Bitcoin outlook for late 2023 and early 2024
The beginning of 2023 was marked by a sharp rise in . A rise of 58% and approaching the $32,000 level in July created optimistic expectations among investors. However, mid-August saw an unexpected drop due to a number of events, including a Wall Street Journal report on the sale of bitcoins to SpaceX. As a result, the price hit the $26,000 mark in a matter of hours. This incident raised doubts about the cryptocurrency's future.
Today's bitcoin stands on the edge where optimism mixes with anxiety.
To develop their potential, cryptocurrency markets must overcome challenges related to regulation, macroeconomic instability and fluctuations in demand. Regardless of the direction bitcoin takes, one thing remains the same: its impact on financial markets will continue to generate surprise and discussion among traders and investors around the world. In this context, bitcoin continues to be an inexhaustible source of interest and drive for all who follow the dynamics of the cryptocurrency world.
Bitcoin faces some serious questions in the second half of 2023, and its future seems uncertain in light of recent events. Until mid-July, it looked like 2023 could be a breakout year for bitcoin. Quotes were up 89.5%, and both institutional and retail investors were shifting en masse to BTC as an inflation-protecting instrument, similar to gold. Rumors that large investment firms were going to offer BTC only reinforced this trend.
However, bitcoin's momentum slowed and then suffered a dramatic collapse in mid-August due to the SpaceX story. Additionally, inflation fell and interest rates remained high, encouraging investors to shift from BTC to government bonds. Increased regulatory oversight in the cryptocurrency market has spooked many institutional investors, who have reduced their stakes in digital assets.
At the moment, the fear and greed index for bitcoin is 46. The index has dropped significantly compared to July, when it reached 62. This index takes into account volatility, trading volume, users' opinions on social media and online search trends.
As a result, bitcoin failed to hold a breakout above the key resistance level of $31,000 and instead began to gradually decline, testing the support level around $26,000. Now the coin is again demonstrating growth dynamics, but the prospects for the development of this movement remain limited.
Bitcoin's prospects for the coming yearThe recent dynamics of bitcoin movement indicates the presence of serious pressure on the cryptocurrency. Buyers are in no way able to consolidate above $31,000. All this indicates that BTC may face a bearish correction in the next few months and possibly by the end of the year.
Looking at the chart, we see good support levels at $25 175, $21 525 and $18 650. The decline may slow down temporarily at $25 175, but this weak support is unlikely to hold. $21,525 is a much stronger support that is expected to provide a long-term entry point for BTC.
In a worst case scenario for bitcoin investors, bitcoin could experience support at $18,650 or even return to its 2022 low of $15,760.
Before investing in bitcoin or any other cryptocurrencies, investors should carefully assess their risks. Cryptocurrencies are highly volatile and unregulated in most countries. They can bring both gains and losses. Investing in cryptocurrencies involves serious financial risks and requires prudence and professional advice. Investments involve the possibility of capital loss.
By the end of 2023, the bitcoin price is expected to stabilize near a support level, probably $21,500. This will be the starting point for bitcoin's slow recovery in 2024. The US Federal Reserve is expected to ease , which will take pressure off the cryptocurrency market and encourage investors to invest in BTC.
At the same time, a bill that would create clarity in the regulation of cryptocurrency investments in the U.S. could reduce uncertainty for investors. Although bitcoin is regulated as a commodity, clearer rules may also inspire new investors to enter the world of cryptocurrencies and purchase bitcoins.
However, don't expect bitcoin to surge sharply in 2024. These positive trends will develop slowly and many investors will feel uncertainty after a mixed 2023. With this in mind, we expect bitcoin to recover to its support/resistance level at $25,200 and possibly make an upside move to return to the 2023 high around $31,000. Admittedly this seems unlikely without a significant catalyst encouraging investors to get into BTC.
There is also a possibility that bitcoin will not benefit from the expected macroeconomic recovery. In that case, it could test its 2022 low around $15,500.