BTC price up 160% in 2023 — 5 things to know in Bitcoin this week

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BTC price up 160% in 2023 — 5 things to know in Bitcoin this week
Bitget


Bitcoin (BTC) begins the Christmas holidays with a bump as BTC’s price tests support at a crucial time.

The last week of 2023 is already seeing volatility — and in the year where BTC/USD is up more than 160%, anything can happen.

What are traders’ expectations for the yearly close?

The Bitcoin chart checkpoint is fast approaching, with price action in a range between $40,000 and current 19-month highs at $44,730.

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Looking back at the events of the past 12 months, there is much to be proud of for Bitcoin bulls — huge network growth, repeat all-time highs for mining difficulty and hash rate, as well as an accompanying transformation in miner profitability.

On-chain metrics have also flipped into bullish territory en masse, signaling the chance that the new bull market is still in its early innings.

On the horizon are major events for all Bitcoin and crypto investors — a decision on the United States’ first spot price exchange-traded fund (ETF) and the next block subsidy halving.

At this pivotal point in Bitcoin’s history, Cointelegraph takes a look at the current state of the market and highlights some key topics to focus on in the countdown to the end of the year.

BTC price dices with crux $43,000 level at Christmas

After days of sideways trading, BTC price action finally offered fresh volatility into the weekly close.

A dip to $42,700 on Bitstamp was the result, data from Cointelegraph Markets Pro and TradingView shows, before a modest recovery above the $43,000 mark.

BTC/USD 1-hour chart. Source: TradingView

This all played into the roadmap for popular trader and analyst Credible Crypto, who over the weekend forecast a return to that area before Bitcoin’s next leg higher.

“Bids filled, all metrics look fantastic still, send it,” part of his latest commentary on X (formerly Twitter) stated.

Fellow trader Crypto Ed, creator of trading team CryptoTA, agreed that current levels needed to offer a reversal.

$43,000 is a divisive level; other popular commentators, notably trader Crypto Chase, see it as the point at which bulls are destined to run out of steam in the longer term.

Crypto Chase added to shorts at $43,000 earlier in December, continuing that the upcoming ETF approval should mark the local top before “reality” kicks in.

As Cointelegraph reported, the idea that approval day will form a “sell the news” event has long been gathering popularity, including among professional trading firms.

“For this reason, we expect topside resistance for BTC in the 45-48.5k region and a possible retracement to 36k levels before the uptrend resumes,” QCP Capital wrote in its latest market update last week.

2023: Bitcoin bounces back in classic style

Looking back at 2023, however, there is no doubt over how far Bitcoin has come.

Since the yearly open, BTC/USD has gained in excess of 160%, with 60% gains in Q4 alone, per data from statistics resource CoinGlass.

BTC/USD returns (screenshot). Source: CoinGlass

Even this month has produced 15% gains so far — Bitcoin’s best December since 2020 — despite not repeating the breakout beyond all-time highs seen at the time.

Coming after its longest-ever bear market, this renaissance has been music to the ears of long-term holders, who, as Cointelegraph reported, have stubbornly refused to sell BTC.

This behavior has endured despite the “up-only” nature of the year’s price performance, with upside tempered by only modest consolidations.

“One of the standout features of the 2023 market has been the remarkably shallow depth of all price pullbacks and corrections,” on-chain analytics firm Glassnode wrote in the latest edition of its weekly newsletter, “The Week On-Chain,” on Dec. 19.

“Historically, periods of bear market recovery, and bull market uptrends for BTC regularly see at least -25% pullbacks from the local high, with many examples exceeding -50%. However, the deepest correction in 2023 closed just -20% below the local high, suggesting that buy-side support, and the overall supply and demand balance has been favourable all year.”

Bitcoin bull market corrections annotated chart (screenshot). Source: Glassnode

That “favorable” climate has led all Bitcoin investor cohorts back to aggregate profitability, yet as Glassnode notes, this is not so high as to spark mass selling and risk an uptrend breakdown.

Examining the Net Unrealized Profit/Loss (NUPL) metric, researchers showed that profitability currently echoes mid-2019, when Bitcoin saw a mid-cycle high.

“The NUPL metric for each cohort is not yet at euphoric highs, but is also comfortably above the respective cohort break-even level,” they summarized.

Bitcoin NUPL annotated chart (screenshot). Source: Glassnode

At $43,000, meanwhile, BTC/USD remains 37% below its current all-time high.

Macro markets wrap up a year of rate hikes

In a typically quiet holiday week, there is little expected when it comes to macroeconomic volatility catalysts for risk assets.

U.S. markets are not trading for much of the remainder of 2023, with jobless claims the last data print of interest for the year, due on Dec. 28.

This leaves markets cautiously optimistic for major macro policy changes to come next year. Months of U.S. data have fed the narrative of declining inflation with barely any exceptions.

Now, the Federal Reserve faces the question of when to begin unwinding interest rate hikes — a move known as a “pivot” — and how fast.

As Cointelegraph reported, bets on the move’s timing include as early as next month, while the Fed itself has played down such odds.

Per data from CME Group’s FedWatch Tool, markets remain unconvinced that officials will lower rates at the next meeting of the Federal Open Market Committee, or FOMC, on Jan. 31.

Fed target rate probabilities chart. Source: CME Group

How good do Bitcoin miners really have it?

When it comes to Bitcoin success stories of 2023, nothing arguably tops network fundamentals.

Both hash rate and difficulty have offered a rags-to-riches transformation this year, and the trend shows no sign of stopping with the next halving just months away.

Bitcoin network fundamentals overview (screenshot). Source: BTC.com

According to data from monitoring resource BTC.com, mining difficulty is due to hit yet more all-time highs at its next adjustment, this not due until early January. The latest adjustment saw nearly 7% added — the fourth-highest uptick of 2023, taking difficulty to 72 trillion.

The same is true of hash rate, as miners deploy ever more processing power amid a surge in profitability.

The presence of Ordinals inscriptions has boosted fee revenue considerably in the second half of the year — in mid-December, the proportion of their income from fees hit 37%, per Glassnode data.

Bitcoin % miner revenue from fees chart. Source: Glassnode

Some commentators argue that miners are seeking to hoard BTC into the halving, which will immediately cut the reward per block by 50%.

For Glassnode lead on-chain analyst Checkmate, however, there is a sobering lesson amid the apparent miner comeback.

The golden era for accumulating BTC was years ago, he lamented last week, revealing that he bought in at the exact top of the 2017 bull market.

Greedy for gains this Christmas

Despite the slower pace of BTC price gains toward the end of the year, the average investor is increasingly guided by a sense of greed.

Related: Price analysis 12/22: BTC, ETH, SOL, BNB, XRP, ADA, AVAX, DOGE, DOT, LINK

This is the final conclusion of the Crypto Fear & Greed Index, the popular sentiment gauge that looks set to round out 2023 at levels seen during Bitcoin’s $69,000 all-time high two years ago.

At 73/100 as of Dec. 25, the Index, which uses a basket of factors to compute the average mindset across the crypto investor base, is firmly in its “greed” bracket.

Crypto Fear & Greed Index (screenshot). Source: Alternative.me

As Cointelegraph reported, sustainability of the bull market as viewed through the lens of Fear & Greed should not pose a problem just yet. Throughout past price cycles, only readings above 90/100 have market macro market turnarounds.

With November 2021 being a conspicuous exception, the question for hodlers now is a classic one: Is this time different?

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.





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