Bitcoin's Price Outlook: Will BTC Face Further Declines or a Promising Bull Run in 2023?

Summary: Bitcoin's recent price volatility has raised questions about its future trajectory. Traders and investors are closely monitoring key support levels and technical patterns.2023. Traders and investors are closely monitoring key support levels and technical patterns.

Bitcoin's Future: Will a 40% Drop Impact Holders in the Near Future?

Bitcoin (BTC), the dominant cryptocurrency by market capitalization, has entered a sideways trend following a significant drop from the $28,000 level. Currently valued at $26,800, BTC's performance across all time frames has investors and traders wondering whether another crash is imminent.

Traders and cryptocurrency enthusiasts are closely monitoring Bitcoin's trajectory after its recent price dip. According to renowned crypto analyst Miles Deutscher, Bitcoin typically experiences a temporary rally after a decline, followed by a new low 5-8 weeks later.

Analyst Predicts a Bullish 2023 for Bitcoin Based on Historical Data

Cryptocurrency analyst Adrian Zdunczyk suggests that based on historical data, pre-election years have been the most prosperous for Bitcoin. Zdunczyk highlights a remarkable 98.8% chance of a bull run in 2023. Despite the usual weakness in the first half of the year, Zdunczyk anticipates a potential bullish trend emerging in the coming months.

Support Levels

Analyzing the weekly chart, Zdunczyk notes that Bitcoin is currently experiencing a complete regression to the 200-week trend, marking a mean reversion. While Bitcoin's correlation with the S&P 500 stands at a significant 0.42, the critical support level near $25,000 has held its ground. However, a break below this level could result in a price decline toward the lower $20,000 range.

Zdunczyk believes that if Bitcoin remains below $30,000, there is a possibility of further downside. However, the support level has been confirmed by various techniques after a successful retest of the 200-day baseline. Additionally, the long-term trend appears temporarily exhausted, accompanied by a decrease in 50-day average volatility.

Resistance Levels

According to Zdunczyk's assessment, Bitcoin has completed a clear head and shoulders pattern, with a breakout target of $22,000. Alternatively, failure to break the pattern could trigger a cascade rally, pushing the price beyond $35,000.

At present, local resistance is observed at $28,000. The bears maintain control until a decisive breakout occurs above this level. Bitcoin bulls anticipate a firm upward trend once a breakthrough beyond $30,000 is achieved.