The year 2022 proved to be a challenging period for cryptocurrencies, with Bitcoin and Ethereum, as well as crypto enthusiasts, facing significant setbacks. Bitcoin, the world’s largest cryptocurrency, lost approximately 65% of its market value over the course of the year. This downward spiral was triggered by unexpected events, including the Terra Luna crash, a decline in FTX, and shifts in macroeconomic conditions.
However, the beginning of 2023 brought a glimmer of hope to the crypto world, with signs of recovery on the horizon. In July, Bitcoin exhibited an average increase of 0.39%, pushing its price to around $31,000. As of September 13, 2023, Bitcoin is trading at $25,956, with a market capitalization of $505.78 billion and a market volume of $16.06 billion. Despite these positive movements, the market has seen a downturn from its peak at $30,000.
Nevertheless, numerous questions continue to confound the minds of crypto traders, especially with regards to what lies ahead by year-end. Will Bitcoin experience a resurgence in the latter months of the year, or will it face another crash akin to the one experienced in 2022?
In this article, we will delve into various possibilities for Bitcoin’s price in 2023.
Will Bitcoin Recover Again?
Following a brief surge past the psychological threshold of $31,000, Bitcoin has once again taken on a bearish trend, trading below the $30,000 mark. The world’s largest cryptocurrency had been on a path to recovery, with a monthly gain of nearly 15%, according to data from CoinMarketCap. However, it is now trading at a weekly loss of over 2%, with a value of $29,230.
Bitcoin is currently facing pressure as inflation continues to be a critical concern in countries like the U.S. and the UK. In response to these inflation concerns, the U.S. Federal Reserve has raised interest rates by 25 basis points. Experts believe that the major resistance level is around $29,800, with the next significant resistance level standing at $30,400.
This is not the first time Bitcoin has come under pressure. In a previous instance, the cryptocurrency plummeted to a three-month low, dropping below the $26,000 level, when the U.S. Securities and Exchange Commission filed a lawsuit against Binance, one of the world’s leading cryptocurrency exchanges, and its founder and CEO, Changpeng Zhao (CZ).
The SEC accused Binance of creating separate entities, including Binance.com and Binance US, as part of an elaborate scheme to circumvent U.S. federal securities laws. It also alleged that a firm owned by CZ had artificially inflated the trading volume of crypto assets listed on the Binance U.S. platform.
Cryptocurrency experts believe that if Bitcoin maintains its position around $30,000, a rebound is possible. However, breaching this level could push Bitcoin down to the $28,000 range.
In April 2023, Bitcoin reached a critical resistance level of $30,000, for the first time since June 10, 2022, before experiencing a decline to the $26,000 mark. Crypto experts suggest that Bitcoin needs to maintain a level of $31,000 or higher to reach $60,000 by the end of 2023.
Despite signs of recovery, Bitcoin still remains down by nearly 50% from its all-time high. At the beginning of the year, Bitcoin dropped below $20,000. Various factors, such as the deepening banking crisis in the U.S., a weakening dollar index, and easing inflation, have contributed to the resurgence of Bitcoin and other digital currencies. It’s fair to say that the recent U.S. financial crisis has increased the appetite for cryptocurrencies.
The future of Bitcoin remains uncertain, and retail investors must exercise caution due to the extreme volatility the cryptocurrency has experienced in recent times. Bitcoin is currently trading at nearly 50% below its all-time high, and this instability is influenced by macroeconomic conditions, particularly in the U.S. and the UK.
Additionally, India has taken a firm stance on cryptocurrencies, encompassing all crypto-related transactions within the scope of the Money Laundering Act. This regulatory move has been viewed as a positive step within the industry, as it brings much-needed oversight to a space that has operated largely without regulation.
Another reason for optimism among crypto experts is the upcoming Bitcoin halving event expected in 2024. This event, which occurs every four years, will reduce BTC rewards to miners by 50%, reducing the miner’s payout to 3.125 BTC. Historically, the halving event has had a positive impact on Bitcoin’s price, as it restricts supply and generates momentum for the cryptocurrency’s value.