By After a tumultuous 2022 tarnished by the collapse of industry giant FTX, Bitcoin 2023 has been a rollercoaster recovery, yet, with Bitcoin (BTC) now stood atop a +160% gain year-to-date, lets take a deep-dive into how BTC price got here.
January Rally: Slowing Inflation Triggered Desperate Bitcoin Recovery
The middle of January saw Bitcoin spring back into life after a seismic collapse before Christmas triggered a major downtick that saw BTC price drop as low as $15,499.
Macro-economic factors appeared to be the main driving force in January’s recovery, with traders shifting to bullish posturing after indications of a slow-down in US inflation from the Fed bolstered markets worldwide.
While macro-hopes of a rates cut failed to materialise, the shift in market sentiment was enough to trigger major upside across 2023 – with crypto assets under management exploding +36.7% throughout the month.
February’s Dramatic Mid-Month Drop: US Regulators Spook Crypto Markets
Despite the strong bounce in January 2023, subsequent price action saw a major -22.4% drop in Bitcoin price mid-month.
The move was triggered by increased rhetorical attacks and regulatory moves against the crypto industry by American regulators.
Notably, the Gary Gensler’s SEC mounted worrying regulatory crackdowns against Kraken Exchange and stablecoin issuer Paxos – in a move that sent shockwaves through markets.
However, bullish sentiment in Asia, notably in Hong Kong reassured global markets – fuelling a recovery from these dramatic drops.
April’s Bitcoin Resistance Rejection: How $30K Formed a Key Price Level
As Bitcoin price pushed up following Gensler’s regulatory crackdown, the leading cryptocurrency mounted a solid recovery.
This saw BTC price hammer-up for a vital test of topside resistance at $30,000.
However, a resounding market rejection at these price levels triggered another tumble, which saw Bitcoin price drop -17%, yet, price was still able to recover to end the month in the green.
May’s First Monthly Bitcoin Price Drop of 2023: -8% MoM Performance Dominates Charts
Despite a bullish start to 2023, May saw Bitcoin’s first month-on-month drop of 2023, with price ultimately left trading at a -8% loss across the month.
A duality of factors came together to trigger this negative price action, which saw crypto markets retreat from a market cap emboldened by breakout Chinese and AI narratives.
Driving factors for the May BTC price drop include diminishing liquidity in crypto markets (fuelled by sell-offs under $27,500) and a market reaction to monetary tightening moves by the US Fed.
June’s Major Short-Squeeze Triggered Breakout Bitcoin Price Rally
With May’s performance lacking, June once again saw Bitcoin 2023 resume rallying posture as price surged 28% over the following weeks.
This appears to have been triggered by a major short-squeeze, mounted against over-leveraged open interest that piled into the chart around $24,800.
Traders positioned to short a further drop were left reeling from $36.6m in short liquidations.
July Resistance Triggers Major Drop As $30K Resistance Continues to Dominate Charts
Following June’s aggressive short-squeeze, Bitcoin price hammered-up high into the trading channel in July in a move that saw Bitcoin price attempt to breakout above $30k.
Peaking at $31,842 on July 15, near immediate market rejection saw Bitcoin enter a major downside tumble – with BTC price losing -8.8% across the month – ending back below $30k resistance at $29,080 (in the red).
Critically in July, Bitcoin began to become insulated from macro-economic factors.
Max Pain in August 2023: Why Did Bitcoin Price Drop So Dramatically?
August saw Bitcoin 2023 end the month at the lowest level since July, in a major downside move – which was fuelled by dramatic -$2,000 losses in price on August 17-18.
While Bitcoin was not alone in August downside, as TradFi markets also hit a slump, the serious volatility witnessed by the top cryptocurrency appears to have been pushed by the release of damning CME data.
The Bitcoin price drop came just days after the U.S. Commodity and Futures Trading Commission’s (CFTC) Commitment of Traders (COT) report showed leveraged funds (hedge funds and commodity trading) – ramped up bearish bets in the CME-listed cash-settled bitcoin futures in the week ended Aug. 8.
This was timed with CoinBase launching Bitcoin Futures trading for US customers.
September’s Bitcoin Bounce-Back: BTC Finds Feet Above $25,000
As traders returned to their desks after a volatile summer, Bitcoin found feet after a resounding test of lower support at $25,000 on September 11.
The downtick to test $25,000 was triggered by anticipation that FTX crypto assets would be imminently dumped onto the market, however, these fears failed to materialise.
Yet, touching lower support at $25,000 triggered a bounce within the trading channel, that fuelled price on an impressive +12.1% push to touch resistance from the 200DMA around $28,000 on September 30.
This came in spite of overhead comments and concerns from the SEC.
October Saw Bitcoin Spot ETF Fever Take Hold In BTC Markets
Following the substantial recovery in September, Bitcoin price went on to mount a +27% surge month-on-month that critically saw Bitcoin hammer above $30,000 in a titanic +14.5% daily price move on October 23.
This can be explained by the onset of Bitcoin Spot ETF fever, as traders began to panic and FOMO into the leading cryptocurrency following a Court decision which over-ruled the SEC’s previous move to reject GBTC’s conversion into a Bitcoin Spot ETF.
December Sets Stage for Major Bitcoin Bullrun in 2024
After three-solid quarters (Q1-Q3) of price stabilization, Winter’s breakout rally hit rocket volatility with the onset of December.
The first week of December saw Bitcoin price explode a whopping +18.35%, leaving BTC price trading high at $44,694 a week later – Bitcoin 2023’s high.
With Bitcoin now sat atop +160% YTD gains, markets appear poised in preparation for a highly-anticipated final decision on Bitcoin Spot ETF applications, and the upcoming Bitcoin halving event – estimated for April 16, 2023.
Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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