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Will Bitcoin Repeat the Triple Bottom Structure?
After the brutally negative cycle of 2022, bitcoin has strengthened significantly during the first quarter (Q1) of 2023. Bitcoin's spot price is still up 35 percent year to date (YTD), and the price action oscillates inside an ascending channel. Back in 2019, bitcoin's spot price climbed from $3808 to $10 570 between January and July, representing a 178 percent increase. In the 2023 context, a 178 percent increase between January 1st and July 1st would effectively mean bitcoin surging from $16 607 to $46 092. After the spot price projection, let's use the 2018-2019 cycle for another model. Bitcoin's on-chain active address data (30-day weighted moving average, 30WMA) generated three (3) individual bottoms (turquoise, left) as part of the 2018-2019 reversal process. The 2021-2023 cycle shows a similar structure (turquoise, right) as active addresses reached three individual lows as well. Praeterea, we can observe how the amount of active addresses already started to wane during the summer of 2021, effectively acting as a leading indicator to the spot price. Therefore the early 2021 price cycle was the de facto top, supported by fundamentals, while the November 2021 peak can be considered as "secondary". As a summary, if bitcoin follows the triple bottom structure of the last major cycle, we’re about to see incremental price increases across 2023. Bitcoin’s current “fair price” is at $43 598, closely aligned with our last price projection of $46 092. Bitcoin is now in a pre-halving accumulation cycle (red), looking towards 2024.