Bitcoin

Bull Market

April

Drops

Daily

<p>Bitcoin has recorded a significant price drop, trading more than 26% below its all-time high (ATH). Despite this, the drawdown remains historically shallow relative to past cycles.</p>
<p>As per the <a href="https://insights.glassnode.com/the-week-onchain-week-28-2024/" target="_blank" rel="noopener noreferrer nofollow">report</a> from GlassNode Insight, this contraction has placed a substantial volume of Short-Term Holder supply into unrealized loss, with over 2.8 million BTC now underwater based on on-chain acquisition prices. The analysis of current market dynamics and historical context provides valuable insights into Bitcoin’s performance and investor behavior.</p>
<h2 class="wp-block-heading" id="strong-price-performance-overview-strong"><strong>Price Performance Overview</strong></h2>
<p>Bitcoin experienced 18 months of steady price appreciation, reaching a peak of $73k with the introduction of spot ETFs following the collapse of FTX. However, this upward trend was followed by three months of range-bound price action. Between May and July 2024, Bitcoin underwent its deepest correction of the current cycle, <a href="https://studio.glassnode.com/workbench/bf532ce2-a66b-4798-6deb-bf3ba7decc59?&amp;utm_source=gn_insights&amp;utm_medium=insights_woc&amp;utm_campaign=woc_28_2024" target="_blank" rel="noopener noreferrer nofollow">recording</a> a drawdown exceeding 26% from its ATH.</p>
<figure class="wp-block-image"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXdxr-3oQ-F6xlFXT3klmL7BWWfFeyRi0EfLYi4cXIWiOKo-FQjyPzhoCL5tX6cQ0w59p0knFTlbZ3igR5_9xVwExxXlJxFSUoODGnvNG7see1gOSziQSVHWEq-wKGUB4XKbagoNkM9r_JXHEQUllxEm4OMK?key=FFzapI2mX3CaDFXh6mh5EQ" alt=" Bull Market Correction Drawdowns">
 <figcaption class="wp-element-caption">
  Bitcoin: Bull Market Correction Drawdowns
 </figcaption>
</figure>
<p>While significant, this contraction remains relatively shallow compared to previous cycles, such as the more severe corrections seen in 2018-21 and 2015-17.</p>
<p>This comparatively milder drawdown underscores a robust underlying market structure and a compression of volatility, reflecting Bitcoin’s maturation as an asset class. Despite the recent price declines, the overall resilience of the market suggests a strong foundation, even in the face of substantial corrections.</p>
<h2 class="wp-block-heading" id="strong-market-analysis-strong"><strong>Market Analysis</strong></h2>
<p>When analyzing Bitcoin’s performance relative to cycle lows and halving events, the current cycle is one of the worst <a href="https://studio.glassnode.com/workbench/e22ed211-2c1a-494b-7155-2ba302c7812f?zoom=all?&amp;utm_source=gn_insights&amp;utm_medium=insights_woc&amp;utm_campaign=woc_28_2024" target="_blank" rel="noopener noreferrer nofollow">performing</a> despite reaching a new ATH before the April halving.</p>
<h3 class="wp-block-heading" id="strong-post-halving-performance-strong"><strong>Post-halving performance:</strong></h3>
<ul>
 <li><strong>Epoch 2:</strong> +117%</li>
 <li><strong>Epoch 3: </strong>-7%</li>
 <li><strong>Epoch 4:</strong> +30%</li>
 <li><strong>Epoch 5:</strong> -13%</li>
</ul>
<figure class="wp-block-image"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXcL2oR3Cen8wHpK-xmcMWyrO2mxgjZvyptetYrpMrjz7kdrxXSxnzRRRQIjQrSg_r1ObKOoQTaRCU7YWgBiy69Li_a4snRiMkVHApi-AgZ5Kvak_6toM2rySRqGuKpOJeS_DiT8lOv5XRavFhn_0YTPq6Yf?key=FFzapI2mX3CaDFXh6mh5EQ" alt="Bitcoin: Price Performance Since Halving">
 <figcaption class="wp-element-caption">
  Bitcoin: Price Performance Since Halving
 </figcaption>
</figure>
<h3 class="wp-block-heading" id="strong-daily-drawdowns-exceeding-1-standard-deviation-strong"><strong>Daily drawdowns exceeding 1 Standard Deviation:</strong></h3>
<ul>
 <li><strong>2011-13: </strong>19 Events</li>
 <li><strong>2015-18:</strong> 27 Events</li>
 <li><strong>2018-21:</strong> 26 Events</li>
 <li><strong>Current Cycle 2023-24:</strong> 6 Events (to date)</li>
</ul>
<div class="wp-block-image">
 <figure class="aligncenter"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXeR7EaD4foc4MtUKYFQ_D9ZJvEfbANBlKLDwxkhzb3AOCOh418D5HdoGevDM_6AnzAHrRcu17fTIOmSXsdhPaxV1dLRIttDG9BltuwlMIanr-0BRUy7sB-1U-xi3g4HjL0FrwJuKHPckhOSvlwEi4Kryh3B?key=FFzapI2mX3CaDFXh6mh5EQ" alt="Bitcoin: Daily Price Performance&nbsp;">
  <figcaption class="wp-element-caption">
   Bitcoin: Daily Price Performance&nbsp;
  </figcaption>
 </figure>
</div>
<p>The current <a href="https://studio.glassnode.com/workbench/3a0ff755-8a22-449d-742b-cc3245305cbc?&amp;utm_source=gn_insights&amp;utm_medium=insights_woc&amp;utm_campaign=woc_28_2024" target="_blank" rel="noopener noreferrer nofollow">cycle</a> has seen 6 daily drawdowns exceeding 1 standard deviation below the long-term average. This indicates the 2023-24 cycle has been less volatile and shorter in duration compared to previous cycles, suggesting either a maturing market or potential for further investor activity.</p>
<h2 class="wp-block-heading" id="strong-investor-sentiment-and-losses-strong"><strong>Investor Sentiment and Losses</strong></h2>
<p>Recent market fluctuations have led Short-Term Holders to <a href="https://studio.glassnode.com/workbench/b2bf2df5-e55f-4417-7177-8544554aedbd?s=1499732542&amp;u=1720484542&amp;zoom=2555?&amp;utm_source=gn_insights&amp;utm_medium=insights_woc&amp;utm_campaign=woc_28_2024" target="_blank" rel="noopener noreferrer nofollow">experience</a> notable losses, with a significant event totaling approximately $595 million observed this week, marking the largest since the 2022 cycle low.</p>
<div class="wp-block-image">
 <figure class="aligncenter"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXfGTu8SoSlfmgA0jRGGRvqcyF787j4UiugNk_ZntJJBLQcSJvEE8tfk6hq0c9qcOgdCeZ1WCY4ixpS1Oedt97KejSpdDrDz9elOjCpHmsKNKTo3nKws0ixbqP2ujHOqi3O3pAdZwq79ikpbkjUz3rkuUmVs?key=FFzapI2mX3CaDFXh6mh5EQ" alt="Bitcoin: Entity-Adujusted STH">
  <figcaption class="wp-element-caption">
   Bitcoin: Entity-Adujusted STH Realized Loss Analysis
  </figcaption>
 </figure>
</div>
<p>Even while these losses are large in terms of money, as a percentage of total invested wealth, they are somewhat typical of corrections that occur during bull markets.&nbsp;</p>
<p>In contrast to major capitulation events like those in September 2019, March 2020, and May 2021, where losses accounted for over 60% of capital flows, the current event has had a less pronounced impact, comprising less than 36% of total Bitcoin network capital flows.&nbsp;This indicates a moderated impact on investor sentiment, akin to patterns observed during the market peaks of early 2021 rather than more severe capitulation events, suggesting resilience amidst market volatility.</p>
<p>Despite enduring its deepest correction in the current cycle following 18 months of upward momentum post-FTX, Bitcoin’s drawdowns remain favorable compared to historical cycles, indicating a resilient market structure.</p>
<p>While Short-Term Holders face significant unrealized losses, these have been relatively subdued relative to market size. Moreover, the reluctance of Long-Term Holders to sell at a loss suggests continued profitability among mature investors amid market volatility.&nbsp;Looking forward, the market’s robust foundation, bolstered by long-term investor stability, suggests potential resilience in navigating current challenges.</p>
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
 <p>Also Read: <a href="https://www.cryptotimes.io/2024/07/08/bitcoin-price-drops-4-to-55280-amid-mt-gox-sale-concerns/" target="_blank" rel="noopener noreferrer nofollow">Bitcoin Price Drops 4% to $55,280 due to Global Factors</a></p>
</blockquote>

Bitcoin Bulls Under Pressure as Price Drops 26% Below ATH

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The Crypto Times

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