Bitcoin plunged on Tuesday shortly after the number one cryptocurrency by market capitalization hit a new all-time high of $69,170 earlier that morning.
The weeks-long climb in Bitcoin’s price, sparked largely by the approval of Bitcoin ETFs in January, pushed Bitcoin past its all-time high set in November 2021. Crypto Twitter was in a state of euphoria—before the price of Bitcoin went into freefall.
According to CoinGecko, Bitcoin plummeted 12% to just above $60,000 in five hours. It’s shakily recovered somewhat to trade at $63,515 at time of writing. While harrowing, the post-peak dip is not entirely unexpected.
When today’s market volatility is compared to previous all-time highs for Bitcoin, analysts say today’s wild price movements are par for the course.
“This is likely the beginning of a lot of volatility as we go up,” Alex Thorn, Head of Research at Galaxy, told Decrypt.
“The common phrase is that bull markets climb a wall of worry,” he continued. “Looking at 2017 and seeing eight drawdowns of 25% or more on the way to all-time highs, that looks like a wall of worry to me, so I’m not concerned.”
As Thorn explained, in 2017—from January 1 to the all-time high of $20,000 on December 17— there were thirteen corrections of 12% or more. Of those, twelve were 15%, and eight were steeper than 25%. In a bull market, experiencing significant price corrections on the ascent is completely normal, Thorn said. These market movements are not linear.
He also highlighted the surge in price action after the start of the COVID-19 pandemic from March 2020 to April 14, 2021; there were also 13 corrections of 10% or more, seven of which were 15% or more.
“Remember that in Dec. 2020, BTC touched its prior all-time high of [$20,000] twice, then ranged and traded -11.3% lower over 15 days before definitively breaking ATH,” Thorn posted on Twitter. “[It’s] likely to look similar here, and some consolidation would be healthy after +62% YTD / +77% from YTD low (Jan 23).”
To Thorn’s point, on December 14, 2017, Bitcoin reached $17,978, followed by another high of $19,423 on December 16.
On November 7, 2021, Bitcoin hit its most recent all-time high of $63,153, followed by another all-time high of $67,617 on November 8.
“Bitcoin has a robust history of volatile price cycles and nonlinear bull markets,” he said.
Edited by Ryan Ozawa.
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