After hitting an all-time high of $69,000 last November, Bitcoin (BTC) has been in a general downtrend. BTC saw its worst start of the year this January, slumping more than 50%. At the time of writing, Bitcoin is trading at $40,457 following another decline this week largely led by macro economic issues.
Bitcoin has often found a way to defy downtrends since its inception, but experts are predicting that the leading cryptocurrency might slump further in the coming months and even beyond. Is there a prolonged bear market ahead for Bitcoin?
Bitcoin Headed to $10k in 2023 Says Analyst
Barry Bannister, Managing Director and Analyst at wealth management firm Stifel, is among those predicting a lengthy bear market for Bitcoin.
Highlighting several factors that can make that happen, the analyst believes we could see a $10,000 price for bitcoin in 2023. If that happens, it means that the digital asset will see a 76% drop from its current $40,457 price.
U.S. Fed Tightening Predicted to Hurt Bitcoin
Bannister stated that major factors including global money supply, the 10-Year U.S. Treasury yield, and the equity risk premium of the S&P 500 can influence the price of the digital asset.
He also noted that tough monetary policy in the form of higher interest rates by the Fed and shrinking of its balance sheet can cause the price of Bitcoin to crash. Spelling out how Fed monetary policy has affected BTC prices from the beginning of the year to date, Bannister said:
In 2022, we see bitcoin in a broad trading range bound by year-to-date intra-day levels, with greater downside risk in 2023 if the Fed continues to normalize policy in a ‘standard’ two-year tightening cycle.
It is noteworthy that Bannister’s previously bearish prediction for Bitcoin has so far failed to materialize. Last June, he predicted a bearish trend for digital assets, including a possible bitcoin drop to as low as $12,000 in the following months. BTC was trading at $34,000 as at the time, but surged remarkably in the aftermath to hit $69,000 just four months later.
Meanwhile, several strategists, analysts, and firms have also made a wide range of Bitcoin price predictions in the past, stating the time at which it will happen. However, most of the predictions have been way off the mark.
Your crypto deserves the best security. Get a Ledger hardware wallet for just $79!