How Should Investors Interpret Factors That Could Precipitate A Bitcoin Crash in 2023? – Cryptopolitan

The cryptocurrency market has always been unpredictable, and Bitcoin, as the pack’s leader, is no exception. Bitcoin’s value has fluctuated wildly over the past few years, causing many investors to question whether the cryptocurrency will rise again in 2023. In this article, we will examine the factors that could influence Bitcoin’s price in 2023 and try to answer whether Bitcoin will crash again in 2023.

Bitcoin’s historical crashes over the years

Bitcoin has had several crashes in its history. Here are some of the biggest crashes:

1. June to November 2011, -93%: Bitcoin’s first major crash happened in 2011 when Bitcoin went from $29 down to $2. Such a dramatic crash (93%) has not happened since. The primary reason for this epic crash was the hacking of Mt. Gox, the dominant centralized crypto exchange in crypto’s early days.

2. August 2015, -80%: Bitcoin’s second crash happened in 2015 when Bitcoin went from $1000 to $200. The reason for this crash was the collapse of Mt. Gox, which handled over 70% of Bitcoin transactions at the time.

3. April 2017, -84%: Bitcoin’s third crash happened in 2018 when Bitcoin went from $20,000 to $3,200. The 2018 crypto winter kicked off when the Coincheck exchange suffered a $530 million hack, and later Google and Meta banned token sale offering advertisements.

4. December 2021, -55%: Bitcoin’s fourth crash happened in 2021 when Bitcoin went from $63,000 to $29,000. The reason for this crash was the Chinese government’s crackdown on Bitcoin mining and FUD allegations of its impact on the environment.

5. December 2022, -65%: Bitcoin’s fifth crash happened in 2022 when Bitcoin went from $68,000 to $22,000. The reason for this crash is the ongoing crypto winter exacerbated by the Terra Luna crash.

What factors could cause a Bitcoin price crash?

Here are some factors that could cause Bitcoin to crash:

• Profit-taking: Profit-taking is simply the practice of selling after a cryptocurrency has gone through a price increase. When many investors sell their cryptocurrency holdings, the price can drop rapidly.  Because the supply of cryptocurrency increases while the demand for it decreases.

• Break below support: A support level is a price level at which a cryptocurrency has historically had difficulty falling below. When a cryptocurrency breaks past a support level, it can signify a downtrend. Crypto breaking below support can cause investors to sell their holdings, leading to a further decline in the cryptocurrency price.

• Systemic issues: Systemic issues within crypto, such as the collapse of FTX, can cause a cryptocurrency to crash. When a major player in the crypto space experiences a significant problem, it can cause investors to lose confidence in the entire crypto market, leading to a sell-off of cryptocurrencies, which can cause the price to decline.

• Interest rates: Macroeconomic factors, such as interest rates, can cause a cryptocurrency to crash. When interest rates rise, it can cause investors to move their money out of riskier assets such as cryptocurrencies and into safer investments such as bonds. This move can lead to a sell-off of cryptocurrencies, which can cause the price of the cryptocurrencies to decline.

• Margin debt: Margin debt is money borrowed with interest from a brokerage to purchase or short-sell securities. When investors take on too much margin debt, it can cause a sell-off of cryptocurrencies, which can cause the price of the cryptocurrencies to decline.

• Too much leverage: Crypto investors taking too much leverage can cause a cryptocurrency to crash. When investors take on too much leverage, it can cause a sell-off of cryptocurrencies, which can cause the price of the cryptocurrencies to decline.

• Regulatory crackdowns: Regulations could cause Bitcoin to crash in several ways. For instance, fear of regulation can incredibly damage the Bitcoin market. Every year, there is always a fear that the government will step in and attempt to regulate Bitcoin.

Bitcoin price performance in 2023

Bitcoin has been experiencing significant growth in 2023, despite its market capitalization dropping from around $902 billion in January 2022 to over $480 billion in March 2023. 

According to Glassnode, the total supply by holders has reached a new ATH of 13.62 million 

BTC. Therefore, a steady rise in volumes could push the bitcoin price prediction for 2023 to $43,959.19. 

In contrast, the price of the star crypto could sink to a low of $23,218.00. Successively, a balance in trade activities could settle the price at $31,243.04.

Bitcoin price prediction in 2024 and beyond

Bitcoin expects to have substantial price increases in the coming years. In 2024, the Bitcoin price could reach up to $34,916.12, according to recent analyst estimates.

The demand and supply will increase as more people become aware of and invest in Bitcoin. As a result, they lead to an inflated price in the coming years as more people try to capitalize on 

Bitcoin’s potential for future gains.

In 2026, Bitcoin could continue to surge as more people adopt cryptocurrency. As a result, the price of Bitcoin could reach up to $117,424.89 in 2026, according to our analysis. The rise would be an incredible 400% increase from its current value.

In 2030, the price of Bitcoin could reach a whopping $555,511.36 if the current trend continues. The bull run would be an astonishing 2300% increase from its current price.

How should investors approach Bitcoin in 2023?

The current Bitcoin market is volatile and unpredictable, so investors should approach it cautiously. Although there is potential for huge gains, significant losses are also possible. 

Therefore, before investing in Bitcoin, investors should research the cryptocurrency thoroughly and develop an understanding of its underlying technology. 

Investors should also consider their risk tolerance levels before making investment decisions.

Diversifying investments across different asset classes, such as stocks, bonds, cash, and cryptocurrencies, is also essential. Investing in multiple assets can reduce the risk of investing in any asset class. In addition, a well-diversified portfolio can provide better returns over the long term. 

Investors should always prepare to manage their investments and be aware of market movements.

Will Bitcoin crash in 2023?

It is impossible to predict the Bitcoin crash in 2023. However, the market could be subject to sudden fluctuations due to government action or market sentiment. Therefore, investors should always know these potential risks and prepare accordingly.

Conclusion

Bitcoin has experienced an incredible journey in the past few years, and its price could continue rising in 2023, 2024, and beyond. However, there is no guarantee that Bitcoin’s price will increase over time, as many potential risks are associated with investing in cryptocurrencies.

Therefore, investors must know these potential risks and take precautionary steps to protect their investments. It is also essential for investors to research Bitcoin thoroughly and understand its underlying technology before making any investment decisions. With the right strategies, understanding, and risk management techniques, investors can capitalize on the potential of Bitcoin in 2023 and beyond.