Last week crypto market slid and resultantly Bitcoin lost entire gains and above all its value declined. It is expected that the price may decline further because there is a negative impact stemming from the global outlook.
Global Market Conditions Worsening
Bitcoin’s value decline came when central bank officials made statements of continuing strict economic policies.
Presently, there seems no rationale that could increase Bitcoin’s price even if it is assumed that harsh policies are not there. This is so because globally, the market conditions are worsening very harshly and rapidly.
This is further backed by the fact that various media platforms and printed media have taken notice of enormous layoffs in the banking sector.
It has been further reported in various news reports that tech giants have decided to cut short their job vacancies.
There shall be hence no Christmas season, particularly for Bitcoin and Bitcoin community.
What Could Be Expected From Bitcoin In The Near Future?
It wouldn’t be wrong to apprehend that the year 2022 was full of crises. Russia invaded Ukraine and there is a threat of a nuclear bomb.
China is struggling in containing the pandemic, inflation and energy costs have severely hurt consumers and poverty is rising.
The past seven days were however essential as if every issue faced year-to-date would be solved in just 7 days. This was so because Bitcoin bulls returned which took Bitcoin near to its 55-day simple moving average i.e. $18K.
However, the US inflation data release impacted Bitcoin’s progression and lowered its value subsequently.
Thereafter, central bank officials’ also accelerated the declining process when they clarified that the beginning of 2023 does not mean easing up of policies.
So it is certain that these issues will continue to remain intact even at the beginning of 2023. Keeping in view this, Bitcoin is likely to fall below $16,000.
The risk is such that there is a possibility of a 20% decline which would mean that the value could fall to $12,563.00.
The current price level of Bitcoin i.e. $16,800 plus seems to be a fragile level. Contrary to this, however, the price range of $12,000 is a very solid technical support point.
Within all this, there are positive aspects as well which are likely to support Bitcoin in 2023. For instance, one positive aspect would stem from the recession, whose happening is almost inevitable.
The recession is going to cause a dent in the trading prices of the major currencies. The traders are already fearing for that day and they have already started to invest in other major assets such as Gold.
You must already know that the trading price of gold has surged tremendously since November. It is all thanks to the growing fear of recession, compelling people to save money for assets offering a strong hedge against the downfall.
Bitcoin may also become one of the choices for investors as the year 2023 kicks in.
This means that if the recession is there, hence, there shall be reduced demand for commodities. Reduced demand for commodities would ultimately mean a decline in the prices of gas, copper, and oil.
Consequently, it wouldn’t be less than good news, particularly for domestic consumers as it would bring a decline in energy costs. Hence, in the process, the disposable budget would automatically open up.
Certain, some part of the disposable budget can be earmarked for investment purposes which also is a positive aspect for cryptocurrencies.
Especially Bitcoin would then be able to attract an entirely fresh lot of investors by June 2023.
Meanwhile, one cannot underestimate Bitcoin for going above $20,000 which may happen at the start of 2023. However, the value surge would not stay long keeping in view the fact that global issues will continue to exist.