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Comparison of downward cycles; Has the price of Bitcoin fallen enough?

مقایسه چرخه‌های نزولی؛ قیمت بیت کوین به اندازه کافی پایین آمده است؟

Bitcoin market conditions have been very discouraging for investors over the past few months. At times, the price even fell to levels that were lower than the price of Bitcoin five years ago. Despite this, the long-term outlook of the market still shows the price growth of this digital currency in the long term.

To Report CryptoSlate If we take a look at the historical crashes and recoveries of Bitcoin, it becomes clear that the digital currency has set a new price record after the end of each bear cycle.

Bitcoin is currently trading at close to $19,300, which is roughly 72% lower than its peak of $69,000 last November (November 1400). Now, if we are to consider the distance from the historical peak of November 2021 to the recent bottom of the price in June 2022 (June), the magnitude of this drop reaches 75%.

Comparison of downward cycles;  Has the price of Bitcoin fallen enough?
Chart of Bitcoin price distance from historical highs (click on the image to view the index in Eurovision).

As can be seen from the graph above, in 2011, 2015, 2019 and 2020, falls of 75% or more occurred. These changes show the magnitude of Bitcoin’s historical volatility. However, in all these fluctuations, the price has continued to recover and the market has experienced new all-time highs.

The price of Bitcoin fell below the $20,000 support in late August. $20,000 is actually the high point of the 2017 bull market. Breaking the previous cycle high during this year’s bear market is unprecedented in the Bitcoin market. This is one of the reasons why investors are worried about the current price situation.

It is true that $20,000 is the peak of the bull market in 2017, but if we look a little more closely, the price was above $20,000 for only a few hours on December 17, 2017. In fact, the average price during the bull run of 2017 was somewhere between $8,000 and $10,000. For the years between 2018 and 2020, the average price was over $8,000.

As can be seen from the chart below, the price of Bitcoin has never moved too far from its 360-day moving average (MA 360 – purple line in the image) between 2018 and 2020.

Comparison of downward cycles;  Has the price of Bitcoin fallen enough?
Comparison of Bitcoin price and 360-day moving average.

The peak of $20,000 in 2017 was recorded far from the 360-day moving average of the price, and this means that the price of Bitcoin had artificially reached the peak of $20,000 at that time.

Looking at the average price and the position of the 360-day moving average at the end of 2017, it is clear that Bitcoin has returned to its average price in the $10,000 range after the effects of the artificial price pump have dissipated.

All the indicators examined in this analysis confirm the hypothesis that Bitcoin is doomed to experience lower price levels in its current path; Because breaking the historical peak of 2017 with the recent fall of the price below $20,000 is not entirely correct, and if we are to consider $10,000 as the average price of the bullish market in 2017, it should be said that Bitcoin is already at double the price. This amount is traded.

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