CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

Bitcoin price analysis: A year-end rally is likely

By Rakesh Upadhyay

Edited by Martyn Cornell


Bitcoins on graph
Cryptocurrency investors remain on the edge on fears that the FTX collapse could bring down several others – Photo: Yuri Shebalius/Shutterstock

Aggressive rate rises by the US Federal Reserve and a string of bankruptcies in the crypto space resulted in one of the worst crypto winters in 2022. Bitcoin (BTC) has dropped close to a 63% year-to-date fall, but analysts remain divided on whether a major low has been made or not. Buyers are trying to push bitcoin above $17,000 as of 22 December 2022.

Fairlead Strategies’' Katie Stockton believes that bitcoin is still months away from forming a major low. In a recent note, Stockton said that technicals suggest a drop to $13,900 for bitcoin by the middle of the next year. In the short term, she expects a retest of “the November lows, near $15,600, in the coming weeks.”

To the contrary, Coinbase in its 2023 Crypto Market Outlook said that bitcoin could be closer to a bottom. The report highlighted that nearly 50% of bitcoin holders were underwater on their investments, which is close to the historical average of 53% seen during the November 2011, January 2015, and February 2019 bear market lows.

The sharp fall in bitcoin has attracted strong buying by retail investors. Will Clemente, an analyst at Reflexivity Research, shared a Glassnode chart, which shows that “the percentage of bitcoin supply held by retail has soared to 17% this year.” This suggests increased adoption of bitcoin, which is a positive sign.

Compared to that, institutional investors seem to have taken a cautious approach toward cryptocurrencies. CoinShares data shows that net inflows into crypto funds slowed to $498m in 2022 versus $9.1bn in 2021.

Could bitcoin go up in the short term and close the year with strength? Read the BTC price analysis to find out.

Bitcoin price technical analysis: Weekly chart

Bitcoin/USD weekly price chart for 22/12/2022Bitcoin/USD weekly price chart for 22/12/202: Soutce

The long wick on BTC’s price last week shows that bears are selling on rallies to the 20-week exponential moving average (EMA). Sellers will try to increase their advantage further by pulling the price below $15,458. If they do that, the BTC/USD pair could start the next leg of the downtrend. The pair could then decline to $13,000 and later to $11,000.

A minor advantage in favour of the bulls is that the relative strength index (RSI) is forming a bullish divergence. This suggests that the selling pressure could be reducing. The first sign of strength will be a break and close above the 20-week EMA.


46.89 Price
-0.040% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.16


1,675.43 Price
-0.420% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 5.40


27,116.60 Price
+0.040% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 85.00


0.52 Price
-0.310% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01192

The pair could then attempt a rally to $25,170, which may again act as a major hurdle. If bulls pierce this resistance, the pair could pick up momentum and rally to $32,283, signalling a potential trend change.

Bitcoin price technical analysis: Daily chart

Bitcoin/USD daily chart for 22/12/2022Bitcoin/USD daily price chart for 22/12/2022 – ource:

Bitcoin’s price broke below the 20-day EMA on 16 December, but the bears could not pull the pair to the November low at $15,458. The price rebounded off $16,297 on 19 December and reached the 20-day EMA. This suggests that bulls are trying to form a higher low.

If buyers thrust the price above the moving averages, the pair could jump to $18,319. The bears are likely to defend this level with vigour. 

If the price turns down from this level but rebounds off the 20-day EMA, it will indicate a change in sentiment from selling on rallies to buying on dips. That could improve the prospects of a rally above $18,319.

This positive view could invalidate in the near term if the price turns down and breaks below $16,297. The pair could then slip to $16,000 and later challenge the vital support at $15,458. A break below this level could indicate the resumption of the downtrend.

Bitcoin: Buy or sell this week?

The bears are trying to stall the recovery at the 20-day EMA, but the bulls have not given up much ground. This increases the likelihood of a break above the moving averages. Bitcoin’s price analysis suggests that the pair could then climb to $18,319, where the bears may again mount a strong defence.

The views and opinions expressed in the article are those of the author and do not constitute trading advice. Trading and investing involve substantial risks and you should do your own research or contact your financial adviser before arriving at a decision.

Markets in this article

Bitcoin / USD
27116.60 USD
10.4 +0.040%

Related topics

Rate this article

Related reading

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Still looking for a broker you can trust?

Join the 555.000+ traders worldwide that chose to trade with

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading