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Gate.io Blog The crypto market forecast 2023

The crypto market forecast 2023

20 December 11:57

[//]:content-type-MARKDOWN-DONOT-DELETE
![](https://gimg2.gateimg.com/blog/1671586943491775731Thecryptomarketforecast2023_web.jpg)
🔹 The global crypto market is currently valued at $857.21B compared to the $2.9 trillion capitalization in November 2021.

🔹 According to JPMorgan,  the bottom price is around $13,000
If the Fed raises interest rates this December, the crypto market is set for new lows.

🔹 [Bitcoin](https://www.gate.io/trade/BTC_USDT) has pulled  76% from its ATL, indicating a trend of reduced volatility compared to other bear seasons.

🔹 [Bitcoin](https://www.gate.io/trade/BTC_USDT)'s halving history shows some signs of recovery in 2023.

## Introduction
The crypto market has been through much pain, gains, and turbulence in 2022. The largest cryptocurrency by market Capitalization started off with a continuation of a minor correction after hitting its all-time high of $68 789 in November 2021. However, several events have collided and sparked meltdowns, bankruptcies, and crashes in market prices.

Ethereum, the network with the largest utility in the crypto space,  also saw a massive drawdown and is now trading 74% below its all-time high in November 2021.

2021 saw the NFT & metaverse boom, but the severity of the nosedive among cryptocurrencies rippled over to these digital asset types. This is because these tokens and worlds are priced relative to cryptos or native tokens.

At the time of writing, the global crypto market is currently valued at $857.21B compared to the $2.9 trillion capitalization in November 2021.

## [Bitcoin price](https://www.gate.io/trade/BTC_USDT) pre-Halving view for 2023
The growth of [Bitcoin](https://www.gate.io/trade/BTC_USDT), the largest cryptocurrency by market capitalization, is often used to predict the growth of the entire market due to its large market dominance. At the time of writing, it constitutes 35.5% of the entire market.

Although there are various macroeconomics impacts on the entire space, the [Bitcoin](https://www.gate.io/trade/BTC_USDT) chart can also inform us of the potential realistic performance of the crypto market.

In the [Bitcoin](https://www.gate.io/trade/BTC_USDT) short-term price projection, The asset shows no sign of strength in the monthly time frame. [Bitcoin](https://www.gate.io/trade/BTC_USDT) is currently trading at $17,164, and the market sentiment may take a dive into the support at $13,000 or the order block at the 10k zone.

According to JPMorgan,  the bottom price is around $13,000, with “a cascade of margin calls.”

![](https://gimg2.gateimg.com/image/article/1671508316111.png)

In the long-term chart, considering the upcoming [Bitcoin](https://www.gate.io/trade/BTC_USDT) halving, [Bitcoin](https://www.gate.io/trade/BTC_USDT) is showing a recovery sign as the market might follow the same pattern that follows the event. According to the chart below, we can see an offset to the right of the bear market bottom, and the right side of the bull market tops relative to the [Bitcoin](https://www.gate.io/trade/BTC_USDT) halving. This pattern helps us see that the bear market always bottom-out between the year before and after the halving.

[Bitcoin](https://www.gate.io/trade/BTC_USDT) is currently sitting close to the end of this (4-year/ over 65% done) circle, and the year 2023 is on track to repeat the pre-halving bear market recovery.

The price history also showed that the pre-halving bear market drawdown from the all-time high was roughly  94%, 87%, and 84% for the first, second, and third halving, respectively. And at the time of writing, the [Bitcoin price](https://www.gate.io/trade/BTC_USDT) has already been pulled around 76%, indicating a trend of reduced volatility and the end of the bear market.

With these landmarks in view, if [Bitcoin](https://www.gate.io/trade/BTC_USDT) bottoms at the $13000 to $12000 zone, it still follows this trend, and we may see a recovery in 3 to 6 months.

![](https://gimg2.gateimg.com/image/article/1671508504222.png)[Bitcoin](https://www.gate.io/trade/BTC_USDT)<center>halving rallies- Pantera</center>

The Macroeconomics impact & view give some hints.

Even though the price chart of [Bitcoin](https://www.gate.io/trade/BTC_USDT) shows some recovery signs against 2023, this winter might last longer than the above analytics says.

This is due to the impact of macroeconomic factors: rising borrowing costs, the 40-year inflation highs, impact of the Russia-Ukraine war.

In response to the overwhelming impact of these macroeconomics, the Fed has continuously hiked interest rates. Although Powell has hinted at a slow-down of these hikes, there’s still an enormous clean-up to be done.

If these hikes continue, the crypto & and the stock market will keep seeing deadly wiping away of liquidity.

“Most Wall Street firms expect the U.S. economy to go into recession sometime in 2023. Many believe forecasts for 2023 earnings have more room to get cut, and some believe those downward revisions mean lots of volatility for stocks in the early part of 2023.”- Yahoo finance.

On the contrary, if The federal reserve continues to slow down the interest rate as indicated in December, we could head for a return into the bull market in 2023. Below is the correlation between [Bitcoin price](https://www.gate.io/trade/BTC_USDT) & the US inflation rate.

![](https://gimg2.gateimg.com/image/article/1671508572333.png)<center>BTC/ US interest rate correlation</center>

## The DeFi space outlook for 2023

Just like [Bitcoin](https://www.gate.io/trade/BTC_USDT), Ethereum has had its fair share of market turbulence. Although this calls for a slowdown in how investors pour money into the DeFi & NFT space, some investors are still confident that Ethereum will outperform [Bitcoin](https://www.gate.io/trade/BTC_USDT) in scalability and adoption.

Despite the downtrend, there has been ”…significant interest in Web3, with investments set to exceed $27 billion. Projects built on Layer-1, zero-knowledge roll-ups, and middleware received the most funds.”-Huobi Research.

In September, Ethereum completed the long-awaited merge and is on its way to implementing other scalability upgrades to foster more adoption among emerging competitors.

## Regulation is inevitable in 2023

Following the failure of Terra LUNA, Celsius, BlockFi & FTX, there have been serious concerns with trust-based solutions and Algorithmic stablecoins. It has also called for tightened scrutiny & transparency among CEXs and DeFi solutions. President Joe Biden and some G20 countries are looking into a thorough regulatory framework for Digital assets. With this in mind, many projects with low utility and transparency may fade out of the system by the end of 2023.

## Conclusion
The Financial markets have seen a long bull market from 2009 to late 2021, only briefly interrupted by the Covid-19 pandemic recession in early 2020. However, stocks and crypto have suffered harsh conditions in 2022, mainly to political instability, massive liquidity crunches, and rising interest rates.

If we see more Easing of inflation and falling rates, the crypto industry might be on its way to new all-time highs.

Author:** M. Olatunji**, Gate.io Researcher
· This article represents only the views of the observers and does not constitute any investment suggestions.
· Gate.io reserves all rights to this article. Reposting of the article will be permitted, provided Gate.io is referenced. In all other cases, legal action will be taken due to copyright infringement.

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