Bitcoin Price Analysis: 6 Bitcoin Price Retracements from the Bear Market Analyzed

The crypto community is excitedly awaiting the upcoming Bitcoin halving scheduled in two days, on April 20, 2024. Investors are closely watching the price fluctuations of BTC amid the current cryptocurrency market crash. Rekt Capital, a well-known crypto trader and analyst, recently posted on X about the notable pullbacks that BTC has undergone since the November 2022 bear market. Let’s examine these pullbacks and what they mean for investors.

Understanding​​​​Bitcoin Withdrawals

Since the November 2022 Bear Market Bottom, Bitcoin has experienced several notable pullbacks:

1. -23% in February 2023

This period of decline lasted for 21 days and saw a 23% drop in Bitcoin’s price, indicating a phase of market adjustment and instability. US regulators caused a drop in Bitcoin price mid-month, following attacks on the crypto industry. Gary Gensler’s SEC crackdown on Kraken Exchange and Paxos sent shockwaves, but Asian markets, particularly in Hong Kong, showed bullish sentiment, leading to a recovery from the dramatic decline.

2. 21% in April/May 2023

This pullback, which lasted for a whopping 63 days, caused a 21% drop in Bitcoin’s price. The extended duration may have tested investors’ resolve and market sentiment. The price drop was caused by a large sales order and high UK inflation figures. The sell order at Binance caused Bitcoin to fall more than 3% to below $30,000, with further declines to $29,000. More than $25 million worth of bitcoin futures contracts were liquidated, with long positions accounting for 98% of the total. Analysts believe it was a leverage washout, with dire consequences also seen in ETH.

3. 22% in July/September 2023

Another prolonged retreat lasting 63 days occurred in the summer of 2023, with a similar magnitude of decline (-22%). This period likely reflects ongoing market uncertainty and external factors affecting Bitcoin’s price. Multiple reasons contributed to Bitcoin’s price decline, such as long-term investors cashing out profits, the impact of geopolitical tensions on market sentiment, and concerns about a possible government sale of Silk Road-related Bitcoin.

4. 21% in January 2023

The drop in the BTC price can be attributed to traders taking profits after the coin rallied more than 150% earlier in the year. This leads to large liquidations of bullish bets, reducing market leverage. The market also saw a downtrend due to an increase in open interest and positive funding rates in perpetual swaps indicating bullish leverage. In addition, the market anticipated US inflation data and the Fed’s final policy meeting of 2023 which could influence aggressive bets on rate cuts. This has added to investors’ cautious sentiment towards Bitcoin and the overall crypto market.

5. 18% in March 2023

A shorter but significant pullback lasting only 7 days, where Bitcoin experienced an 18% decline. This period may have been characterized by increased volatility and investor caution. The price fell due to a fake Federal Reserve, the collapse of crypto-friendly Silvergate Bank.

6. Current withdrawal

The ongoing pullback, the sixth major pullback since the 2022 bear marketbBottom, has seen Bitcoin’s price drop nearly 16% over 8 days. This drop, although longer, is shallower compared to the pullback of March 2023. The current pullback is due to continued market weakness attributed to tax season and geopolitical risks, as well as liquidations of leveraged positions in the crypto market.

Key observations and implications

1. Retracement Depth

Most of the pullbacks experienced since the bear market bottom have hovered around the -20% retracement depth, with one notable exception at -18%. This consistency indicates a repeating trend in BTC price fluctuations.

2. Duration

While some retreats were short, others lasted weeks or even months. The different time lengths highlight the volatile nature of the cryptocurrency market.

3. Current support

Rekt Capital warns that if Bitcoin fails to hold the ~$60,000 area as support, the ongoing pullback could potentially deepen and extend further, potentially matching or surpassing the March 2023 pullback lows.

Current Bitcoin Price Action

Bitcoin experienced a 3.39% drop in value over the past day to trade at $61,248.20 today. The decline has become even more noticeable in the last seven days, with a decrease of 13.51%.

Bitcoin continues to hold its position as the largest cryptocurrency, with a market capitalization of $1.2 trillion, according to CoinMarketCap. However, the coin experienced increased market activity with a 7.85% increase in trading volume over the past 24 hours, to $42.3 billion

These numbers indicate a downward trend for BTC over the past few days, which could indicate continued market volatility in the short term.

Closure

Since the 2022 bear market, Bitcoin has experienced significant pullbacks, presenting challenges and opportunities for investors throughout its journey. To manage risks and take advantage of opportunities in the changing crypto environment, it is essential for investors to stay well-informed, cautious, and watch key support levels while navigating the fluctuations of the cryptocurrency.