YEREVAN (CoinChapter.com) – Bitcoin has seen a turbulent 2022 and stepped into the new year with the BTC price below $17,000. Moreover, the flagship crypto could see more rough waters ahead and slide to $13,000 before managing a convincing rally. Here are several factors behind the prediction.
Bitcoin technicals favor the bears.
CoinChapter previously predicted Bitcoin to drop to at least $13,000 in 2023. Ryan Wilday, the author of “Crypto Waves,” also took a bearish stance on the upcoming year, considering several key technicals. One such predictor was the Elliot Wave analysis.
In detail, The Elliott Wave Theory is a form of technical analysis that looks for recurrent long-term price patterns related to persistent changes in investor sentiment and psychology.
The theory identifies impulse waves that set up a pattern and corrective waves that oppose the larger trend. It looks for five waves off a low to suggest that a trend can change.
Elliot Wave theory targets the BTC price at $13K
According to the Elliot Wave analysis, Wilday considered $13,000 to be an approximate target for Bitcoin. The analyst commented he was tracking the said target as a “secondary” immediate scenario. “where we have seen all of wave iv where the black count indicates (B).”
This scenario became a solid potential when Bitcoin formed an impulsive move down from Y/(B). This indicates an immediate move down $13,500 is possible, and it would be confirmed by a drop through $15,875 from here. I rendered this potential in red.
further detailed Wilday.
Meanwhile, bearish technicals aside, there are macroeconomic factors that could influence the flagship crypto’s price in 2023.
Bitcoin might not stand against the strong dollar.
The dollar index (DXY), a gauge of the Greenback’s value against a basket of 6 major currencies, jumped 1.2% on Jan 5. As CoinChapter reported in early November, the dollar’s 2022 rally was partially due to large hedge funds, such as Brevan Howard, running wagers on the greenback.
Once the Federal Reserve somewhat softened the interest rate hike policies, the DXY lost altitude, as demonstrated in the chart below.
However, the latest FOMC meeting minutes indicated more interest rate hikes ahead, which means the DXY rally is far from over. Given the erratic inverse correlation between the dollar strength and Bitcoin, investors could expect more red candles ahead for the crypto market.
Michael Moran of ACY Securities backed the bullish stance for the greenback.
The Dollar has come back strongly in 2023 after falling in late December. […] Wages and Jobs Creation [are] expected to moderate further. Which could lead to a softer Dollar heading into the data. For today though, expect the Greenback to maintain its strength versus most Rivals.
said the expert.
Thus, investors should closely look at the upcoming events in Washington, D.C., to pin the BTC price target more precisely. As of Jan 5, the bearish scenario for 2023 seems likely, given the unfavorable market conditions and Bitcoin’s grim technicals.
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