Bitcoin enthusiasts are eagerly counting down the days until the next halving event, which is set to take place on April 20, 2024. With just two days left, there’s a sense of anticipation within the crypto community as investors closely monitor the price swings of Bitcoin (BTC) in the midst of the current market downturn. Notably, Rekt Capital, a prominent figure in the crypto world and trader analyst, has shared insights on the significant pullbacks BTC has experienced since the bear market in late 2022. In this article, we’ll dive deeper into these retracements and their potential implications for investors.
Understanding Bitcoin Pullbacks
Since the November 2022 Bear Market Bottom, Bitcoin has encountered several notable pullbacks:
1. -23% in February 2023
For 21 consecutive days, Bitcoin’s price experienced a significant decrease of approximately 23%. This downturn signaled market instability and readjustment, with US regulators being a major contributing factor around the middle of the month. Their actions against Kraken Exchange and Paxos caused panic in the crypto industry, resulting in a dramatic drop. However, Asian markets, particularly Hong Kong, displayed resilience and optimism, leading to a partial recovery from this decline.
2. 21% in April/May 2023
For approximately two months, Bitcoin’s price experienced a substantial decrease of 21%. This prolonged downturn put investors and market sentiment to the test. The primary causes were a massive sell order at Binance and high inflation numbers from the UK. The sell order caused Bitcoin to plummet by over 3% below $30,000, with further declines reaching $29,000. Over $25 million in bitcoin futures were liquidated, with long positions accounting for 98% of the total. Analysts suggest this was a ‘leverage purge,’ with significant repercussions felt in ETH as well.
3. 22% in July/September 2023
In the summer of 2023, Bitcoin experienced another significant drop in price, lasting 63 days and amounting to approximately a 22% decrease. This prolonged downturn can be attributed to several factors that contributed to market instability. Among these were long-term investors choosing to sell their profits, the influence of geopolitical tensions on investor sentiment, and concerns regarding potential government sales of Bitcoin linked to the Silk Road case.
4. 21% in January 2023
The decrease in Bitcoin’s price is likely due to traders taking profits following the coin’s significant gain of over 150% earlier in the year. This has led to a large number of bullish bets being liquidated, decreasing the market’s overall leverage. Furthermore, there was an uptick in open interest and positive funding rates for perpetual swaps, suggesting substantial bullish bets. The market also awaited the release of US inflation data and the Federal Reserve’s last policy meeting of 2023, which could potentially impact aggressive wagers on rate cuts. These factors may have instilled a sense of caution among investors regarding Bitcoin and the crypto market as a whole.
5. 18% in March 2023
During a compact seven-day span, Bitcoin underwent a notable decrease of approximately 18%. This timeframe was marked by increased market turbulence and apprehension among investors. The price drop can be attributed to the Federal Reserve’s hawkish stance and the collapse of Silvergate Bank, which had previously been favorable to cryptocurrencies.
6. Current Pullback
Bitcoin’s price has decreased by approximately 16% over the past eight days during this latest downturn, which marks the sixth significant dip since the 2022 bear market bottom. Although longer in duration, this decline is less severe compared to the one that occurred in March 2023. The causes behind this pullback include ongoing market instability due to tax season and geopolitical tensions, as well as the liquidation of heavily leveraged crypto positions.
Key Observations and Implications
1. Retracement Depth
The price of Bitcoin has generally pulled back about 20% after hitting bottom during the bear market, with only one instance of a 18% pullback. This pattern suggests a regular trend in Bitcoin’s price movements.
2.Duration
Some pullbacks in the cryptocurrency market have been short-lived, while others have persisted for weeks or even months. The varying durations highlight the unpredictable nature of this market.
3. Current Support
If Bitcoin can’t maintain its position above roughly $60,000 as a support level, Rekt Capital advises that the current downturn could worsen and last longer. This decline might even match or surpass the depths of the March 2023 market correction.
Current Bitcoin Price Action
Over the last day, Bitcoin’s value has dropped by 3.39%, now priced at $61,248.20. This downturn is more significant in the past week, where it has decreased by 13.51%.
Bitcoin remains the leading cryptocurrency, boasting a market value of approximately $1.2 trillion as of CoinMarketCap’s latest data. Notably, there has been heightened market activity in Bitcoin, resulting in a 7.85% surge in trading volume within the last 24 hours, amounting to around $42.3 billion.
The recent figures suggest Bitcoin has been declining over the last few days, potentially signaling market instability in the near future.
Conclusion
After the 2022 Bear Market, Bitcoin’s price has seen notable drops, creating hurdles and prospects for investors. To succeed in this dynamic crypto market and mitigate risks while seizing opportunities, it is crucial for investors to stay informed, exercise caution, and monitor vital support levels as they ride out Bitcoin’s price swings.
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2024-04-18 11:04