Bitcoin (BTC) prices during the coldest winter in crypto history have been very discouraging for investors. At specific points, the prices were lower than they were almost five years ago. Nevertheless, this doesn’t mean that the Bitcoin price is degrading if we zoom out.
If we look at significant price drops and Bitcoin’s recovery rates throughout its history, it becomes clear that Bitcoin recorded new highs at the end of each bear cycle.
Bitcoin’s current price lingers around $19,300, which is about 72% from its all-time high (ATH) recorded on Nov. 10, 2021, at $69,045. However, it can be said that this change is relatively normal for Bitcoin since it went down around 75% to fall as back as $17,600 in June 2022.
Bitcoin: Price Drawdown from ATH (Source: Glassnode)
As can also be seen in the chart above, the same 75% or more drop was also recorded in 2011, 2015, 2019, and 2020. These changes indicate a significant amount of volatility. However, the Bitcoin price prevailed each time and recovered to record new highs.
Bitcoin price broke its infamous $20,000 support in late August 2022. The $20,000 was the ATH point of the 2017 bull run. Breaking a peak of a previous bull run is something Bitcoin never did before, which might agitate investors.
Is $20K the correct benchmark?
$20,000 was indeed recorded as the ATH of the 2017 bull run. However, when examined more closely, it becomes apparent that the Bitcoin price was only $20,000 for a couple of hours. The average price of the 2017 bull run peak was between $8,000 and $10,000.
For the years 2018 to 2020, on the other hand, the average price is just above $8,000. The peak price level on Dec. 17, 2017, was $20,000. This lasted for a brief couple of days, and the price went back to $10,000 by early Jan. 2018.
As a result, the average price between 2018 and 2020 appears as nearly $8,800, which would be the correct benchmark to consider.
The 360-day-moving average chart for Bitcoin shows that the BTC price doesn’t deviate far from the 360 DMA from 2018 to 2020.
Bitcoin Day Moving…..