Over the past two months, Bitcoin’s volatility and volume have diminished significantly, which hardly supports the bullish narrative about the growing interest in Bitcoin. At the same time, active addresses holding Bitcoin dropped from 5 165 158 on 7th November 2022 to only 4 585 372 on 26th December 2022 (based on the information obtained from Glassnode), suggesting that people are holding their coins rather than buying more of them. In addition to that, attempts by several countries like Brazil and Nigeria to move closer toward designating cryptocurrencies as legal tender had no impact on the market whatsoever.
That brings us to one rudimentary question in the highly speculative market (the one we already asked before) “If everyone is holding their Bitcoin and waiting for the price to go up so they can sell, who will push the market higher?”. This question is very troubling, considering that the global economy is poised to dive deeper into recession in 2023, and average investors are set to run out of savings due to growing prices of consumer goods and services (due to high inflation, which is here to stay). In fact, we expect many of these people to be forced to sell their holdings later. Furthermore, with no stimulus check handed to people from the U.S. government, we do not expect Bitcoin to repeat its success between 2020 and 2021 (at least not so soon, if ever).
Contrarily, we expect much more pain for the overall cryptocurrency market and new lows to be formed in Bitcoin within the next month or two. With that said, we will pay close attention to the FED’s narrative and efforts of central banks (globally) to take on their own CBDC (Central bank digital currencies), which may threaten Bitcoin down the road. Accordingly, we stay bearish on the cryptocurrency market and maintain our price targets of 15 000$ and 13 000$.
*See attached articles to view our calls since proposing the idea of a double top in November 2021.*
Illustration 1.01 Illustration 1.01 shows the daily chart of BTCUSD and the active setup. Yellow arrows indicate breakouts above and below the narrow range.
Technical analysis Daily time frame = Slightly bearish Weekly time frame = Neutral
Illustration 1.02 The picture above illustrates the weekly chart of BTCUSD. The red arrow shows declining volume since early November 2022, which hardly supports the bullish narrative and growing interest in Bitcoin.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Absolutely correct my friend. Below is a comment I just wrote on another post. I felt compelled to copy and paste it here because it fit so well...
"The news is everywhere. Inflation in the US is rampant and nearly out of the control of the people who usually control it. The US government has already announced that interest rates will not be reduced until inflation is under control. However, looking at the global picture, it doesn't look like inflation will be contained at all in 2023. So what can we expect? Continued interest rate hikes from the feds, slowed economy and lackluster investor interest in high risk assets like crypto. This means we scan stop dreaming about institutional money coming in to save the day for a while. Stock market should have a stagnant 2023 at best which will place down pressure on crypto. Meanwhile, crypto might show a meager recovery highlighted by some BTC spikes into the 33k to 38k range. Let's not forget also that the WEF has already begun rolling out their "New World Order" and, this calls for huge changes. And the best way to convince the masses to welcome change is to make it fail. You want to change the dollar? Make it fail. You want to change the US postal system? Make it fail. You want to change a government? Make it fail. And we are in fact seeing all these things happening right now".
Tradersweekly
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@cryptospawn, Thank you very much for your kind words and for sharing this paragraph with us.
OTWhale
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@cryptospawn, Yup inflation is still going wild this year, 33-38k BTC is plausible at the next 2024 halving, rn it's going down to 9-13k range.
Tradersweekly
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@OTWhale, We also do not expect to see +$30 000 to be reached. At best, we can imagine a bounce to $20 000 (and perhaps slightly above it). But who knows, perhaps we will be wrong. Nothing is certain.
OTWhale
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@Tradersweekly, At the moment, yes 30K is just out of reach. Anything is possible, but the probability of BTC going past 20K range is low let alone 30K anytime soon. BTC really needs a super strong catalyst to pump it that high and nothing comes to mind. Everything is pointing down until macros get better.
cryptospawn
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@OTWhale, All this is true. No fuel left tin the tank to fuel a comeback. But BTC is resilient and keep in mind many miners are/will be shutting down. Core Scientific alone is set to shut down 32,000 rigs. Big players will step into the dugout and retailers will carry the weight once again just as they did during the birth years of crypto. Then you will see an influx of fresh retail capital enter the market, thereby artificially pumping up the price of BTC once again. And that's how it can reach 33-38k, perhaps only through long one-day wicks, because retailers are quick to cash out. But I too am waiting for the right time to place my low ball 9k traps yup.
kamil92
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@cryptospawn, BTC miners are closing? So why do the hashrate is on rise once again since end of December and why did we have record-high daily hashrate on 6th Jan?
@cryptospawn, I know exactly how hashrate is calculated and how mining of BTC works. The article you link does not bring anything into topic. Yes, some miners are going to close, some are in the process already, but at the same time new ones are opening. You won't see news about new mining companies being open, because nobody cares, nobody will write about it. The fact is the hashrate is still increasing on average. That's the fact.
"The news is everywhere. Inflation in the US is rampant and nearly out of the control of the people who usually control it. The US government has already announced that interest rates will not be reduced until inflation is under control. However, looking at the global picture, it doesn't look like inflation will be contained at all in 2023. So what can we expect? Continued interest rate hikes from the feds, slowed economy and lackluster investor interest in high risk assets like crypto. This means we scan stop dreaming about institutional money coming in to save the day for a while. Stock market should have a stagnant 2023 at best which will place down pressure on crypto. Meanwhile, crypto might show a meager recovery highlighted by some BTC spikes into the 33k to 38k range. Let's not forget also that the WEF has already begun rolling out their "New World Order" and, this calls for huge changes. And the best way to convince the masses to welcome change is to make it fail. You want to change the dollar? Make it fail. You want to change the US postal system? Make it fail. You want to change a government? Make it fail. And we are in fact seeing all these things happening right now".