New Bitcoin (BTC) obituaries have been published by its detractors and the crypto community itself seems to be resigned that, yes, the market seems to have entered a bearish cycle after the biggest cryptocurrency on the market came to embitter losses above 50. % on from the all-time high price of $69,000.
The positive closes on Sunday and Monday are not evidence to the contrary, at least until BTC resumes some fundamental levels, several analysts point out.
With a long-term view, the pseudonymous analyst of the InvestAnswers channel looked in Bitcoin’s historical series for the answer that everyone is looking for right now: if, in fact, the market has plunged into a bearish cycle, when will it come to an end and the trend can it be reversed?
The analyst says that, in general, correction periods last for 89 days and the average devaluation of BTC hovers around 57% below historical highs. From this perspective, the pullback of the biggest cryptocurrency on the market may not be over yet.
Seventy-six days have passed since the last historic high. While the price has even dropped below 50% from its current record, at this point, changing hands at $36,440, Bitcoin is 47% below its highest price, according to data from CoinGecko.
The analyst also points out that the average time for Bitcoin to recover and reach a new all-time high after severe corrections is 257 days. Based on this indicator, a new all-time high for BTC can be expected between the end of July and the beginning of August this year.
However, these 257 days can be misleading as the 2013 to 2015 and 2017 and 2018 bear markets lasted 1,181 days and 1,079 days, respectively, until a new all-time high was consolidated. While those numbers drop sharply based on 2021, when Bitcoin recorded three all-time highs in an interval of less than eight months, or 240 days.
From the all-time high of $64,800 on April 14th to the bottom of $29,278 on July 20th, it took 95 days. Until the renewal of the historic high on October 20, 185 days. From there to the current price record of $69,000 it was just another 21 days.
These 257 days, however, are expanded by the 2017-2018 and 2013-2015 bear markets, which took 1,079 days and 1,181 days, respectively, to renew historic price records. The 2011 bearish cycle is in the middle ground, as it took 631 days before a new high was reached.
Excluding the two longest bearish cycles in history, the average time it takes for BTC to renew an all-time high in price is just 64 days. The analyst understands that this is the number that investors should be aware of, as the last bull cycle, probably ended in November last year, represents a change in Bitcoin’s market behavior. As other analysts had previously pointed out, cycles now tend to be longer and less defined:
“Are we going back to where we were 70 days ago – $68,800? Yes we are. I just don’t know when, but it could be soon because, historically, the rebound happens in 64 days. But that’s just numbers. History. I know. that things are much longer now. The cycles are longer, but also the markets rise and fall more frequently than ever before.”
The analyst also presents the main variable that is at stake in defining the timing of the market going forward: the review of the monetary policy of the US Central Bank (FED) with a tightening of monetary stimulus and a series of interest rate hikes throughout the year in an attempt to contain inflation in the US.
However, as Cointelegraph Brazil recently reported, markets would have already priced future Fed actions as they have been outlined for some time. Thus, there would be room for a recovery in the medium term and the current moment would be a unique opportunity to buy low.
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