Bitcoin's Bullish Rebound
Can Bitcoin hit $40,000 in 2023?
Today I want to provide a quick update on bitcoin’s price action.
On January 21, 2023, I published a post making the case for a major confirmed bottom in the price of bitcoin. Those who did not read this post can find it linked directly below:
Everything written and said in the January piece continues to be true. Sentiment is still negative, price is climbing a wall of worry and technically sound, the fundamentals of the network have never been better, etc.
Figure 1 shows a post I put up yesterday, June 20, 2023, for LinkedIn subscribers alerting them to the current, bullish look of the Bitcoin weekly chart. The chart shows a breakout of a major head and shoulders bottom and a slow, low volume retest of support, forming a bullish falling wedge. In English, this is a bullish chart that hints at accumulation and provides a price target in the $40,000 range.
Fast forward to today and the breakout of the bullish falling wedge has taken place. I didn’t think it would happen this fast, but improving sentiment around the BlackRock ETF submission, as well as a potential win for Grayscale in its lawsuit against the SEC, is overwhelming a supply constrained market. We’re also seeing Citadel, Fidelity, and Charles Schwab join forces to launch a noncustodial bitcoin exchange. In other words, the asset is going mainstream.
Figure 2 below shows the bullish breakout occurring today.
A Friday close at or above current levels would confirm the bullish action and increase the probability of a move back towards the $40,000 level by the end of 2023.
As I mentioned in the LinkedIn post, this is NOT bearish price action and combined with the negative sentiment surrounding the SEC’s war against cryptocurrency there is fuel for a substantial move to the upside.
Remember, both the CFTC and SEC agree that bitcoin is a commodity, not a security. While the vast majority of “crypto” remains at risk of legal action, bitcoin is not a part of that group.
If you have not read the post from January, “Has Bitcoin Bottomed?”, I highly encourage you to take a few minutes and check it out.
Here is an update to two of the charts from my January post, one on valuation and another related to the network’s fundamentals.
Figure 3 shows that bitcoin remains near the lower end of its historical valuation range.
Figure 4 shows bitcoin’s network hash rate continues to hit new all-time highs, supporting a potential increase in the value of the system.
It’ll be interesting to see how this story and the price action evolves throughout the rest of the year.
— Brant
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