Uncertain forecasting for the price of Bitcoin

These days there is conflicting forecasting about the possible price of Bitcoin.

However, a distinction must be made between short-term forecasts, medium-term forecasts, and long-term forecasts.

Bitcoin price: short-term forecasting

In the short term, forecasting the evolution of Bitcoin’s price is decidedly conflicting.

Although sentiment at the moment seems to be decidedly positive, with the Fear & Greed Index even passing into the greed zone (i.e., enthusiasm and greed), there are still many who expect a retracement, or who argue that the crypto winter is not yet over.

The point is that in this first quarter of 2023, BTC’s price performance has been decidedly good, perhaps even too good.

Compared to the close of the previous quarter, at the end of December 2022, the gain was almost 70%, which is quite abnormal after a bear market like that of last year.

In particular, there were two moments of real euphoria, one around mid-January, with +22% in five days, and one around mid-March, with +36% in one week.

While after the first spike, with the price rising to around $23,000, many argued that it was a rebound from the 2022 lows, after the second one speculation of a possible retracement began to spread.

It is worth mentioning that the key level at this time seems to be $29,000, which was exceeded only for a very brief moment yesterday. In fact this was the level above which the price of Bitcoin fluctuated in late May 2022 after the implosion of the Terra/Luna ecosystem but before the failure of Celsius.

Indeed, in addition to those who argue that a retracement is looming, there are instead those who argue that the next target is a return above $30,000.

Thus there is no agreement among the various analysts, such that the current moment can still be described as one of uncertainty, despite the clearly positive sentiment.

It is worth noting that the assumption that the crypto winter is not yet over is entirely plausible, because although the bear market of 2022 is now behind us, the current price level is still lower than it was before the implosion of Terra.

However, there are tentative signs that a return to the $30,000 level is possible, so it is not possible to say that there is a clear majority of analysts assuming a retracement.

Finally, it is worth noting that in recent times several spikes have occurred during weekends, that is, when traditional stock exchanges are closed. Most likely, the key moment to understand whether the price of Bitcoin really has the strength to rise back up to the $30,000 mark will be the weekend, or at most the very first days of next week.

Medium-term forecasting

As far as medium-term forecasting is concerned, and in particular that concerning the evolution of Bitcoin’s price throughout 2023, there are two hypotheses that have been circulating for several days now.

The first argues that over the course of the year it might be able to rise as high as $35,000, while the second even ventures that a return even above $40,000 is possible.

However, in both cases these are not predictions that claim that the price of BTC during the course of 2023 is destined to rise, and then stay high, but only assumptions that at some point during the course of the year those heights may be reached.

Indeed, it appears to be a fairly widely held view that 2023 could be an interlocutory year, ahead of the next halving that will not occur until the spring of 2024.

In the event that it indeed turns out to be an interlocutory year, the price of BTC could fluctuate within a band whose maximum level could be between $30,000 and $40,000, but the minimum level could also be $20,000 or less.

It is worth noting that in the past, once the bottom was touched during the bear market, the price did not fall back to those levels. However, the bottom of the bear market in 2022 was $15,500, so compared to current values the potential for descent is quite large.

It remains particularly difficult to make forecasts for the medium term, because the future may hold several unforeseen events that can also heavily influence the price trend of BTC.

An overview of the long term

Naturally, it is even more difficult to make long-term forecasts, but at least in this case there is one certainty: the halving of spring 2024.

There have already been three halvings in the past (2012, 2016, and 2020), and in all cases a speculative bubble inflated the following year. However, the size in proportion of the three bubbles has been declining over time, with the one in 2013 being so sensational as to seem absurd, the one in 2017 being truly remarkable but no longer so sensational, and the one in 2020 being significantly smaller than the previous two.

Doubts are looming over the long-term forecast

Indeed, the price of Bitcoin tends to be influenced by the monetary policies of the major central banks, and in particular the Fed. The key point is the positive reaction of BTC’s market value to very expansionary monetary policies.

This means that in the event that the Fed launches another campaign of creating and placing large quantities of dollars into the markets, the price of Bitcoin could react even more than expected, or than it has in the past.

Monetary policies of central banks are uncertain, arbitrary, and unpredictable, so it cannot be ruled out a priori that in the future they may end up pumping up the price of Bitcoin even more than to date.

The result is that, as of today, it is almost impossible to guess how far the price of BTC might go in the future, unless we guess by sheer luck.