I asked ChatGPT whether Bitcoin will reclaim the $30,000 level in 2023
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
Bitcoin (BTC) trading can be both lucrative and challenging. Developing effective trading strategies that can help traders navigate complex and ever-changing market conditions is one way to go about it. This is especially true as far as the world’s largest cryptocurrency is concerned, an asset that is no stranger to volatility over the years.
For a long time, the crypto’s price hovered between $200 and $1,000 on the price charts. However, in late 2017, BTC’s value exploded, hitting an all-time high of nearly $20,000 in December.
Read Bitcoin’s [BTC] Price Prediction 2023-24
As market participation grew, the price rally was also short-lived. By early 2018, BTC’s price had fallen back down to around $3,000. The cryptocurrency market as a whole recorded a period of decline, with many investors losing significant amounts of money.
Nonetheless, Bitcoin made a remarkable recovery, surpassing its previous all-time high in late 2020 and reaching an all-time high of over $68,000 in November 2021. However, the 2022 trading year ushered in a new era of bearishness, one exacerbated by the collapse of Terra/LUNA and FTX. In fact, in November 2022, Bitcoin was trading at a two-year low of $15,000.
While the crypto market may be unpredictable and volatile, traders and investors can still make informed decisions by staying up-to-date on market news, following expert analysis, and using intelligent trading strategies, such as those offered by ChatGPT.
ChatGPT: A messiah that can help you trade better?
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In November 2022, the AI model ChatGPT was launched to the public. In fact, it quickly gained significant attention, too. With its broad range of capabilities and versatility, the question arises as to whether there are other ways that ChatGPT can lend its expertise, such as assisting BTC traders in formulating and applying improved trading strategies.
When asked if it could do this, ChatGPT had this to say –
Due to its nature as an AI tool, there are limitations to what ChatGPT can do regarding price predictions and price future movements. However, there are ways to leverage the tool’s capabilities to formulate better trading strategies as a BTC trader.
One way to utilize the AI tool to make better trading strategies is by deploying it toward fundamental analysis. ChatGPT is capable of extracting insights from financial news articles, social media posts, and other unstructured data sources. This information can then be used in conjunction with other datasets to make informed trading strategies.
Another way to use ChatGPT as a Bitcoin trader is to use it for sentiment analysis. ChatGPT can be fine-tuned to perform sentiment analysis on information from news articles, on-chain data providers, social media discussions, and other sources. This can be used to identify whether the BTC market lingers under positive sentiment or is plagued by negative sentiment.
Furthermore, ChatGPT can be used by BTC traders for technical analysis. Traders can ask ChatGPT to code any technical indicator or trading bot for any trading platform.
For instance, I asked ChatGPT to give me an example of a trading bot that I can use to track BTC’s price volatility in pine script–TradingView’s programming language useful for backtesting trading strategies. The AI responded,
To use ChatGPT for technical analysis, traders need to be familiar with the language to know when to make the necessary modifications for the code to work properly. The wording of the input is crucial in how ChatGPT understands the problem to provide the anticipated solution.
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For a well-rounded piece, I spoke to Brian Quinlivan, the Director of Marketing at Santiment, who also happens to have been involved in Bitcoin trading for a few years.
Brian Quinlivan has an MBA degree in finance from Chapman University, Brian has over 10 years of marketing, financial, and data analytics experience. He enjoys creating financial models to improve modern-day investing strategies and study the intricacies of market variations.
Q: In what ways do you think ChatGPT can revolutionize cryptocurrency trading?
Yeah, I think that there’s going to be a lot of use for it, certainly for trading strategies. One thing to be concerned about is the uniform opinions that may result from an AI tech giving a kind of overarching strategy, whether it be hodling or fundamental strategy.
ChatGPT could easily be used for manipulation and even unintentionally manipulate its audience, and we’re already seeing slight effects of it.
I think it can be both helpful and dangerous at the same time and cause a lot of people to be educated much more quickly, but also be pulled in directions that can influence the way crypto goes and create a lot of self-fulfilling prophecies.
Q: How do you think a BTC trader/investor can leverage the AI tool to make better investment decisions?
I think, in short, I think scripts would be used in AI a lot more because of the fact that all of the data could be digested at the same time and given a very simple answer whether to buy or sell. This, I believe, can influence the markets tremendously moving forward.
How soon can BTC hit $30,000 again?
As mentioned above, ChatGPT is incapable of making future predictions. However, I asked it to provide me with its opinion on how soon BTC would claim the $30,000 psychological price mark in light of seemingly bearish macro factors.
To get it to answer my question, I decided to jailbreak it by using the Do Anything Now (DAN) method. It had this to say afterward:
I quizzed the AI technology further on Bitcoin prices between 2023 and 2024.
At press time, BTC was trading at $27,045. Though its value has risen modestly by 2% within a week, it was trading around the $28.5k-price mark earlier this week. Investors are hoping that the token will recover and somehow reach the $30k-price mark.
As investors anticipate reclaiming the $30,000-level, many have taken profits from their investments. As per data from Santiment, the coin’s MVRV ratio was 45.85% at press time, positioned in an uptrend.
A positive MVRV ratio above two for any crypto-asset implies that, on average, holders can make a profit of twice their initial investment if they sell their coins at their press time price.
Sellers were spotted in control of the BTC market on the daily chart and have been so over the past few days, thanks to the downward price movement witnessed recently. At press time, the Positive Directional Indicatorat15.54 rested below the Negative Directional Indicator at 20.82.
Besides, the Average Directional Index at 13.88 revealed a bearish trend for the premier cryptocurrency. BTC’s Relative Strength Index was at 46 and its Money Flow Index at 64 rested much above the 50-neutral spot. Though the bears seem to be dominating the bulls for now, we have seen significant spikes occasionally.
ChatGPT might be right
According to ChatGPT, BTC’s price is expected to continue rising and break new all-time highs between 2023 and 2024 due to increased adoption (by companies and institutions) and as BTC’s appeal as a hedge against inflation grows. This prediction is spot on, as favorable macro conditions can help drive up the value of the leading coin.
However, it is trite to note that increased regulation and government crackdowns could spread FUD, causing its price to dip.