Just weeks after enjoying an unimaginable ATH, Bitcoin (BTC) fell by 17%, making this the shallowest correction of the year so far.
Looking at previous bull market cycles, there is a history of measurable correction phases before a rally towards the end of the year; and if history is anything to go by, then a potential rally could be on the way.
The impact of the correction has been felt by the crypto ecosystem after the all-time-high of $69,000 on Nov 10 retreated to the current levels by about 17%.
Mainstream media outlets such as Forbes are viewing this pullback as markets plunging into bearish territories with the unforgiving headline “Did Bitcoin Enter a Bear Market after Falling 20% From Its ATH?” on an article published on Tuesday.
Despite these bear sentiments, it is good to dig deeper into BTC’s past corrections and compare this to its previous performances. The strongest correction this year has to be the one between April and July that ran for three months and accumulated a whooping 53.4% plunge. September’s correction comes in as a close second after pulling back by 37% from the ATH of April. This goes to show that November’s dip was actually the weakest correction of 2021.
Analytics provider, Glassnode, noted in its Monday “Week On-Chain” report that this 17% correction is nothing but “business as usual for Bitcoin hodlers,” and it might be over sooner than most expect. Glassnode also affirmed our sentiments by pointing out that the correction we are witnessing is “actually the least severe in 2021.”
Bitcoin hodlers are aware of the growing situation of the stock market plunge due to COVID-19 Omicron variant, but this does not stop them from expecting the famous ‘Santa Claus rally.’ This is a stock market term that denotes when prices rise during the last five trading days in December and the first two trading days in January. The same has been seen in crypto markets in previous years and the term is often used to alert crypto traders of the usual price rising of December.
Looking at 2020’s Santa Claus rally, there was a 47% surge in BTC prices throughout December. The December 2017 rally was the most epic BTC pump at the time with an 80% gain to reach a new all-time high at the time. The two surges were in bull markets like today, so it’s just a waiting game for further price gains; that is, if history truly rhymes.
Image courtesy of pixabay
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