For the past few weeks, several hypotheses have been circulating from different sources suggesting that the dollar price of Bitcoin in the coming months may rise.
There are three factors in place that suggest that this could also be the development over the medium term, although in reality there are no certainties about this at all.
The first factor affecting the dollar price of Bitcoin: halving
The first factor around which assumptions about a further rise in the price of BTC revolve is the expectation for halving.
In this case there is one certainty: at block number 840,000 halving will occur.
At the current rate at which blocks are being mined, block number 840,000 should be mined in April, so that is just over four months away.
The fact is that historically after all three previous halvings (2012, 2016, and 2020) a large speculative bubble then inflated the price of Bitcoin, leading it to make new all-time highs.
So many believe that even after the April halving, the price of BTC may surge.
There is actually no certainty about this, but since halving halves the creation of new BTC, and therefore also the supply on the market of Bitcoin from miners, in case demand instead remains stable or even increases an increase in the price is almost taken for granted.
It is possible that this dynamic is also already being priced in by the markets, although probably not quite yet.
The second factor: the end of the year
For purely fiscal reasons, annual highs or lows in the price of Bitcoin often occur at the end of the year.
In particular, those who are in profit may consider postponing sales by a few weeks so as to move taxes to be paid on any capital gains forward a year.
This tends to reduce Bitcoin sales as the end of the year approaches in case the price is high.
The year 2023 started with a price at only $16,500, but it has definitely risen since then.
First it moved back above $20,000, as early as January, and then from March it began a long lateralization above $25,000.
Beginning in late October, however, perhaps precisely because of the approaching end of the year it jumped above $35,000, and since then it has been lateralizing in that area, that is, near the annual highs made a few days ago.
Although as of today it is still 47% below the all-time highs of late 2021, it is already +124% since the beginning of the year.
Given that during last year’s big bear-market many may have sold, perhaps at a loss, it is possible that many current BTC holders are in profit, and are avoiding selling before the end of 2023 so as to shift tax payments on any profits by a year.
The third factor: ETFs
Most likely, however, the dominant dynamic right now is related to the approval of spot Bitcoin ETFs in the US.
Although many now consider such approval almost a foregone conclusion, it is not expected to come until late December or early January.
It should be noted that when it became known in June that BlackRock had filed such an application with the SEC, the price of Bitcoin in a few days jumped from $25,000 to $30,000, because BlackRock has a historical approval rate for its ETFs of over 99%.
Even in late August, when it became known that Grayscale had won its lawsuit against the SEC over the rejection of its application to issue an ETF on spot Bitcoin, the price had risen, and it is likely that the small bullrun in late October was also generated by the euphoria over the likely approval of ETFs.
Indeed, to be fair, there are many analysts who argue that the momentum of this third factor may not have ended yet.
In fact, all three factors are still in place, only the first is still some way from coming to fruition, while the second will expire within a little more than a month.
Instead, ETFs are not only pushing the price of Bitcoin until they are approved, but could push it even after that should they be successful in the market.
Bitcoin’s dollar price predictions
For these reasons, many analysts argue that Bitcoin’s price rise is not yet over.
In the short term, the key level is $38,000, which to date constitutes a kind of wall that has already repelled two recent assaults.
According to some analysts even this wall could fall by the end of the year, perhaps ending up pushing Bitcoin’s price above $40,000 as early as late November.
At that point the ascent could continue again, and bring the price of BTC above $45,000 in December or January.
Note that the dynamics of this late 2023 resemble those of late 2020, when the rise went on until mid-January 2021. Then again, those who do not sell in November and December are unlikely to do so in January if prices continue to rise. But then as soon as they give clear signs that they have ended the upward run, they sell.
The assumption, however, is that before halving there may be a further rise even to the $50,000 level.
#Bitcoin Pre Halving Rally
Each cycle #BTC had a rally before its halving occurs.
Those rallies topped within the 61.8%-78.6% fibonacci retracement area.
If Bitcoin were to rally pre halving again from here, its top could be located between $39k-$50k area. pic.twitter.com/Vd9MHuWNc1
— Titan of Crypto (@Washigorira) December 3, 2022
Although these are only hypotheses, and not certainties, they are inferred from past behavior, and therefore not without foundation. The granitic strength of the past is not enough to guarantee that future predictions will be correct, but if nothing else it forms a strong foundation.
We could probably already know by the end of November whether this dynamic is indeed underway, especially in the event that the $40,000 mark is not breached: then we would have certainty that this is not the dynamic underway.
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