At the time of writing, Bitcoin is sitting at $17,784.68, a 4.51% increase in the last 24 hours. The coin saw a sharp uptick in price today, but it started to trend downwards again.
Still, the price continues to grow steadily since early November, and it’s looking like it will make a recovery by the end of December, and the start of next year.
Let’s take a look at why that’s the case.
Technical Analysis
To understand where Bitcoin is going, we must first take a look at its performance during 2022.
Like virtually all cryptocurrencies, Bitcoin has had a rough 2022. The coin started the year at strong $47k, but amid inflation fears, and a broader move to sell off what were seen as risky assets the cryptocurrency dropped over $10k during January, and while it would recover by February, things would only go worse from there.
The most recent event to affect the price of Bitcoin was the implosion of FTX, which rocked the crypto market in general. Bitcoin went from $20k to $15k in 2 days, but the coin is steadily recovering.
Even before November had ended, Bitcoin was already trending upwards. It rose from $16.4k on November 29th to $17.1k by December 1st, and while it has fluctuated between $16.7k and $17.8k it nonetheless has shown a growth tendency throughout the month that’s much better than last month’s.
Bitcoin’s price fluctuations between November and December. Graph by CoinDesk
However, the price of the coin could trend downwards again depending on the way the market reacts to the first hearing of the FTX case, and Sam Bankman-Fried’s testimony for congress today.
Another event that will affect the price of the coin is the outcome of the Federal Open Market Committee (FOMC) meeting on Wednesday 14th, the last one of the year.
As Bitcoin trades in a narrow range because of the lack of volatility, its technical characteristics have changed significantly. While Bitcoin had a bullish trend in the last 24 hours, it has formed a downward channel in the 4-hour timeframe.
Bitcoin could also reach the $18,150 level if a bullish crossover occurs above the $17,650 level
It is possible for a bearish crossover below $17,000, a level extended by the 50-day simple moving average, to start a selling trend that may last until $16,650.
As with any cryptocurrency, it’s hard to say for certain where Bitcoin will be by the end of the month, much less next year. Fears of a recession could cause investors to pull back from the currency, and the results of high profile cases such as the Grayscale Investments lawsuit against the US Securities and Exchange Commission could bolster or significantly hinder the evolution of the coin.
It honestly looks like the coin could fall either way. If the results of the lawsuit or the FOMC meeting are bad, then Bitcoin would most likely crash again.
If not, there’s a good chance the coin continues its slow recovery into 2023. However, we don’t see Bitcoin reaching its early 2022 heights unless there’s major positive shakeups to the crypto industry.
Bitcoin Analysis Conclusion
Bitcoin is nowhere near as healthy as it was back during early 2022, and it will be starting 2023 with a timid yet consistent growth. The effects of the FTX collapse affected the price of the coin significantly, but it’s looking like it will make a recovery by January of next year. As for the rest of 2023, Bitcoin looks like it’ll trend upwards slowly, but it’s unlikely it will reach the heights of previous years during 2023.
Are Bitcoin Transactions Traceable?
Due to the use of blockchain technology, Bitcoin offers complete transparency, and all transactions are recorded on a distributed ledger. Anyone can access these ledgers, as they are open to the public. As a result, Bitcoin transactions can be traced.
Why Is Bitcoin Down?
A number of different factors caused the downward spiral of Bitcoin in 2022. Inflation, a loss of investor confidence, the FTX collapse, and the Russo-Ukrainian war are just a few examples of events that have massively affected Bitcoin’s price.
WeInvests is a financial portal-based research agency. We do our utmost best to offer reliable and unbiased information about crypto, finance, trading and stocks. However, we do not offer financial advice and users should always carry out their own research.
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