Bitcoin is down nearly 60% YTD as FUD overtakes the entire crypto industry. The 2021 crypto bull run sent Bitcoin to an all-time high of nearly $70,000 but now things have changed for the worse.
Many crypto investors believe Bitcoin could crash to as low as $14,500 if Bitcoin follows the historical trend of crashing 80% from its all-time high. The good news is that Bitcoin could bottom at the beginning of Q1 2023 if the world’s largest cryptocurrency follows the Bitcoin halving cycle.
When Will Bitcoin Hit Bottom?
Bitcoin could hit a bottom in January 2023 when BTC reaches the block height # 770,000. Over the last 3 Bitcoin halving cycles, BTC has bottomed at the end of the 2nd period during the 4-year halving period.
For those new to Bitcoin, BTC goes through a halving event every 4 years that cuts the mineable supply of Bitcoin in half. Bitcoin founder Satoshi Nakamoto build the halving cycle into Bitcoin’s source code to make it rare over time by decreasing BTC’s inflation rate.
The Bitcoin halving cycle is made up of 3 separate but distinct periods lasting 70,000 blocks or approximately 486 days (~16 months):
- Bullish runup after halving event
- Bearish 80% crash in the price
- Recovery and price runup as the next halving event approaches
Here’s a graph that shows how Bitcoin’s price moves during the previous 3 halving events.
If history repeats itself then Bitcoin will bottom approximately on January 9th, 2023 because that’s when Bitcoin reaches block # 770,000.
What Price Will Bitcoin Bottom Out At?
Bitcoin also drops around 80% during each 2nd-period crash so BTC may trade around $14,000 once the price bottoms out. This makes sense because the Fed is planning 2 more interest rate hikes in November 2022 and December 2022.
Bitcoin’s price has fallen after each rate hike in 2022 because it makes borrowing money to buy Bitcoin much more expensive.
Two more interest rate hikes could trigger 1 or 2 more selloffs before Bitcoin bottoms out in January just below $15,000. This is what I’ve gathered from doing hours of research on price movements during crypto bear markets.
Bitcoin may bottom out by January 2023 so now is a good time to save up cash and buy the dip. Crypto trades in cycles so don’t be afraid of bearish price movements. Nothing goes up forever and every asset must drop in price to prepare for the next upcoming bull market.
If you maintain a long term investment mindset then you will be thanking yourself in the future for HODL Bitcoin through tough bear markets.