From $65,000 to $42,000 in a Month: The Worst Bitcoin Correction During This Bull Run
In the span of a month, bitcoin went from $65,000 to $42,000, which officially became the largest correction since the bull cycle began in October 2020. So far, it has taken the asset between four and five weeks to recover all losses and head towards a new high during previous similar developments. As such, the question remains if history will repeat itself once more.
Worst 2020/2021 Bull Run Correction
Although it seems like a lifetime ago, it was just last October when the primary cryptocurrency dabbled with the $10,000 price tag. The majority of the crypto community believes this was the moment when the tables turned, and bitcoin finally entered its long-anticipated after-halving bull run.
The numbers certainly support this narrative as the asset’s value increased by more than six-fold in the following months. This led to frequent all-time highs, with the latest one coming in mid-April at roughly $65,000.
However, the ever-volatile BTC nature struck again, but this time in the opposite direction. The trajectory changed with some assistance from Tesla’s Elon Musk in the past few days, and bitcoin lost over $23,000 of value since then. This resulted in plummeting to a three-month bottom of $42,200 earlier today.
Popular trader Peter Brandt, who has been advocating for an upcoming steep correction for months, highlighted this statistic. It’s actually the largest retracement in the ongoing bull run with a 35% decline (as of the bottom on May 17th).
Bitcoin Bull Market Corrections. Source: Twitter
The previous ones saw the price dump by 31.6% from mid-January to mid-February, 26.3% in March, and 18.6% in April.
It’s worth mentioning the mid-March 2020 price drop when bitcoin lost 50% of its value in a day during the COVID-19-induced liquidity crisis. Nevertheless, it was before the halving, which is typically regarded as the catalyst for bull runs.
As the graph indicates, bitcoin is quite accustomed to similar massive retracements amid bull cycles. During the previous one, there were eight such developments that saw the price decrease by more than 30% in weeks.
Will Bitcoin See Another Top?
According to the graph, BTC’s price recovered after each of the price slumps experienced in the current run. On average, it took the cryptocurrency between four and five weeks to regain all lost value and even chart a new high.
This raises speculations about whether bitcoin could pull another rabbit out of its hat now and do it again. After all, this is “only” the fifth correction in this cycle, even though it’s the largest one.
This could be somewhat challenging, according to on-chain data. As reported earlier, some investors have started to deposit large amounts of their coins onto exchanges, which could increase the selling pressure and bring further declines in the short term.
Nevertheless, BTC’s fundamentals remain solid. Miners and long-term investors refuse to sell, institutions keep accumulating, and the network’s hash rate recently reached a new all-time high as well.