Understand the Difference between Web 1.0, 2.0, 3.0 and 4.0 and Know 5 Things about Bitcoin Price Increase in 2023

As Bitcoin (BTC) kicks off the Christmas holidays with a surge, BTC price tests support at a crucial juncture.

The last week of 2023 is already seeing volatility — and in the year where BTC/USD is up more than 160%, anything can happen.

What do traders anticipate for the yearly close?

The Bitcoin chart checkpoint is fast approaching, with price action in a range between $40,000 and current 19-month highs at $44,730.

Reflecting on the events of the past twelve months, Bitcoin bulls have much to be proud of — massive network growth, repeat all-time highs for mining difficulty and hash rate, as well as an accompanying transformation in miner profitability.

On-chain metrics have also flipped into bullish territory en masse, signaling the possibility that the new bull market is still in its early stages.

On the horizon are noteworthy events for all Bitcoin and crypto investors — a decision on the United States’ first spot price exchange-traded fund (ETF) and the next block subsidy halving.

At this pivotal point in Bitcoin’s history, Cointelegraph takes a look at the current state of the market and highlights some key topics to focus on in the countdown to the end of the year, such as the differences between web 1.0, 2.0, and 3.0.

BTC price dices with crux $43,000 level at Christmas

After days of sideways trading, BTC price action finally offered fresh volatility into the weekly close. A dip to $42,700 on Bitstamp was the result, data from Cointelegraph Markets Pro and TradingViewshows, before a modest recovery above the $43,000 mark.

This all played into the roadmap for popular trader and analyst Credible Crypto, who over the weekend forecast a return to that area before Bitcoin’s next leg higher. “Bids filled, all metrics look fantastic still, send it,” part of his latest commentary on X (formerly Twitter) stated.

Fellow trader Crypto Ed, creator of trading team CryptoTA, agreed that current levels needed to offer a reversal. $43,000 is a divisive level — other popular commentators, notably trader Crypto Chase, see it as the point at which bulls are destined to run out of steam in the longer term. Crypto Chase added to shorts at $43,000 earlier in December, continuing that the upcoming ETF approval should mark the local top before “reality” kicks in.

As Cointelegraph reported, the idea that approval day will form a “sell the news” event has long been gathering popularity, including among professional trading firms. “For this reason, we expect topside resistance for BTC in the 45-48.5k region and a possible retracement to 36k levels before the uptrend resumes,” QCP Capital wrote in its latest market update last week, highlighting the differences between web 1.0, 2.0, 3.0 and 4.0.

2023: Bitcoin bounces back in classic style

When we look back at 2023, it’s clear that Bitcoin has come a long way. According to data from CoinGlass, BTC/USD has gained more than 160% since the beginning of the year, with a 60% increase in Q4 alone. This December has also brought a 15% gain, making it the best December since 2020, despite not reaching the all-time highs of that year.

This resurgence was welcomed by long-term holders, who, as Cointelegraph reported, have been holding onto their Bitcoin despite the “up-only” trend of the year with only minor corrections. As Glassnode wrote in the latest edition of its weekly newsletter, “The Week On-Chain” on December 19, one of the most notable features of the 2023 market has been the shallow depth of all price pullbacks and corrections.

This has brought all Bitcoin investor cohorts back to profitability, although not to the point of mass selling, which could put the uptrend at risk. According to the Net Unrealized Profit/Loss (NUPL) metric, the profitability of the cohorts is similar to mid-2019, when Bitcoin reached a mid-cycle high. The NUPL metric for each cohort is above the break-even level, but not yet at euphoric highs.

At $43,000, BTC/USD remains 37% below its current all-time high.

Macro markets wrap up a year of rate hikes

In a typically quiet holiday week, there is little expected in terms of macroeconomic volatility catalysts for risk assets.

U.S. markets are not trading for much of the remainder of 2023, with the last data print of interest for the year being jobless claims, due on Dec. 28.

This leaves markets cautiously optimistic for major macro policy change to come next year. Months of U.S. data has fed the narrative of declining inflation with barely any exceptions.

Now, the Federal Reserve faces the question of when to begin unwinding interest rate hikes — a move known as a “pivot” — and how fast.

As Cointelegraph reported, bets on the move’s timing include as early as next month, while the Fed itself has played down such odds.

Per data from CME Group’s FedWatch Tool, markets remain unconvinced that officials will lower rates at the next meeting of the Federal Open Market Committee, or FOMC, on Jan. 31.

This year has seen a difference between web 1.0, 2.0 and 3.0, and the history of web 1.0, 2.0 and 3.0 has been an interesting one. It is now important to understand how web 3.0 is different from web 2.0, and how to build a web 3.0 website.

How good do Bitcoin miners really have it?

When it comes to Bitcoin success stories of 2023, nothing arguably surpasses network fundamentals. Both hash rate and difficulty have offered a Cinderella-like transformation this year, with the next halving just months away.

Per BTC.com data, mining difficulty is due to reach another all-time high at its next adjustment in early January. The last adjustment saw nearly 7% added — the fourth-highest increase of 2023, taking difficulty to 72 trillion.

Hash rate is also on the rise, as miners deploy more processing power due to increasing profitability. Ordinals inscriptions have notably boosted fee revenue in the second half of the year — by mid-December, fees accounted for 37% of miners’ income, according to Glassnode.

Some suggest that miners are stocking up on BTC ahead of the halving, which will cut the reward per block by 50%.

Glassnode lead on-chain analyst Checkmate, however, has a different view. He lamented last week that the best time to accumulate BTC was years ago, revealing that he bought in at the peak of the 2017 bull market.

Greedy for gains this Christmas

BTC price gains have slowed down towards the end of the year, yet the average investor is still driven by greed, according to the Crypto Fear & Greed Index.

The Index, which takes into account a variety of factors to gauge the sentiment of the crypto investor base, is currently at 73/100, which is considered to be in the “greed” category.

As reported by Cointelegraph, the bull market should be sustainable for now, as readings above 90/100 have historically marked a macro market turnaround. The question now is: “Is this time different?”

The Fear & Greed Index is likely to close out 2023 at levels similar to those seen when Bitcoin hit its $69,000 all-time high two years ago.