February 2, 2023

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Bitwise predicts bitcoin sideways movement ahead of 2023 recovery from CoinEdition

©Reuters. Bitwise predicts Bitcoin to move sideways ahead of 2023 recovery Bitwise predicts that the current downtrend will recover in 2023. Current bitcoin behavior is consistent with historical price action patterns. The merger, the rise of Layer 2 solutions and the emergence of new applications will support the next upward trend.

A Bitwise analysis has predicted that Bitcoin will recover from the protracted downtrend. This time the recovery is projecting another dimension, different from the usual pattern we have seen in previous cycles.

Bitwise’s prediction is based on historical behavior of Bitcoin. There has been a pattern since 2011, when Bitcoin rose to prominence. A chart in the report shows that each Bitcoin cycle lasts four years, with the fourth year including a pullback.

The figurative expression suggests that 2022 fits perfectly into Bitcoin’s pullback year, implying that prices will rise again in 2023 as shown below;

To support this recovery, Bitwise noted that the impact of industrial developments like Ethereum Merge will be reflected this year. Other factors such as the rise of Layer 2 solutions and the litany of newly developed applications will fuel an uptrend for the crypto market.

Bitwise predicts a different approach to expected recovery. Instead of the usual V-shaped price movement, the company forecasts that prices will move in a U-shaped pattern. This means there will be sideways movement before the rally begins.

Factors that have been identified to change the pattern include the various challenges facing the industry in 2022. Setbacks like the FTX debacle and other crypto lending challenges have shaken investor confidence over the past year. The threat of regulation and broken banking relationships were cited as factors that would make investors skeptical.

The planned release of 127,000 bitcoins as part of the Mt. Gox settlement is another issue Bitcoin is facing. It is an event that could shake market momentum. Additionally, the existing plight in the bitcoin mining industry, a fallout from China’s crackdown on crypto, continues to loom.

These elements helped form the opinion that the bitcoin price is likely to move sideways with the possibility of another drop before finally recovering. However, Bitwise believes Bitcoin will recover. Based on history, this suggests that the upcoming recovery could be the largest the industry has seen yet. Perhaps a new all-time high will be the icing on the cake when that happens.

Bitwise predicts bitcoin sideways movement ahead of 2023 rebound appeared first on Coin Edition.

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