Bitcoin is back to its crab-like price action as macroeconomic forces battle with new developments in the crypto industry. The number one crypto by market cap has had one of its bloodiest years, but maintains a positive outlook for 2023.
At the time of writing, Bitcoin (BTC) is trading at $16,800 with sideways movement over the last 24 hours. On higher time frames, the cryptocurrency is recording some losses as it was rejected from the 50-Day Simple Moving Average (SMA) at around $17,800.
Bitcoin will see better days in 2023
According to a recent report from Coinbase, Bitcoin has been resilient in the current market turmoil. Despite rising interest rates from the US Federal Reserve (Fed), a high inflation environment and the collapse of major companies in the crypto ecosystem, BTC:
(…) remains one of the primary reserve currencies of the crypto economy. This became apparent several times during the year as over-leveraged players across the entire market – CeFi borrowers, hedge funds and venture capital (VC) funds – became forced sellers.
Bitcoin’s ability to withstand the collapse of these companies and entities, including some of the largest BTC miners, indicates its “long-term success”. Regardless of these events, Coinbase claims that BTC continued to see increasing adoption and traction in 2022.
Bitcoin outperformed some of the world’s major currencies across the macroeconomic landscape. As shown in the chart below, BTC price outperformed the Euro (EUR) and Japanese Yen (JPY) in 2022.
This performance reinforces BTC’s long-term bullish thesis and its vital role as a global asset, according to the report:
(…) the value proposition for bitcoin has only strengthened this year as sovereign currencies around the world show signs of stress and central banks continue to struggle with policy credibility.
BTC Reaches Critical Milestone
By comparing BTC’s current price performance and fundamentals, Coinbase determined that many Bitcoin holders are losing money. About 50% of BTC investors are in the red, which could provide a solid foundation for a bottom in the macro market.
In previous bear markets, this percentage reached an average of 53% of Bitcoin holders at a loss. In this sense, BTC and the crypto market could be moving towards a “tipping point,” the report said:
These represent key inflection points for BTC performance ahead of subsequent periods of price appreciation. We believe this metric provides important insights into current cycle positioning.