CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% 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

BTC / USD forecast: Can bitcoin reverse downward trend as crypto winter bites?

By Iliana Mavrou

Edited by Jekaterina Drozdovica

11:11, 12 October 2022

Gold bitcoin coin standing in front of dollar bills. New virtual money concept
Can bitcoin reverse downward trend as crypto winter bites? Photo: In Green / Shutterstock

Since its November 2021 all-time high, Bitcoin (BTC), the world’s biggest cryptocurrency, has lost over 70% of its value, in line with the broad cryptocurrency markets. The harsh crypto winter was sparked by surging inflation, risk-off sentiment amid recession fears and the crash of the TerraUSD (UST) stablecoin.

Will the cryptocurrency pioneer ever resurface? We take a look at the key factors driving the BTC/USD forecast in 2023 and beyond.

What is BTC/USD?

BTC/USD is the exchange rate of bitcoin against the US currency. BTC to USD measures how many USD are required to purchase one bitcoin. 

Created in 2009, Bitcoin, the first ever decentralised digital currency, acts as a peer-to-peer payments system. It uses no central authorities or banks to manage transactions, which are instead organised “collectively by the network”. 

The cryptocurrency was invented  by an anonymous person or group of people under the pseudonym Satoshi Nakamoto. It has since established itself as one of the most popular digital assets. The first ever BTC token, the so-called genesis block, was mined in January 2009. 

Bitcoin’s blockchain uses a Proof-of-Work (PoW) consensus mechanism, which is secured by miners verifying BTC transactions in exchange for BTC reward. The process is known as crypto mining

These rewards are cut in half after every 210,000 blocks are mined, or approximately every four years, in halving events, thus reducing the amount of overall BTC coins in circulation and raising the cryptocurrency’s price by cutting supply.

The most recent halving event took place on 11 May 2021, when bitcoin’s block reward was reduced to 6.25BTC. The next halving event is estimated to take place in 2024. 

In addition to being a “peer-to-peer version of electronic cash” bitcoin is also now used as a store of value. Bitcoin has a maximum supply of 21 million tokens. 

What is your sentiment on BTC/USD?

70064.35
Bullish
or
Bearish
Vote to see Traders sentiment!

BTC/USD price history

It has taken BTC to USD around eight years to surge past $1,000 since its launch in 2009. In 2017, the cryptocurrency saw a good run, rising by 1,600% within a year from $1,044.4 at the start of January 2017 to $17,760.3 by 20 December 2017 – a then all-time high. 

However, a steep sell-off at the start of 2018 interfered, bringing the bitcoin’s price down to $7,637.86 by 8 February 2018. BTC continued to decline falling to $3,000 by 10 December 2018. 

The cryptocurrency peaked once again in the beginning of July 2019, surpassing $12,000 for a brief time before losing over 58% of its value and dropping to $5,000 by 13 March 2020. 

BTC/USD RATE 2017-2022

In 2021, the cryptocurrency enjoyed another bull run, the biggest in its history. By 8 January 2021, the token was valued at around $ 39,000. On 16 April 2021, bitcoin reached its first peak at $63,258.51 – a surge of around 62%. BTC’s price continued to rise, reaching the all-time high of $67,549.74 on 9 November 2021. 

In 2022, the coin has been experiencing one of the harshest crypto winters yet, losing nearly 72% since the November 2021 highs, and is currently (12 October) hovering at $19,000. 

What’s shaping the BTC/USD forecast?

The cryptocurrency market has been affected by a number of factors in 2022 such as with the war in Ukraine, the collapse of the TerraUSD (UST) stablecoin and rising inflation. Peter Eberle, president and chief investment officer of Castle Funds, told Capital.com:

DOGE/USD

0.17 Price
-0.600% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

XRP/USD

0.54 Price
-1.390% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

BCH/USD

503.80 Price
-2.590% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.50

ETH/USD

3,742.46 Price
-0.360% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00
“The first half of 2022 was horrible for equity, bond and crypto markets. A confluence of macro factors such as Russia’s invasion of Ukraine, US Policy makers' slow realisation that inflation was real, then the aggressive pivot to higher interest rates, supply chain issues due to China’s Covid polices all led to a steep sell off across markets.”

Eberle added that Terra’s “meltdown”, which led to the subsequent fall of its sister cryptocurrency, LUNA, “created cascading liquidations across multiple platforms”, affecting not only the BTC/USD price but also several hedge funds, including Three Arrow Capital and Celsius Network. 

On 9 June, bitcoin briefly traded above $31,000, however, this soon turned into a selloff, which saw the cryptocurrency lose over 90% of its minor gains, falling to $19,000 10 days later. Since then, BTC has been fluctuating, trading between $23,000 and $19,000. 

“At the end of the 2nd quarter many in the industry were waiting for the proverbial ‘next shoe to drop’, but fortunately things calmed down,” Eberle noted. 

Anndy Lian, chief digital advisor at the Mongolian Productivity Organisation and author of NFT: From Zero to Hero, said that bitcoin’s price depends on the outcomes of the Federal Reserve's (Fed) meetings and decisions on monetary policy tightening, as well as latest inflation readings such as Producer Price Index (PPI) and the Consumer Price Index (CPI). 

“However, I am not pessimistic. The mining companies have endured tough times. Despite the high hash rate, bitcoin's price has not significantly increased. This signals that the miners are not piling the network to obtain big gains on bitcoin, they are confident that the mining business will do well now that the network has proven staying power.”

Historically, October has been a good month for cryptocurrencies, with bitcoin’s price change averaging at 14.6% gain in October since 2011, Capital.com’s seasonality research showed. Yet this year proves to be different.  Castle Fund’s Eberle noted:

“The third quarter of 2022 showed consolidation in the crypto market while equities and bonds continue to slump. The Dow Jones Industrial Average dropped 6.2%, Bitcoin dropped 2% but saw significantly lower volatility and the broader crypto market capitalization increased by 8.5%.”

Bitcoin to US dollar forecasts are currently focusing on macro events, Eberle added, specifically the Fed’s interest decisions, the future outcomes of the Russia-Ukraine conflict and the US midterm elections that are due to take place on 8 November. In addition, Eberle added some historical outlook concerning bitcoin’s past halving events: 

“In 2015 BTC bottomed 547 days before the halving and in 2018 is occurred 517 before. The next halving is estimated to happen in April or May of 2024 so if history repeats we should be nearing the beginning of the next bull market.”

BTC/USD forecast 2022 and beyond

Despite the latest downward price action, algorithm-based forecasting service Wallet Investor gave a bullish BTC/USD forecast at the time of writing (12 October). The site noted that BTC was “a very good long-term investment”.

Based on its analysis of past price performance, WalletInvestor predicted that BTC/USD could trade at $25,373.90 in 2023 and surge to $47,496.74 in 2027.

DigitalCoinPrice supported the positive BTC/USD forecast but saw a speedier pace of growth in the following years, expecting the cryptocurrency to reach $24,206.47 by the end of 2022 and $43,340.43 by the end of 2023. 

Its BTC/USD forecast for 2025 showed the cryptocurrency reaching $77,238.07 on average and $94,929.40 in 2027. The platform’s long-term BTC/USD forecast for 2030 expected the cryptocurrency to surge to $266,189.92 on average. 

Lian did share the bullish sentiment on BTC to USD forecast:

“Bitcoin price hovers around $19,400, up 1.9% in the last week. Zooming out, it has gained 1% in value for the past 30 days. Unless we see the S&P 500 go down to 3200, bitcoin can go below the $13,000 region, else I think it will continue to trend sideways for the next few weeks.”

However, Lian noted that a positive aspect to highlight would be bitcoin’s hash rate which continues to surge. 

Note that BTC/USD predictions can be wrong. Analysts’ and algorithm-based predictions shouldn’t be used as a substitute for your own research.

Always conduct your own due diligence on the stock before trading, looking at the latest news, a wide range of analyst commentary, technical and fundamental analysis. Note that past performance does not guarantee future returns. And never trade money you cannot afford to lose. 

FAQs

Why has BTC/USD been dropping?

Analysts are saying that macroeconomic factors including the war in Ukraine, surging inflation and the crash of the TerraUSD stablecoin have been hurting the BTC/USD price. The coin was also highly affected by global monetary tightening.

Will BTC/USD go up or down?

At the time of writing (12 October), algorithm-based company Wallet Investor predicted that the BTC price could reach $25,373.90 in 2023 and $47,496.74 in 2027. DigitalCoinPrice also gave a bullish BTC to USD forecast, predicting that the coin could reach $24,206.47 by the end of 2022 and $94,929.40 in 2027. Note that their predictions can be wrong. You should always conduct your own due diligence before trading. And never trade money you cannot afford to lose.

When is the best time to trade BTC/USD?

Cryptocurrency markets are open 24/7, which means you can trade BTC/USD at any time of day. Looking at price charts, and following the latest news and updates to conduct your own market analysis could help you figure out which time is best for you.

Is BTC/USD a buy, sell or hold?

Your trading strategy for BTC/USD should depend on your personal circumstances, risk tolerance and portfolio composition. You should do your own research to develop an informed view of the market. Look at the latest market trends, news, technical and fundamental analysis, and expert opinion before making any investment decisions. Keep in mind that past performance is no guarantee of future returns. And never invest money that you cannot afford to lose.

Markets in this article

BTC/USD
Bitcoin / USD
70064.35 USD
252.8 +0.360%

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 in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that Capital.com believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

Still looking for a broker you can trust?

Join the 610,000+ traders worldwide that chose to trade with Capital.com

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