CryptoWill Bottom? Crypto Market Prediction 2023 Doesn’t Look So Good

Jay Crypto

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The Crypto market has been in total chaos for this whole year. But, what’s next for the market? Crypto market predictions for 2023 don't look good because analysts say crypto will bottom. Huobi and several other predictions have hinted that more pain might be coming. 

2022 may not have been a good year for stocks, but it was a terrible year for cryptocurrencies. The S&P 500 is anticipated to end the year 2022 with a 17% loss, continuing this year's long losing run for stocks. The situation for Bitcoin and other popular cryptocurrencies is significantly worse. BTC is currently down 74% on the year, while Ethereum has also plunged 74%. The majority of other significant cryptocurrencies have lost more than 90% as the volatility curve is extended.

Bitcoin Price Meltdown in 2022

Do you remember when the Federal Reserve held interest rates at zero and inflation was only temporary? How much can change in a year. Bitcoin (BTC) was approximately $48,000 and Ethereum (ETH) was worth over $3,800 in January 2022, with the Fed's fight against inflation being the key factor.

Losses shouldn't come as a surprise to anyone because the past year has been littered with crypto breakdowns, crashes, and upheavals. The current debate is over whether the current state of the market will remain chaotic in 2023 and how long the crypto winter may last.

We will analyze the predictions of several analysts that crypto will bottom. We will also look at the crypto market prediction for 2023. Let’s get going.

Will this Crypto Winter End Soon?

  Cryptocurrency has experienced numerous booms and busts over the years. For example, Bitcoin (BTC) saw a significant increase in price in 2018, reaching nearly $20,000 before falling 84% to $3,000. In November 2020, BTC rallied again to almost $17,000, before experiencing another decline in May 2021. 

Past and Current Crypto Winter

However, analysts believe that the current downturn, referred to as the "crypto winter," could last longer due to macroeconomic factors such as high inflation and political instability. The crypto market has not previously coincided with a bearish market in the global financial space until recently, as the stock market enjoyed a long bull run until the end of 2021. 

However, the combination of high inflation and Fed interest rate hikes has affected both the stock and crypto markets. To understand how long the crypto winter will last, one must consider how long elevated inflation will keep the Fed's hawkish monetary policy in place. Easing inflation and falling rates are among the only things that can help the crypto market recover.

Crypto Predictions 2023 

We will explore crypto predictions for 2023 from different institutions and expert investors. Let’s jump into it.  

Huobi Predicts Crypto Will Bottom 

According to Huobi Global's annual report, the bear market in the cryptocurrency space may soon be over, with the market expected to reach its bottom in early 2023. On January 1, 2022, the crypto market had a total market capitalization of approximately $2.2 trillion. However, the bear market has caused a loss of almost $2 trillion, dropping to a low of $847.6 billion. 

Huobi Predicts Crypto Will Bottom in 2023

 The bear market was worsened by macroeconomic factors such as interest rate hikes and inflation, as well as the collapse of several companies. This led to widespread contagion and forced many companies into bankruptcy, resulting in significant losses for investors.

 The decentralized finance (DeFi) ecosystem was particularly hard hit, with the total value locked across chains declining by over 70%. The non-fungible token (NFT) market also saw a decrease in active users and market cap. However, layer-2 scaling solutions saw more growth than other areas of the market.

Mark Mobius Predicts Bitcoin Will Fall to $10k

Veteran investor Mark Mobius has warned that the price of Bitcoin could crash to $10,000, representing a more than 40% decline from current levels. Mobius, who co-founded Mobius Capital Partners, believes

that the cryptocurrency is "not far away" from $10,000 because it has broken through the technical support levels of $18,000 and $17,000. 

Bitcoin Will Fall to $10k

While he expects the price of Bitcoin to hover around its current level of $17,000, he thinks a move to $10,000 is possible in 2023. Mobius attributes his bearish stance on Bitcoin to rising interest rates and monetary policy from the US Federal Reserve. He says that higher interest rates make Bitcoin less attractive to hold or buy, as holding the cryptocurrency does not earn interest.

Is there any Light Ahead For Crypto? 

Yes, some factors indicate that the crypto market might recover in 2023. The cryptocurrency market has changed substantially over the past year, and new industries like GameFi, NFTfi, and Metaverse have drawn interest from the general public. For instance, it has been claimed that the GameFi sector raised around $2.9 billion during that time.

On September 15, many expected the Ethereum merger to be accomplished, ushering in a new age of staking-as-a-service in the cryptocurrency space. About 15 million ETH, or 12.56% of the entire ETH supply, had been staked as of October 2022 on the PoS chain. 

Huobi concluded the market performance section of the research by predicting that the cryptocurrency market might likely reach its bottom by the end of March 2023 by taking into account the 200-Week SMA indication, the Fed's rising interest rates, and deleveraging of riskier banking firms.

Source: Huobi Report

On the socioeconomic side, the U.S. Federal Reserve is anticipated to drop rates beginning in December 2022, most likely dramatically cutting inflation around March 2023, following four consecutive interest rate hikes of 75 basis points. Early in 2023, when monetary policy will have reached its lowest point, the cryptocurrency market may also do likewise.

Numerous financial firms with huge leverage were destroyed in the recent FTX meltdown. It is anticipated that the overall impact of the crash will last until the first quarter of 2023. The crypto market is anticipated to bottom out when BTC and ETH values trade around $15,000 and $1,000, accordingly, according to Huobi's specifications.

Bitcoin Price Prediction 2023

The price of bitcoin is roughly $16,800 towards the closing of the year 2022, falling from about $19,500 on the brink of the FTX turmoil. BTC has additional room to fall if the effects of FTX's collapse continue to spread. The well-known Bitcoin supporter Cathie Wood, CEO of Ark Invest, admits that FTX may drive significant financial firms to pull back from cryptocurrency shortly.

In a previous Bloomberg interview, Wood, who has maintained her Bitcoin price prediction of $1 million by 2030, said: "The one thing that will be delayed is potentially institutions pulling back and just saying, 'OK, do we truly understand this?'"

Another run downhill to the $10,000 level for BTC in 2023 may not be unreasonable given that global markets are suffering and crypto's credibility has been severely damaged by the disasters and controversies of 2022.

Analysts at JPMorgan Chase & Co. concur that the bottom is not yet here. With "a cascade of margin calls" occurring across the industry as a result of the latest happenings, the bank estimates that Bitcoin's floor will be around $13,000.

The cost of producing Bitcoin is another tool used by strategists to predict how low prices may go. The JPMorgan team wrote in a note that although the production cost currently stands at $15,000, it "is likely to revisit the $13,000 low seen over the summer months."

Conclusion

It is no longer possible to believe that the pre-pandemic disinflationary trend will return, as the world has entered into a global war economy. Every major power is now focusing on shoring up their security on all fronts, whether in terms of military power, supply-chain security, energy security, or financial security. These insecurities have been highlighted by the pandemic and Russia's invasion of Ukraine.