Will Bitcoin Rise Again? – Forbes Advisor INDIA

2022 has been very tough for all the cryptocurrencies including Bitcoin. In fact, the largest cryptocurrency in the world, Bitcoin has lost almost 65% of its market value in the whole of 2022. Crypto enthusiasts were caught off guard by a series of unfortunate events such as the Terra Luna crash, which fell out of the biggest. crypto exchange FTX, and the threatening macroeconomic conditions.

But there are several questions swirling in everyone’s mind: what will happen next? Will Bitcoin Ever Rise Again? Or will it crash just like in 2022?

Here is a detailed read that will help you find out all the possibilities for Bitcoin prices in 2023.

Will Bitcoin Recover in February 2023?

(The Bullish View)

Bitcoin is unable to hover above the $23,000 levels, which it passed on January 21, 2023, for the first time in the last six months. At the time of writing, the daily trading volume for Bitcoin is over $21.8 billion. Bitcoin reacts to every move of the Fed meeting that happens in the US amid cooling inflation. However, Bitcoin pro investors are eagerly awaiting more gains and looking for it to stabilize beyond $23,000 levels.

It should be noted that the Bitcoin price showed positive signals when it crossed crucial levels of $16,800. The price recovered and continued to show bullish signals until now. Let’s take a look at what picture technical indicators show as of now:

• Hourly Moving Average Convergence/Divergence (MACD) – Gaining momentum in the bullish zone.
• Hourly RSI (Relative Strength Index) for BTC/USD – Above the 85 level.
• Support levels – $22,700
• Resistance levels – $22,900.

(Data sourced from CoinMarketCap.com)

One of the reasons why experts are bullish on Bitcoin is that next year, 2024, is a year for Bitcoin’s halving event. The Bitcoin halving event happens every four years where Bitcoin rewards to the miners are halved (the miner’s payout will be reduced to 3,125 BTC). This event is generally seen as positive for Bitcoin’s price, as the halving helps contract the supply. Historically, halvings have been seen as a very good sign for Bitcoin’s price to accelerate.

Bitcoin halving history

So if we observe the data closely, past Bitcoin halving events have been able to establish long-term bullish drivers for Bitcoin’s price. The Bitcoin halving event is directly related to its deflationary tendency and squeezes the supply, helping the BTC price to rise further. Since Bitcoin, being a decentralized cryptocurrency, cannot be printed by governments or any central banks, thus the total supply of Bitcoin is limited.

The second reason for Bitcoin rally in 2023 is the US Federal Reserve’s recent less aggressive interest rate hike of just 25 basis points, which helped Bitcoin maintain its upward trajectory and outperform compared to other asset classes.

Also, large investors known as “Bitcoin Whales” have started accumulating BTC again. According to data from the chain aggregator Santiment, the big Bitcoin whales keep between 1,000-10,000 BTC in their wallets, indicating that investors have filled their wallets with a lot of BTC, which could show the recovery sign in the price of Bitcoin.

Will Bitcoin Crash Again in 2023?

(The Bearish View)

There is another set of investors, companies and large institutions who have an opposite (bearish) view of Bitcoin and firmly believe that Bitcoin may fall in the near future. They considered this rally a big “bull trap” rather than a “bull run”. Veteran global investor Mark Mobius, the billionaire founder of Mobius Capital Partners, already predicted a major fall in 2022 and said that Bitcoin could even fall to the $10,000 range.

Similarly, another maverick investor, Matthew Sigel, head of digital asset research at VanEck, a global investment manager, sees Bitcoin falling to $12,000 levels, citing higher energy prices.

Also, global bank Standard Chartered’s prediction about Bitcoin is super surprising. They predicted that Bitcoin could fall to $5000 levels in 2023.

Experts believe that the rising interest rates and tighter monetary policy will not allow Bitcoin to recover strongly in the near future. As in this type of uncertain market, investors will not prefer to invest or buy risky assets like Bitcoin. And those who have been holding BTC can sell their positions, putting undue pressure on the markets again.

How Should Indian Investors Approach Bitcoin in 2023?

With such varied predictions about Bitcoin, what should be the approach of Indian crypto investors? With such uncertainty around, perhaps it is the best time to observe the Bitcoin movements closely rather than taking any action that could lead to serious losses. Even the Indian crypto industry experts believe that it is a wait-and-see mode for crypto investors and further steps need to be taken very cautiously.

Dileep Seinberg, founder and CEO of MuffinPay, believes, “Bitcoin’s price movement depends on macroeconomic factors, including inflation concerns and interest rate hikes by the US Federal Reserve and the other central banks. Apart from this, waning fears of economic slowdown or recession may also affect Bitcoin prices.”

He strongly believes that Indian investors should be cautious about investing in Bitcoin in 2023 as this year is likely to remain a mixed bag and crypto investors should not go all guns blazing.

Punit Agarwal, founder of KoinX, suspects that inflation and recession are the main themes that crypto investors should watch for, even in 2023. Agarwal stated, “Indian investors should have a long-term perspective when investing in crypto assets, including Bitcoin.”

He believes that investors should instead opt for regular Systematic Investment Plans (SIPs) in Bitcoin to provide long-term gains.

On the contrary, certain market experts have full faith in Bitcoin and expect it to rise again. Raj Karkara, CEO of ZebPay, seems quite bullish on Bitcoin. He said “the fundamentals of Bitcoin remain rock solid regardless of market conditions.” He further gave an example of one of the research of the market intelligence firm Glassnodes which said that close to 60% of circulating Bitcoin has not yet moved in 2022 and long-term investors are still bullish on Bitcoin.

“Bitcoin could rise again in 2023 assuming there are no macroeconomic headwinds.” says Karkara. He also believes that crypto traders and investors should thoroughly research the fundamentals and technical characteristics of an asset before making a buying or selling decision. Using a systematic investment plan (SIP) approach in Bitcoin can also help investors hedge against market volatility.

The bottom line

There are several views and predictions about Bitcoin, some are bullish and some are bearish. Only time will tell where Bitcoin will go next. Known for its resilient nature, Bitcoin has enormous capacity for a comeback. For the past decade, several veteran experts have predicted that the Bitcoin bubble will soon burst. However, the poster boy of cryptocurrency is still favored by many and has also helped investors make significant fortunes over time.