Bitcoin is now officially in another bear market after the crash that rocked the market last week. Investors across the space were pulling back from the digital asset due to this new price trend, after falling more than 70% from its all-time high. However, such trends are not new for bitcoin. Although the current market may look worse than the previous ones, as it is still going, there have been some brutal bear markets in the past.
A blast from the past
It can often be helpful to take a look at past market cycles for bitcoin to see if it is anything but normal. Yes, the bull and bear trend of this market has deviated from what has been recorded in history but it is still very much the same as what has been recorded before.
For Bitcoin, the choice between bears and bulls has always been a part of the experience. It has been through several of these boom-bust cycles over the 13 years of its existence and is not expected to change anytime soon.
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Bitcoin has lost around 73% from its most recent cycle peak so far but this is not the first time something like this is happening. Looking back at the market in November 2013, bitcoin actually continued to fall until it finally ended its 407-day loss streak, reaching 85% of its all-time high. was below %. This marked the end of that extended bull market.
For those in the market, the 2017 bull-bear cycle is fresh in their mind compared to 2013. However, as in 2013, the decline was just as brutal, albeit lasting less. What had lasted almost a year had ended with a poor performance of 84% of the bottom.
BTC bear markets are always brutal | Source: Arcane Research
As the digital asset continues to closely follow this trend, the decline is expected to continue. Based on the previous two examples, one can easily conclude that a historical movement would see bitcoin bottom out in the mid-80s. Thus, a bottom is most likely and the market is likely to see BTC at $11,000 before a market bottom expected at the end of 2022.
Will bitcoin follow?
While looking at past movements can help pinpoint the direction where the price of bitcoin may end up, there is always new information and events that can greatly affect it. For one, the macroeconomic environment has been a big player in the digital assets movement in recent terms. As with inflation, Fed rate hikes and fears of low liquidity in the market, Bitcoin was directly affected by this.
BTC enters bear market | Source: BTCUSD on TradingView.com
This has given rise to a more interconnected market when it comes to bitcoin and the broader financial markets. As the cryptocurrency space grows larger, it is experiencing greater impact from Fed decisions, stock market performance, US elections, and crypto regulations that are increasingly looming.
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Still, the long-term play is the best bet for Bitcoin. As sentiments run high, the bitcoin giants seem to freeze up and hibernate while waiting for the winter to pass. If history is anything to go by, the price of bitcoin could reach $200,000 in the next bull run.
Featured image from Forbes, charts from Arcane Research and TradingView.com
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