turn, reacted sensitively to the change in the Fed rate.

However, at the beginning of 2023, the correlation of Bitcoin with the NASDAQ index fell to 0,29. This is the lowest value since December 2021.

15-BTC-and-Nasdaq-correlation
The dynamics of the correlation of Bitcoin with the Nasdaq index. Data: Arcane Research .

It is possible that due to the "disconnection" from the stock market in the crypto community, the already forgotten narrative about bitcoin as a protective asset will soon emerge.

What do the experts say?

Bloomberg strategist Mike McGlone convinced , that the first cryptocurrency is forming a bottom in the same vein as it was before the start of the bull phase in 2019. The essential difference lies in the strengthening of monetary policy in the world.

Four years ago, there was a widespread lowering of interest rates by monetary regulators. Currently, they are still raising them, the specialist said.

"Then the Fed already started easing, and we held the bottom and broke out higher. […] Now they are aggressively tightening [the policy]. Give him some time. Overall, yes, a bullish picture,” McGlone explained.

Arcane Research senior analyst Vetle Lunde is also bullish on digital gold's future prospects.

"Decreasing correlation is a positive factor for the market," he emphasized.

Taking into account the value of on-chain indicators, Swift predicts the development of an upward trend.

"It is quite possible that now is the best time to accumulate Bitcoin before the start of a new bull rally," the expert shared his thoughts.

Visnovki

This review looks at the digital gold situation exclusively. However, it is clear to many that the rise of Bitcoin will be a powerful driver of the recovery of the rest of the market, as most coins are closely correlated with the first cryptocurrency. 

The unstoppable growth of the hash rate, despite the falling price, once again indicates the continuous investment of miners in equipment and their confidence in the future prospects of the market. 

The steadfastness of hodlers who accumulate assets despite the price dynamics is impressive. The growth in the number of coins in various categories in relation to "small" addresses is also encouraging. 

Many on-chain indicators are already signaling the end of the bear phase of the market. This means that with consolidation and a bullish rally just around the corner, it's time to buckle up

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