Don't worry, this isn't likely the end of the Bull Market in Bitcoin...
Bitcoin is most likely doing what it always does during bull markets, and that's pullback by roughly 30%
I've seen some questions out there where people are starting to say that $58k number might have been the bull market top...
Nothing like some good ol fashioned fear uncertainty and doubt (FUD), am I right?
While I don't have a crystal ball, I can't tell the future, and simply make just about all my predictions/thoughts based on past patterns, the odds of that being the bull market top are extremely low.
Yesterday I postulated whether the current drop would be a quick pullback and then a resumption of the uptrend or it would be something a little longer and deeper, down in the 30% range.
I think at this point, with bitcoin already testing $45k (22% drop from $58k) it's looking like it will indeed be one of those 30% corrections.
As we've seen time and time again, 30% corrections are nothing out of the ordinary during bull markets.
We saw 6 of them during the 2016-2017 bull market:
So far, during this bull market, we have seen 2 roughly 30% corrections, with this looking very much like it will end up being the 3rd such correction so far.
Interestingly enough that puts us very much on pace with the chart I posted above with the 3rd 30% correction happening around March ish...
What should we expect if this is indeed another 30% correction?
I keep posting that chart above in a lot of my recent posts because it's such a gold mine of information for those participating in the bitcoin and crypto markets.
While history doesn't repeat exactly, it sure rhymes an awful lot in the bitcoin/crypto markets.
Some stats...
- 6 corrections of roughly 30%
- 100% gains from the lows of each correction
- 153% average gain from the low of each correction
- 3.3 weeks from peak to trough (on average) during the correction
There is a whole host of data to be gleaned from the above chart, but the above is just some of it.
As it relates to the current bull market cycle we are already seeing this info play out yet again, and some new data is emerging as well, such as this:
(Source: https://twitter.com/Negentropic_/status/1363911064405094410/photo/1)
Keep in mind that the creator of this chart doesn't understand how to calculate percentages as the previous correction was roughly 31%, but irregardless we can see that both rallies lasted for roughly 28 days.
Whether that pattern continues or not, I have no idea as the prior rally phases weren't identical in length back in 2017, though most were similar in length.
Applying the above data to the current correction and it looks like we could expect to see bitcoin drop to around $40k or so before turning back up.
It may take several weeks to put in the low.
Then from those lows it is very likely to rally north of 100%, which would be north of $80k+ before the next 30% correction.
(Source: https://bittrex.com/Market/Index?MarketName=USD-BTC)
On a personal note, I'm still planning on HODLing the stack I picked up around $10k...
Hopefully this data helps give some insight into what is likely going on right now.
Stay informed my friends.
Image Source:
https://investinghaven.com/crypto-blockchain/crypto-bull-market-accelerate-2021-replay-2017/
-Doc
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Of course, we shall keep the spirits high as the bull run will be here for a long time. Square just bought another 3318 BTC, valued at $170 millions, so there will be further growth.
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Yep, I saw that as well. That is roughly 5% of their cash now.
To be honest you don't need any crystal ball, as you have very accurate calculations.
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Haha, well thank you very much!
Solid insight as always. As much as everyone would prefer things go straight up, these things are overall very healthy for the market, as evidenced by your facts above about the markets rallying over 100% after these corrections.
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This one went almost exactly 100% prior to this correction. I was hoping it would get over $60k before it started as that was my target to unload a bit. Unfortunately that didn't happen.
With each rally a 30% correction, am I to assume that the next bull run when BTC goes above 60K we would have to be on the lookout to short invest to make money on a possible 30% drop?
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The idea is that the price likely goes up at least 100% from wherever the lows are from this current pullback. Once we cross that 100% gain, yes it might be wise to be cautious of the next 30% pullback.
I paid a bit more. I'm a solid HODLer, too.
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Full disclosure I have some in other accounts that I flip in and out of, but as far as my hodler stash, still hodling strong. :)
Great insights. I recently took a bunch of profits as I got in at $400 ETH and $10K BTC (not as much as I would have liked.)
What do you think of talk that this might be a "two-phase" bull market? Can a correction drag out for months and we still remain in a bullish phase? Or must they necessarily be pretty quick?
Like you, I would be very surprised if the top is in. At least $100K BTC (very psychological number), $5-$10K ETH, etc. seems more likely to me, whether in Summer or into Winter of this year.
It could certainly be more of a 2 phase bull market, more akin to 2013 than 2017. If that were to be the case then yes a deeper and more prolonged correction could certainly happen. I suspect it will be closer to 2017 but leave up the possibility it is more like 2013. Either way we will make higher highs at some point this year.
Your analyses helps people see the bigger picture and not worry about the blood in the streets.
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It is now back above 50k
We Hope we can see 60k soon
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It may take several weeks, but I think we will.
Very interesting. I have a feeling we may have just seen a flash mini correction in lieu of what you're talking about, but nothing to back that up but gut.
The 30% correction would line up well with March seasonal drag, with everyone seemingly talking about that though, have to consider this time might be different.
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I think it will end up being a normal type of correction, lasting several weeks, but it may not go down the full 30%. So far we have seen a 22% drop. I think we likely chop around for the next several weeks between about $55k and $44k before ultimately breaking out again to the upside.
Watching Bitcoin’s price everyday can be bad for your health. All the excitement of the highs and the anxiety when it dips. Lol!
But you’re right. A 30% correction should be expected. And it’s not so bad considering how much the price increased this year. It also gives us a chance to accumulate a few more coins at lower prices.
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Yea, it certainly can if you don't understand what is going on. However, if you have an idea what is going on you can take advantage of the opportunities.
We’ll see $100k Bitcoin this year
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Si. I think it happens by July of this year.
and then $200k
and at this rate $300k as well :D
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Most definitely! For those who were contemplating on when to buy and HODL, now is that time they were waiting for.
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Exactly, but most still won't. They will be waiting for lower and lower and lower that never comes.
It's beautiful how 40K would work out nicely with the last major top (pivot point).
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Yep, it would. Though it may not even get that low. We shall see.
I'm still not convinced.
We still need to dip lower before we hit a consolidation phase.
This 20% flash-crash so far isn't that much different from what we saw Jan 3rd.
We can still break new all time highs within the week.
Too many sharks are buying.
The bears have completely lost all control.
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I suspect it will play out just like it did in early January. Take several weeks of consolidation before ultimately breaking out again to the upside.
I suspect it will play out just like it did in early January:
Immediately spike up to all time highs :D
Why is this dump being compared to Jan 9th when it's closer to Jan 3rd?
Not that it matters either way: buy in now or get left behind.
$50k is the level I think we are crashing back to after this is all over.
The correction you are referring to wasn't even a correction. I suspect this correction will be similar to the prior correction in January.
That's the thing about corrections: they are easier to call in retrospect.
While it was happening Jan 3rd was a "healthy correction" and then when the market bounced back to all time highs it became a "temporary flash crash". Has enough time passed for this dip to not qualify as a "temporary flash crash"? I think the answer lies in the next local peak. If we get batted down by resistance before making another all time high it will be obvious.
January 3rd didn't drop by 22% in less than 24 hours... apples and oranges
It was a 20% drop in 24 hours.
So no I guess it wasn't 22%.
I hadn't realized it went over 20%, that is interesting. There is no guarantee how long the correction will last or how low it will go. Some only lasted a week or two while others lasted multiple weeks from peak to trough. Not a single correction in 2017 went more than 38% from peak to trough and they seemed to get shorter in duration the further along the rally went.