Crypto

Bitcoin Weekly Forecast: Estimating the Probability of an 80% BTC Rally Through 2023 | Cryptocurrency

  • Bitcoin price hit a higher high after 18 days of consolidation and could signal the start of a bearish rally.
  • Historical seasonal patterns suggest a high probability that BTC will rise in December, bringing the average return in 2022 closer to the return in 2021.
  • A break of the $16,700 support level will be the first sign of trouble, but the loss of the $15,550 support level will negate the bullish outlook.

Bitcoin price action over the past 72 hours indicates that a massive bull move is ahead. In the last two articles, we looked at why this is possible from a technical and networking perspective.

However, in this weekly forecast, we will look at Bitcoin’s monthly performance over the last decade and determine if such a bullish forecast is possible.

Bitcoin price and performance over the years

The price dynamics of a bitcoin depends on the phase of the cycle in which it is located. If it is a bullish trend, the monthly return is generally positive, but in a bear market, the average return tends to fall. At present, BTC has not yet formed a bottom.

As discussed in previous articles, the $15,550 low could be a bottom for the market, but it’s impossible to know for sure. Judging by past cycles and Bitcoin price dynamics, further declines indeed seem likely. An excellent place for a macro bottom would be the $31,575 to $11,898 range. Due to volatility, a retest at $10,000 is also possible.

What information can the monthly and yearly indicators of Bitcoin provide? Over the past 13 years, the price of bitcoin has mostly risen, with an average monthly return of 14.32% over that period.

In 2022 alone, the average monthly return was -7.39%, well below the 13-year average of 14.32% for BTC price. Based purely on speculation, the price of Bitcoin would need to recover about 81% from its current position of $17,000 for the average return in 2022 to just hit 0%.

BTC monthly income

Is an 81% recovery likely in December 2022?

The price of bitcoin is unlikely to rise by 81% in less than 30 days. Judging by the 13-year history, the average monthly return of BTC in December is only 12.34%. From a conservative point of view, only a 10-15% recovery is likely.

If such a prospect materializes, the price of bitcoin should be $19,500. Interestingly, this level coincides with the target value predicted in the previous weekly forecast.

Emissions over the ten-year lifetime of a big cryptocurrency show that the highest return in December was 470%, which happened in 2013 when BTC was extremely volatile. However, there was a 54% increase in 2017, so it is possible that the price of bitcoin will rise again to $30,000.

In fact, the technical data is a falling bull wedge, a breakout of which could send Bitcoin’s price up 54% to $32,191. Individually, the three critical network metrics that focus on investor health, selling pressure, and smart money stocks point to all the conditions needed for BTC’s price to trigger a bear market rally at the end of the month or year.

BTC/USDT 1-day chart

BTC/USDT 1-day chart

While a bullish price prediction for bitcoin makes sense, investors should consider the other side of the argument – ​​uncertainty. As the US Federal Reserve looks to cut interest rate hikes from 75 basis points (bp) to 50 bp, things could get worse.

Every time the Fed has gone hawkish to dovish, the markets have experienced a bearish fate. The last time this happened was after the Great Recession of 2008, which sent the S&P 500 down 35%.

The Fed will turn against the S&P 500

The Fed will turn against the S&P 500

Since the price of bitcoin and the stock market are highly correlated, a major cryptocurrency could follow suit and trigger a massive crash. Investors should be aware that a break of the $16,700 support level would be the first sign of difficulty or weakening buying interest.

However, the loss of the $15,550 support level would create a lower low and skew the odds in favor of the bears. This reversal of the bullish outlook could trigger another sell-off in the price of bitcoin in a potentially lower macroeconomic area ranging from $13,575 to $11,898.

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