Bitcoin price is still trading more than $ 25,000 less than local highs earlier this year, and the bulls have plenty of ground to take.
The lost ground couldn’t be all that bad, however, as it has brought the current market cycle much closer to comparisons of past bull cycles, which could shed some light on what remains of Bitcoin in terms of price movement in the months ahead.
Bitcoin collapse brings market cycle on par with previous bull run
After a sharp decline of more than 55% across the board in cryptocurrencies – even with the top dog Bitcoin – the market is inconsistent about whether the bull run is over or not, whether a new bear market has begun.
The standard definition of a bear market in “stocks” is a decline of 20% or more. By these standards, Bitcoin has been in a bear market every other week and has been in one since April 2021.
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The massive slump was among the worst monthly declines on record and the most devastating second quarter in cryptocurrency history – and it could have been one drop enough to prevent a full-blown crypto bear market.
It has also brought prices back down to levels much more in line with past bull market cycles.
The recent crash put this cycle on par with the last | Source: BLX on TradingView.com
Will the parabolic curve in crypto behave the same again?
The graph above takes an exact copy of the 2016 and 2017 bull market and contrasts it with the current market cycle. A similar parabolic curve is drawn to show the possible trajectory.
From 2015 to 2018, Bitcoin price dragged all the way up against the support curve. There were very few deviations from the rounded, upward-trending line.
Related reading | Why the next bitcoin bear market will be the worst yet
There’s no denying that this latest market cycle is very different from the last one, but the recent 55% plunge has made things much more similar in scope.
Similar to how Bitcoin price deviated from the curve in early 2019 and then over-corrected again, the leading cryptocurrency by market capitalization could have done the same from April through the recent low hit earlier this month.
There is still some space between today and the next push into the parabolic curve. This could suggest that there is more sideways movement, but further downward movement is likely limited thanks to the correction that is already large enough.
consequences @TonySpilotroBTC on Twitter or over the TonyTradesBTC telegram. The content is educational and should not be viewed as investment advice.
Featured image from iStockPhoto, Charts from TradingView.com