November has traditionally stood out as a remarkable month for Bitcoin, boasting a historical track record of an impressive average price surge of 43%. Such an increase would potentially catapult Bitcoin to approximately $48,000. However, as October has already witnessed a substantial price uptick, a pertinent question emerges: Will Bitcoin persist in its bullish trajectory, or is a retracement on the horizon?
Monthly Returns in November
Over time, November has displayed a particularly bullish inclination for Bitcoin, with an average price increase of 43% throughout the years. If this trend holds for the current year, we may see Bitcoin scaling up to $48,000.
Nevertheless, it’s essential to recognize that this exceptionally high average is notably skewed by the extraordinary 453% surge in 2013. If we exclude this outlier, the average stabilizes at around 11.54%. This leads to a more conservative forecast, indicating a potential rise to roughly $38,000.
A Deeper Analysis
Digging deeper into historical data, it’s worth noting that 8 out of the past 13 years have witnessed price increases in November, which makes the prospect of another increase this month plausible. Yet, a closer examination reveals that in 4 of the last 5 November, there were price dips.
In 2022, the FTX exchange collapse played a pivotal role, and in 2021, Bitcoin marked its peak, implying that these decreases might be outliers rather than indicative of a changing trend.
For a more direct comparison, 2019 stands out as it was also a pre-halving year, similar to 2023. During that year, after a promising October, Bitcoin encountered a 17% dip in November, equivalent to a value of $28,000 if a similar scenario repeats this year.
Bitcoin Price Action in 2023
Throughout 2023, Bitcoin has displayed a recurring pattern following significant price increases of over 20%. Typically, such surges have been followed by consolidation periods and subsequently, a retracement to at least half of the initial increase.
Consider January, for example. Bitcoin’s price surged from $16,500 to $24,000, only to decline to $20,000 by March, constituting a retracement of 60% from the initial increase.
An extreme case occurred in August when Bitcoin retraced the entire 20% rise from the previous period.
It’s noteworthy that these retracements haven’t always occurred immediately. After the surge in March, it took until June – three months – for the price to experience a 50% retracement. On average, this year’s price retracements have taken between 1 to 3 months to materialize following a surge.
Moreover, before any retracement takes place, there remains potential for additional upward movement. For example, after the aforementioned March surge, Bitcoin saw an additional 10% increase before eventually retracing the initial surge.
Potential Scenarios for November
Considering the aforementioned insights, potential scenarios for November are outlined as follows:
- Very bullish scenario: Bitcoin rises by 10-20%, potentially reaching up to $42,000.
- Bullish scenario: Bitcoin rises by 1-10%, potentially reaching up to $38,000.
- Bearish scenario: Bitcoin decreases by 10%, dropping to around $31,000. This would signify a 50% retracement of the October surge.
- Very bearish scenario: Bitcoin decreases by 20%, falling to around $28,000. This would represent a 100% retracement of the October surge.
In conclusion, given historical trends and current market behavior, November appears poised to be a pivotal month for Bitcoin.