Bitcoin hits $92,000 amid sell-off: Was the 30% crash expected?

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Bitcoin hits $92,000 amid sell-off: Is a 30% crash possible?
Bitcoin hits $92,000 amid sell-off: Is a 30% crash possible?
December 20, 2024
Today, Bitcoin plummeted from $102,748 to $92,175, a drop of 10.3% in the past 24 hours.
The development has sparked discussion within the community, with analysts drawing parallels to previous market cycles. Historical trends show that Bitcoin tends to experience significant pullbacks within a few weeks of its price discovery phase. That has raised concerns that the current downturn may be just the beginning.
Historical Insights from Bitcoin Corrections
Crypto analyst Rekt Capital noted Bitcoin’s pattern of sustained correction after entering a price discovery phase. He mentioned that in 2013, Bitcoin experienced six weeks of upward momentum before facing its first major correction in the seventh week.
Similarly, during the 2017 bull cycle, after seven weeks of continuous gains, a retracement of 34% occurred in the eighth week. Likewise, in the 2020/2021 cycle, Bitcoin rallied for six weeks in a price discovery phase before a significant 16% pullback occurred.
Rekt Capital pointed out these patterns, stating:
“We are now in week seven.” This means that the current correction is in line with historical trends and a major pullback could be brewing.
Will Bitcoin see a correction of 20-30%?
During the discussion, well-known crypto futures trader Satoshi Flipper stressed the importance of studying historical patterns. He warned that a strong correction during Bitcoin’s price discovery phase is realistic.
Notably, Bitcoin entered its price discovery phase in the second week of November after Donald Trump won the presidential election. Since then, the asset has seen consecutive new price peaks, with only a few pullbacks at 3%.
Meanwhile, Satoshi Flipper reminded market participants that a 20-30% crash in Bitcoin is realistic. Specifically, he noted that a 20% drop from Bitcoin’s recent high of $108,000 would take it down to $87,000, while a 30% retracement could lead Bitcoin to $76,000.
Currently, Bitcoin has fallen about 15% from its all-time high at $92,000 and has recovered to $95,000 at press time, although dangers remain.
Can Bitcoin defy historical trends?
Recent analysis by Glassnode shows that Bitcoin’s average returns and volatility in the current cycle are lower than in previous cycles.
For example, in the 2018-2022 cycle, Bitcoin grew 10.47 times, while in the current season it grew only 598%. Likewise, this period is the least volatile, with an average drawdown of -7.68% and a maximum drawdown of -26.25%. The minimum retracement in the previous cycle was 26% and the maximum collapse was 72%.
According to the report, this stabilization indicates that Bitcoin is transforming into a more mature and institutional asset, making the possibility of a crash like the last cycle less likely.

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