The Latest Bitcoin Correction Is Very Similar To Past Bull Cycle
Despite the latest up tick in Bitcoin price, BTC is still trading at more than $25,000 less than the local highs set earlier in the year, which means that bulls have a lot of ground to reclaim.
But, the latest correction has brought the current market cycle a lot closer to past bull cycle comparisons, which could further explain what’s left for Bitcoin in terms of price action in the months ahead.
Following a sharp more than 55% decline in cryptocurrencies the market is confused on whether or not the bull run has ended and if a new bear market has begun.
The standard definition of a bear market in “securities” is a 20% or more decline. By those standards Bitcoin is in a bear market every other week and has been in one since April 2021.
The recent massive dive was among the worst monthly declines on record and the most devastating Q2 in crypto history – and it might have been enough of a drop to prevent a full fledged crypto bear market.
But it also has brought prices back down to a level that’s a lot more on par with past bull market cycles.
The chart above prints an exact carbon copy of the 2016 and 2017 bull market, and juxtaposes it over the current market cycle. A similar parabolic curve is drawn to show the possible trajectory.
From 2015 through 2018, Bitcoin price grinded against the support curve the entire way up. There was very little divergence from the rounding, upward trending line.
Despite this recent market cycle is very different than the last, the recent 55% collapse has made things a lot more similar in scope.
Much like in early 2019 Bitcoin price deviated away from the curve, then overcorrected back down to it, the leading cryptocurrency by market cap could have done the very same thing from April through the recent bottom put in around the start of this month.
There’s still some room between today and the next bump into the parabolic curve. This could suggest there’s more sideways ahead, but further downside is likely limited thanks to what has already been a large enough correction.
