Analysis of the value of Bitcoin (BTC)
Analysis of the value of Bitcoin (BTC)

Analysis of the value of Bitcoin (BTC)

By Federico Izzi - 30 Dec 2022

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The year 2022 was a difficult year marked by events that we will remember and will define the performance of the crypto industry in the coming months as well.

2022 brought to light the fragility of projects that were considered innovative while instead turning out to be scams to the detriment of many investors, creating a cascading effect that is still difficult to define.

What happened, on the one hand will be a cue for investors to become more mindful about evaluating projects that deceive them into unhinging financial rules by promising unsustainable returns in the long run, while on the other hand it quickly brings down the trust painstakingly built over the past 3 years.

To achieve the adoption of a financial payment system parallel to the traditional one, or the use of distributed open source systems to run applications on a global network without the risk of censorship, it is necessary to gain the confidence of people unfamiliar with technology to shift trust from traditional systems to open, distributed systems.

For the first time in Bitcoin’s history, the quarterly balance closes in the red for the fourth consecutive time. There had never been more than two consecutive negative quarters closing in the red for Bitcoin since the year 2015.

In Bitcoin‘s history, 2022 is also characterized as the 2nd worst year ever with 8 monthly closings in the red. Only 2018 did worse by recording 9 months below par.

Same fate for Ethereum on a monthly basis with 9 out of 12 negative closings, while the upward closing of the third quarter with a 24% gain allows it not to match the negative record of 4 consecutive quarters in the red. ETH has not posted more than 2 consecutive losing quarters since its inception in 2015.

None of the top 200 largest-capitalization cryptocurrencies, ranging from $317 billion for Bitcoin to $72 million for the latest observed, ends the year in profit. It signals a dismal year for the entire crypto industry.

In the history of Bitcoin and Ethereum, it is the third negative year, for both the second deepest. Two consecutive negative years have never been recorded in the past. Statistical indication that bodes well for future trends.

The value of Bitcoin (BTC)

It was necessary to limit the damage in order to give a positive signal for investor morale, which in the last weeks of December, despite the slide that brought prices back below $16,500 USD, remains at its highest level in 6 months.

An annual close above $17k is more of a favorable signal to boost traders’ sentiment. To get a technical signal, it is necessary to break above $18k, a level abandoned in early November in the early stages of the FTX exchange crisis.

Declines below $15k would open dangerous room to sink into the $12k area, extinguishing hopes of recovering important long-term technical levels, e.g., $35-40k USD, during 2023.

The value of Ethereum (ETH)

Similar is the technical structure of ETH, which must not allow bearish speculation to push prices below $900 over the course of the entire year in order not to undermine the long-term technical setup.

In the coming months, it is necessary to recover the $2k, period highs reached in mid-August, to begin to give a positive signal of a trend change from bearish to bullish.  

Federico Izzi

Financial analyst and independent #trader – S.I.A.T. & partner. He operates actively on stock and derivatives markets (futures and options) since 1997. A precursor of cyclic-volumetric analysis he is known for having identified the most important upward and downward movements in the financial markets of recent years. He participates annually as a speaker at the ITForum in Rimini since the 2010 edition and InvestingRoma and Napoli since the first edition of 2015. He is a guest and market expert on the "Trading Room" and "Market Driver" broadcasts of Class CNBC, Borsa and on the evening news of Traderlink. Since July 2017 he is a permanent guest on LeFonti.TV, the only weekly national space dedicated to cryptocurrencies alongside the most important international experts in the field. He was interviewed as a cryptocurrency expert for Forbes Italia, Panorama, StartupItalia and DonnaModerna. He was recognized as the first Italian technical analyst to have published the first secular cyclic analysis on Bitcoin. Periodically publishes articles on ITForum News, Sole24Ore, MILANOFINANZA, TrendOnLine and Wall Street Italy. Federico Izzi is... "Zio Romolo".

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