$47,000 Bitcoin is Not Out of the Question in 2023

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  • Bitcoin is ending the year strongly, with many expecting higher targets
  • This is a typical bear market rally, so we must be wary of the end approaching
  • Why is $47,000 an ideal level and what would happen next?

Bitcoin has been on a tear for the last month or so as if it wants to put on a show for the first anniversary of the latest event that was supposed to have killed it. Bear market rallies are tricky things to navigate, however, and we all know that Bitcoin doesn’t go up forever. With this being the case, $47,000 looks like a natural stopping point for Bitcoin, at least in the short term, and for a very good reason.

Bitcoin Low Looks In

The first thing to look at is the situation with regard to the lows. Bitcoin dropped to $15,000 around this time last year following the FTX crisis, which looks to have been the capitulation that Bitcoin experienced in November and December 2018 when the price dropped 50% in a short space of time. Since then the price has rallied 133%, finally surpassing a key level of resistance on the way:

btc 1

It looks for all the world that the lows of this bear market are already in, with the pattern from 2019 potentially repeating. Back then it was the ‘China adopting blockchain’ narrative that drove the recovery, whereas this time we have the Bitcoin ETF narrative is driving price.

The question is then, where will it stop? To help answer this we can look at another aspect of the chart from 2019:

btc 2

As we can see, Bitcoin topped out at around $12,000, exactly at the point where the first bounce rejected after the bull run topped out in 2017. This line acted as resistance in 2018, 2019, and again in 2020, until it was finally cracked in October that year which set in motion the gargantuan rise to $65,000 seven months later.

If we expect the same thing to happen again, the area of resistance we are interested in is $47,000, at which point we can expect a cooling off in the market, especially as a Bitcoin ETF will likely have been approved by that point, which is the only catalyst driving price forward at the moment.

What Next?

What can we expect if we do reach $47,000? Here’s our prediction, based on the last cycle:

btc 3

Assuming Bitcoin hits $47,000 this year we can expect the first half of next year, which takes in the halving, to be the cooling-off period which could see a return to test that prior resistance at $32,000 before turning it into support for the start of the big run-up into 2025.

Of course, if Bitcoin falls back through that $32,000 support without a good reason (i.e. the COVID dump in 2020) then all bets are off and we might as well go home.