The leading cryptocurrency Bitcoin (BTC) is consolidating after the collapse of FTX. So in which direction will the price break in 2023? Could it be gathering strength to rally to dizzying $30,000 highs? Or is it preparing for a collapse deep into the $5,000 levels? Here are the details…
Will Bitcoin continue to see selling pressure?
Bitcoin was trading between $15,770-17,350 during the market crash caused by FTX in November. In the last two weeks, it has been unusually consolidated. What will happen next is not yet predictable. Jacob Sansbury, co-founder of retail investor services firm Pluto, has expressed his views on the matter. Sansbury said that he believes most miners, who are big Bitcoin holders, are exiting positions to finance their equipment and operations, to pay off debts borrowed in fiat.
Now the question we have to ask ourselves is: Are there any sellers left in this market? In my opinion, no, not much left.
Indeed, Bitcoin’s recent calm may be due to less selling pressure. The amount held on exchanges for trading decreased, according to the data. Data from Coinglass shows that this amount fell steeply from 2.33 million at the start of the year. Big sales have already happened. In November, there was a loss of $10.16 billion in 7 days in Bitcoin investments.
Miner sales could be the first big threat
Bitcoin has already dropped more than 60 percent in 2022. However, it started to see its first annual loss since 2018. Bob RasKalan, co-founder of the stock market and digital asset firm Sologenic, expressed his views as follows:
Many investors place their Bitcoins in cold wallets. That should strengthen a base price around $16,000. Without more surprises in the market, it’s hard to imagine that BTC would drop drastically… If it weren’t for the high-profile crash of FTX, Celsius, and Terra this year, the price of Bitcoin would currently be close to $25,000.
The first potential danger is the risk that, as mining becomes increasingly expensive, more Bitcoin miners will be forced to sell their holdings to stay afloat. Ben McMillan, chief investment officer of IDX Digital Assets, said:
Miners as a group are starting to become unprofitable below $20,000, so we’re below (this) point.
Pay attention to these developments
CrytpoQuant’s miner reserve indicator has dropped about 7,722 Bitcoins since November. Experts also noted concerns about GBTC, the largest Bitcoin fund. 22, DCG’s CEO told shareholders that parent company Digital Currency Group, which owns Genesis Trading, owes $575 million to Genesis’ crypto lending arm. Coinglass data indicated that GBTC’s discount to net asset value is at an all-time low of 48 percent.
It also showed that the shares had not been trading at a premium since March 2021. DCG said last month that the woes in Genesis’ lending business had no impact on DCG and its subsidiaries. However, he explained that the underlying assets were also not affected. In addition, the experts said at the FED meeting on Wednesday, a more hawkish statement than expected will increase risk appetite. As Cryptokoin.com also reported, more hawkish decisions will negatively affect the BTC price.
What signals does Bitcoin technical analysis show?
There are scenarios for Bitcoin to jump to $ 30,000 or to drop to $ 5,000 in 2023. Some analysts said that Bitcoin has found support between $16,000 and $16,800. Also, Bitcoin may face resistance at $17,490. However, technical analyst Eddie Tofpik pointed out that any long-term rally will be difficult. Tofpik shared his thoughts on the subject with the following words:
Whenever we see a rally, prices go one step up and then two or three steps down.
Uncertainty remains for the leading cryptocurrency. However, Arcane Research analyst Vetle Lunde also shared his views with investors, saying:
Remember that big dips tend to follow a long-term directionless market full of surprises.
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