Will Bitcoin achieve a big reversal in 2023 or continue to fall?

The Bitcoin ($19,524 BTC) community is divided on whether the coin's price will skyrocket or crash in the coming year. Most analysts and technical indicators suggest it could bottom out between $12,000 and $16,000 in the coming months. This has to do with a volatile macroeconomic environment, stock prices, inflation, Fed data, and (at least according to Elon Musk) a recession that could last until 2024

On the other hand, influencers, BTC extremists, and a host of other fanatical "hustlers" believe its price could soar to $80,000 and beyond.

There is evidence to support both sides. One problem is that they may focus on different time frames. There are good reasons to suggest that BTC could fall sharply in the coming months, but could rise in mid to late 2023.

Reasons for BTC Price Rise in 2023

Bitcoin bull markets have historically coincided with four-year market cycles, including accumulation (buy), uptrend, distribution (sell), and downtrend. We typically expect the accumulation part of the process to begin in 2023, although some believe it could be delayed until 2024.

Nonetheless, we may see valuations rise by mid-2023, and there is evidence to support this idea. According to Kevin Svenson, when the 80-week bear market ends, we could witness the start of a bull market around April.

The deflationary nature of Bitcoin, through its "halving" event, also encourages these price increases over time. (A halving causes miners’ rewards to be halved. The next time it is scheduled to happen is April 2024.) Despite market volatility, Bitcoin’s deflationary nature has led to price increases for long-term investors.

However, be wary of the hype. Both influencers and marketplaces know that greed sells. Ethereum's prediction ($1,362 ETH) to grow 10x by 2023 should be viewed with skepticism. And, despite the claims, it's unlikely that Bitcoin will reach $100,000 or even get close to it.

Pessimistic Estimates Bitcoin Falls to $3,500

Other experts say we won't see a spike anytime soon, or even in 2023. Gareth Soloway of InTheMoneyStocks said there's little chance it could even drop to $3,500:

“Bitcoin is going to have a pivot as regulation matures as regulation helps people become more confident ... I think in the short term we’ll see some bounce and then it’ll go down to $12,000 to $13,000 and then I’m going to worry You’re going to be under $10,000 to $8,000, and maybe even down to $3,500 in the worst case, which is a very small percentage, but it’s equivalent to the collapse of Amazon in the Internet age.”

If BTC drops to $12,000 or below, it may not be profitable for miners to run the ecosystem. That would mean deals would no longer be processed, a problem that could cripple the industry.

Let's keep in mind that we haven't seen any strong correlation between cryptocurrency prices and mass adoption, which is not a healthy pattern. Cryptocurrency prices have always been a function of the amount investors (mostly whales and institutions) put into a given asset through derivative contracts and other financial instruments.

Times are changing but sentiment is bullish

There are other questions to be addressed regarding the BTC price cycle. Some believe that these four-year cycles may no longer be appropriate for various reasons. One is that, unlike previous cycles, the majority of BTC is not the only child on the block.

It is competing with many cryptocurrencies that are doing well on most fronts, as well as Decentralized Finance (DeFi), GameFi, Non-Fungible Tokens (NFTs), Decentralized Autonomous Organizations (DAOs), Web3 startups, and much more Profitable investment mechanism. Participating in Web3 and DeFi requires buying ETH, not BTC. Many believe that BTC will rise because people will be "more interested in DeFi." This is unfounded.

However, it remains one of the most favored token institutions and a signature name in the cryptocurrency world. All things considered, bitcoin prices are likely to surge by mid-2023, although we will see a dip in the coming months.

On Oct. 18, more than 38,000 BTC worth $750 million were moved from cryptocurrency exchanges to private wallets, suggesting that whales are accumulating and storing for turbulent times. Movements in exchanges are often interpreted as bullish indicators. Rich Dad Poor Dad author Robert Kiyosaki is bullish on Bitcoin due to interest from institutions and pension plans. As he tweeted on October 7:

“Why buy gold, silver, bitcoin? Bank of England pivot meant buying more GSBC. When pensions nearly collapsed, it exposed the central bank’s inability to fix...inflation. Pension funds have been investing in G&S. Pension funds Investing in bitcoin right now. They know fake dollars, stocks and bonds are toast.”

'Doomsday' Bitcoin surge?

The irony of BTC maximalists is that they believe that a collapse of the existing system and the US dollar (in particular) will be good for Bitcoin and the wider "decentralized" community. Government collapse, they claim, will require a new financial system, and Bitcoin is in perfect shape.

The idea is that there is a neat reverse line between the fiat infrastructure collapse and BTC price increases, where more volatility equates to more price increases. When the world falls apart, decentralized communities simply “fill in the void”.

Of course, the collapse of the petrodollar would send energy prices skyrocketing. It also means that the Bitcoin ecosystem may not be sustainable due to mining issues. It’s a problem Ethereum solved with its September merger, which removed miners from the equation and resulted in a 99.99% reduction in its carbon footprint.

Moreover, a full-scale collapse also means that the evaluation of the dollar is worthless. If hyperinflation sets in, what is $1 million in BTC worth if $1 million can't be used to buy a loaf of bread? Volatility is often Bitcoin’s friend — but only up to a point.

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