2 - 4 minute read
According to popular market analyst Mags, Bitcoin (BTC) could rally toward $50,000 in 2023. The chart fractal highlights the similarities between Bitcoin’s ongoing price trends and those recorded after the completion of the 2013-2015 bear market. This includes the consolidation inside the $200-300 range between January 2015 and August 2015, which appears identical to its consolidation between the $18,500-25,000 range after the supposed completion of its 2021-2022 bear market.
BTC’s price broke above the $16,000-25,000 range in March 2023, prompting Mags to point out its resemblance to the breakout above the $200-300 range in October 2015. Since this resulted in a rally toward $700 in June 2016, the analyst sees the scenario potentially repeating in 2023, with the BTC price doubling to $50,000.
“Being bearish here [when Bitcoin’s price is around $28,000] is like being bearish at $350,” Mags added.
The bullish argument for Bitcoin comes amid expectations that the U.S. Federal Reserve would slow the pace of its interest rate hikes.
Lower rate expectations have caused the yield on the benchmark U.S. 10-year Treasury note to decline, boosting investors’ appetite for zero-yielding assets such as Bitcoin and gold. Lower yields have also sapped U.S. dollar demand, which means higher prices for BTC/USD since Bitcoin’s value is largely denominated in the dollar.
However, Bloomberg analyst Mike McGlone has cautioned about a potential bull trap in the Bitcoin market due to a mounting liquidity crunch. He said: “It may be illogical to expect the stock market, crude oil, copper, and the Bloomberg Galaxy Crypto Index to sustain the recent bounces with year-over-year measures of money supply and commercial bank deposits falling around 2%.”
Investors should conduct their own research before making any investment or trading move. While market analysts have highlighted the potential for Bitcoin to rally toward $50,000 in 2023, there are also potential risks to consider such as a liquidity crunch and changes in interest rate policy. As always, it’s important to stay informed and make thought-out investment decisions.
