Bitcoin (BTC) is leaving behind one of the most turbulent years in its history in general. In this article, you will have a detailed overview of 2022, the effects of developments and the predictions for 2023 for Bitcoin price.
- 1 Bitcoin roadmap and nine predictions
- 2 Bitcoin price points to short-term bullish outlook
- 3 Status of Bitcoin miners
- 4 On-chain metrics signal relief for Bitcoin
- 5 Whales and stablecoins
- 6 Crypto mining offers an innovative way to hold BTC in 2023
- 7 Bitcoin price, logarithmic regression, market floors and 2023 aim levels
- 8 Nine Bitcoin predictions for 2023
Bitcoin roadmap and nine predictions
In 2022, there were many different developments in the cryptocurrency market. So let’s quickly recap the three main events that caused the Bitcoin price to plummet throughout the year. The three main events that caught investors off guard in 2022 are:
- Bitcoin price signals the end of the bull run. BTC reached its ATH level of $68,997.75 on November 8, 2021. However, it radically changed the market structure, dropping to $32,995 on the weekly timeframe on January 24. This move confirmed the start of a bear market.
- Terra-Luna-3AC crash. While the Bitcoin price fell, it was followed by the collapse of the algorithmic stablecoin Terra in May. This attack caused BTC to lose 30% of its market cap in less than two weeks. As a result of this sudden market crash, multi-leverage crypto hedge fund Three Arrows Capital (3AC) faced an untimely drop. That brought the market down from roughly $30,000 to $17,600.
- FTX debacle: The freshest wound in the crypto market is the FTX bankruptcy. The collapse of Sam Bankman-Fried’s empire occurred at the hands of his rival, CZ, the founder of Binance.
As a result of these three events, BTC price dropped 77.57% from the ATH level of $68,997.75. Despite these valuable results, it started to show an upward trend on November 9th. So, let’s take a quick look at what the leading crypto techniques look like.
Bitcoin price points to short-term bullish outlook
Bitcoin price showed a bullish divergence on the three-day chart on Nov. It has been on the rise since then. From this setup, its price has increased by 19%. It then made a local top of $18,400. Looking forward, there are three views of Bitcoin price:
- A local top at roughly $19,300. Then return to a lower level to establish a macrobase.
- Breaking the mid $19,000 – $20,000 barrier to reach the $25,000 and $28,000 resistances.
- The decline continues and we see a macro base mid-$11,898 and $9,453.
Status of Bitcoin miners
Before we get too deep into the techniques, let’s take a quick look at miners, who are essentially the backbone of the Bitcoin network. Due to the crypto winter, miners have already faced two major capitulations. The first was from June to August. The second started at the end of November and is still going on. Judging by historical miner capitulations and Bitcoin price floors, the bottom of the current cycle should be around the corner.
The latest drop in difficulty coincides with the crash of Argo Blockchain, one of the big names in the Bitcoin mining industry. As a result, ARBK processes were suspended on the UK and AND exchanges on December 9, which coincided with a major drop in mining difficulty.
This decrease in mining difficulty has slightly relieved the pressure on the miners. But at the same time, it also pointed to the continuation of the waves of surrender. As such, a rapid downtrend is not outside the realm of possibility for Bitcoin price.
The miner reserve indicator provides a claim on the number of BTC held by these contributors. It is currently hovering around 1.84 million BTC worth about $30 billion. Therefore, the continuation of thinking faced by miners could create further selling pressure, causing the Bitcoin price to drop further.
On-chain metrics signal relief for Bitcoin
The first, and perhaps the most valuable, on-chain metric that determines capitulation possibility is the 365-day Market-To-Realized Value (MVRV) indicator. This metric is used to determine the average profit/loss of investors who bought BTC in the past year. According to historical data, the bottom for BTC occurred when the MVRV value fell below -40%.
The free fall in June and the sudden crash in November caused the 365-day MVRV to reach -45%, corresponding to the -2020 level. However, the on-chain metric is still a long way off from 2018 and 2014 levels. These data suggest that a minor downtrend for Bitcoin price is likely in the future.
Whales and accumulation patterns are valuable for determining whether the Bitcoin price has seen the bottom. Historical data shows that addresses holding 100 to 10,000 BTC have an impact on the price of Bitcoin. The number of these addresses increased from 15,662 to 15,989 last month. Thus, 327 new addresses joined the network. In February, when these investors were most active, the number of addresses increased by 274 from 15,870 to 15,596. This move was followed by a $10,000 increase in Bitcoin price from roughly $37,400 to $47,050.
Another different information point was in mid-September and November 2021, when these addresses increased from 15,777 to 16,150 and 373 new addresses were added. Following this rise, Bitcoin price rose from $40,700 to 66,971. It then reached the ATH level. If history repeats itself, this latest accumulation of whales will trigger a rapid bear market rally in Bitcoin price. This move means that $28,000 will be tested again, assuming BTC inflation is $10,000 as it was in February.
Whales and stablecoins
While the accumulation of BTC is valuable, the presence of whales holding stablecoins to determine the possibility of a rally in Bitcoin price and add load is more valuable. To that end, let’s take a look at the number of addresses holding stablecoins between $100,000 and $10,000,000. The tokens in question include Tether US (USDT), DAI, USD Coin (USDC), and Binance USD (BUSD).
As the chart below shows, USDC and BUSD whale addresses holding $100,000-10,000,000 started increasing their holdings after FTX’s first crash in the first week of November. These addresses for USDT and DAI started piling up in the first week of December. Obviously, these whales pile up for a rainy day. All in all, a possible drop of Bitcoin to $9,500 would be a perfect start for the new cycle.
Crypto mining offers an innovative way to hold BTC in 2023
Cryptocurrency mining has skyrocketed in explosive form since mid-2016 with the S9 ASIC miner. The proof is Joule per Tera Hash beautification of mining rigs since 2009. Crypto mining equipment has become 4,237% more efficient over the past eight years.
The Bitcoin hash rate reached the ATH level of 272 million TH/s in November 2022. This is a 400% increase compared to the hash rate in October 2018.
Ethan Vera of Luxor pool stated that if there is another wave of miner capitulation, the price of Antminer S19XP will rise unreasonably. As more miners with older rigs become unprofitable, they will want to upgrade. This in turn will result in an influx of capital to purchase the latest S19XP. This will cause the price to increase.
Vera explains in detail that if the hash price, a metric used to determine the dollar revenue a miner earns per hash rate unit, drops by 20%, this will create a demand. According to Blockware Intelligence, the hash price for S19XP calculated as $20,000 per BTC is $0.09. In addition to providing positive cash flow to the owner, the miner’s market value will increase. It will make it an innovative enclosure should the Bitcoin price fall further from its current position.
With all these aspects in mind, let’s take another look at the Bitcoin price and its 11-year history.
Bitcoin price, logarithmic regression, market floors and 2023 aim levels
If logarithmic regression is applied to the last 11 years of Bitcoin price history, an interesting pattern emerges. As seen in the chart, BTC is bottoming out as it enters the green bands, which starts with an accumulation and then the trend reverses.
So far, all cycles for BTC have bottomed out above or around the green bands, except for the 3rd cycle. Currently, Bitcoin price is in the middle band of the regression line. This indicates that it may be close to the bottom. However, there is also the possibility that the major crypto will slide further down and label the third band of the regression.
A closer look at the regression lines shows that the lower band is present at roughly $11,898, which is in line with the assumption seen from a technical standpoint. To assume goals for the next run in 2023, let’s assume that this cycle turns on the contrary after establishing a local bottom at $11,898. Using the Fibonacci Retracement tool from the all-time high to the top indicated bottom reveals several valuable goals:
The midpoint of the Bitcoin bear market correction, $28,092, also coincides with the technically predicted levels at the beginning of the article. The $28,000 to $30,000 range is expected to form in mid-2023 for bitcoin price. The potential all-time highs of $112,090.32 and $210,252.31 are the result of negative 27% and 62% retracements. The time frame for these goals is late 2023 and 2024.
So, the 5th cycle Bitcoin price has already started to show an impressive upward trend. Goldman Sachs giants, which we quoted as, keep their $100,000 price cuts current, although they are outliers.
Nine Bitcoin predictions for 2023
Akash Girimath, one of the FXStreet analysts, compiles his claims for the new year with 9 titles after the 2022 outlook he provided above:
- Expect a final wave of capitulations caused by miners or the fallout of classical finance.
- This downward move will push Bitcoin price below $9,500. But as the techniques and on-chain metrics are starting to look very positive, the small deviation will not be worthwhile in the long run.
- The average dollar cost of $9,500 from the current level (if BTC drops further) is the best way to go to the bottom rather than try to catch it.
- We expect a further slowdown in interest rate hikes as inflation declines.
- The US Federal Reserve can stimulate the economy by printing money. This development could trigger another rally in equities and crypto markets by attracting more investors to borrow money.
- Russia-Ukraine will reach a conclusion or a ceasefire. The next step may involve making mining more politically acceptable by reversing the policies regarding Bitcoin mining.
- Brazil and other South American countries will implement crypto-friendly regulations and become a safe haven for the growth of the crypto market.
- As the market gains momentum, it will attract more investors and more capital, bringing the total crypto market capitalization to $6 trillion and higher.
- There will be great developments with Ethereum, ZK-snark technology and Web3 part of the crypto space.