Central banks and inflation remain at the forefront as the new year begins

The first week of 2023 for Bitcoin is uninspiring as neither volatility nor traders are present. BTC price action is still stuck in a constrained range after remaining static over the holiday break between Christmas and New Year’s. Although 2022 was arguably a classic bear market year for Bitcoin, with annual losses of almost 65%, few people are currently actively forecasting a recovery. For the typical hodler, who is looking for macro triggers from the US Federal Reserve and economic policy effects on dollar strength, the situation is complicated.

Despite corrective policies undoing extravagant generosity and an unending stream of bad news, the S&P is only down about 18%. The Fed is attempting to contain inflation by stifling demand in the face of unprecedented recent monetary stimulus, unprecedented and ongoing fiscal stimulus, and significantly constrained supply chains as a result of COVID, global government policies, overdependence on China, etc.

Bitcoin’s Weekly Death Cross:

Despite the challenging start to the year that Bitcoin is facing, we think that in the coming months’ Bitcoin might reach an all-time low and start its next recovery phase followed by an upward phase. Thus, before a genuine crypto rally begins in earnest, I’d anticipate a lot of sideways movement.

According to the weekly chart, the 50-day moving average may cross below the 200-day moving average for the first time in Bitcoin’s history. If Bitcoin’s price stays at these or lower levels over the coming weeks, this might occur. All of this is in line with predictions that Bitcoin should reach a final bottom at around $10,000 to $15,000, or a range therein. All of this should be taken with a huge grain of salt, and past performances is no guarantee of future returns.

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