After a tumultuous 2022 tarnished by the collapse of industry giant FTX, Bitcoin 2023 has been a rollercoaster recovery. With Bitcoin (BTC) now standing atop a +160% gain year-to-date, let’s take a deep dive into how BTC price got here.
January Recovery and Bullish Sentiment
The middle of January saw Bitcoin spring back into life after a seismic collapse before Christmas triggered a major downtick. The BTC price dropped as low as $15,499, but macroeconomic factors played a significant role in January’s recovery. Traders shifted to bullish posturing after indications of a slowdown in US inflation from the Fed, which bolstered markets worldwide. This shift in sentiment led to a major upside across 2023, with crypto assets under management exploding +36.7% throughout the month.
Macro-hopes of a rate cut failed to materialize, but the shift in market sentiment was enough to trigger a major upside across 2023.
Despite the strong bounce in January 2023, subsequent price action saw a major -22.4% drop in Bitcoin price mid-month. The move was triggered by increased regulatory attacks against the crypto industry by American regulators. However, bullish sentiment in Asia, notably in Hong Kong, reassured global markets and fueled a recovery from these dramatic drops.
Volatility and Recovery
As Bitcoin price pushed up following the regulatory crackdown, the leading cryptocurrency mounted a solid recovery. BTC price hammered up for a vital test of topside resistance at $30,000. However, a resounding market rejection at these price levels triggered another tumble, which saw Bitcoin price drop -17%. Nevertheless, the price was still able to recover and end the month in the green.
May saw Bitcoin’s first month-on-month drop of 2023, with price ultimately trading at a -8% loss across the month. Diminishing liquidity in crypto markets fueled by sell-offs under $27,500 and a reaction to monetary tightening moves by the US Fed were driving factors for the May BTC price drop.
Driving factors for the May BTC price drop include diminishing liquidity in crypto markets and a reaction to monetary tightening moves by the US Fed.
June once again saw Bitcoin 2023 resume a rallying posture as the price surged 28% over the following weeks. This appears to have been triggered by a major short-squeeze against over-leveraged open interest that piled into the chart around $24,800. Traders positioned to short a further drop were left reeling from $36.6m in short liquidations.
July saw Bitcoin price attempt to breakout above $30k but experience a major downside tumble. BTC price lost -8.8% across the month and ended back below $30k resistance at $29,080. Critically, Bitcoin began to become insulated from macroeconomic factors.
August was a volatile month, with Bitcoin 2023 ending at the lowest level since July. Dramatic -$2,000 losses in price on August 17-18 fueled the downside move. The release of damning CME data, which showed leveraged funds ramping up bearish bets, and CoinBase launching Bitcoin Futures trading for US customers likely contributed to the price drop.
September saw a bounce within the trading channel as Bitcoin found support at $25,000. This led to an impressive +12.1% push to touch resistance from the 200DMA around $28,000, despite concerns from the SEC.
Touching lower support at $25,000 triggered a bounce within the trading channel, fueling price on an impressive +12.1% push to touch resistance from the 200DMA around $28,000.
October witnessed a titanic +14.5% daily price move as Bitcoin surged above $30,000. The onset of Bitcoin Spot ETF fever drove traders to panic buy and FOMO into the leading cryptocurrency following a Court decision that overruled the SEC’s previous move to reject GBTC’s conversion into a Bitcoin Spot ETF.
Winter’s breakout rally hit rocket volatility with December’s onset. The first week saw Bitcoin price explode a whopping +18.35%, leaving BTC price trading high at $44,694 a week later – Bitcoin 2023’s high. With Bitcoin now sat atop +160% YTD gains, markets appear poised for a highly-anticipated final decision on Bitcoin Spot ETF applications and the upcoming Bitcoin halving event estimated for April 16, 2023.
Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
