Will BTC repeat its 300% halving pump in 2023?

Bitcoin halving is coming closer. It is a historical moment when BTC is expected to raise. However, the macro conditions may affect demand for risk assets

Bitcoin, halving, macro economy, personal savings rate

Written by

Kevin Lopez
Published on

January 12, 2023

Key points:

  • With the next halving in 2024, the next 12 months should see a price floor, followed by a rally as the event approaches.
  • This is the most profitable time to accumulate Bitcoin. Net unrealized gain/loss is still in deep capitulation horror.
  • Given the current macroeconomic environment, it may take a lot of luck to rise from the ashes amid depressed crypto asset prices.
  • The personal saving rate in America just fell to 2.2%. This means Americans are running out of money. The last time it was this low was 2006-07. Right before GFC (global financial crisis). 

Bitcoin is facing a "bottom candle" in 2023, but BTC's price action is still enough to surprise the market.

In a Jan. 11 tweet, popular trader and analyst Rekt Capital predicted that BTC/USD could see “decent upside potential” this year.

The chart hints at significant Bitcoin growth potential with

Rekt Capital analyzed Bitcoin’s four-year market cycle before and after the block subsidy halving, drawing attention to 2023 as the deadline for the next “floor candle.”

With the next halving in 2024, the next 12 months should see a price floor, followed by a rally as the event approaches.

2024 is the fourth candle in Bitcoin's current cycle, and 2023 is the third candle.

“Candle 3 is the bottom candle in BTC’s four-year cycle. But it can still generate decent upside potential,” Rekt Capital commented.

The range in which Bitcoin has surprised traders is clearly visible on the four-year cycle chart.

“The 2015 Candle 3 recorded a +234% move. The 2019 Candle 3 is up 316%,” he continued.

“Candle 3 in 2023 may see stronger upside than most think.”

BTC/USD annotated chart. Source - Rekt Capital [Twitter]BTC/USD annotated chart. Source - Rekt Capital [Twitter]

Certain other on-chain observations lead market participants to similarly optimistic conclusions.

Among them, the proportion of unrealized losses of Bitcoin holders is still in the "surrender stage", according to a dedicated indicator that monitors the current situation.

“This is the most profitable time to accumulate Bitcoin. Net unrealized gain/loss still in deep capitulation horror,” trading and analytics account Game of Trades wrote on Twitter on Jan. 11.

BTC net unrealized profit/loss ratio annotated chart. Source - Games of Trades [Twitter]BTC net unrealized profit/loss ratio annotated chart. Source - Games of Trades [Twitter]

The incoming macro climate of 2023 echoes the effects of GFC, foreseer predicts.

However, given the current macroeconomic environment, it may take a lot of luck to rise from the ashes amid depressed crypto asset prices.

With the Fed still raising rates as inflation slows, concerns now focus on the longer-term policy implications.

Analysts such as Nick Gerli, founder and chief executive of Reventure Consulting, said it wasn't inflation but deflation that could hit sentiment next.

Commenting on a chart of U.S. savings trends on Jan. 10, Gurley warned that conditions are ripe for a repeat of the 2008 global financial crisis (GFC) in terms of recession.

"The savings rate just fell to 2.2%, the lowest it's ever been," he revealed.

“Means Americans are running out of money. Last time it was this low was 2006-07. Right before GFC. Major Recession Warning. Expect a big decline in consumer spending in 2023.”

U.S. personal savings rate annotated chart. Source - Nick Gerli [Twitter]U.S. personal savings rate annotated chart. Source - Nick Gerli [Twitter]

On January 12, the US will release its first CPI (data release for 2023), and there are already bets on how Bitcoin will react.


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