Bitcoin (BTC) recently experienced a 26% drawdown, sparking speculation about whether this is just a mid-bull correction or the beginning of a larger decline. Glassnode analysts projected that BTC could bottom out above $70,000 if the decline continues. This has raised concerns about whether BTC is out of the woods or if more pain lies ahead.
Historically, BTC has seen more severe drawdowns during bear market phases, with drops of over 80% lasting 6-12 months after hitting a price peak. Currently, BTC has declined about 30% over the past 3 months, leading some analysts to predict a potential larger correction lasting 3-9 months. However, given the rising 200-weekly Moving Average support at $45,000, an 80% drop to $21,000 seems unlikely.
On the other hand, some analysts believe that the current drawdown might be less severe due to market maturation. Glassnode expects a potential bottom between $74,000 and $70,000, with significant buying interest in that range. On-chain analyst Axel Adler also sees BTC in an accumulation phase, suggesting that the correction phase may be coming to an end.
Despite some investors showing confidence in bidding at the current levels, Julio Moreno warns that bullish indicators have yet to fully improve for BTC. This suggests that the bottom may not be fully marked, leaving room for further downside potential. It is uncertain whether the current drawdown is just a mid-bull correction or the start of a larger correction.
In conclusion, the current 30% drawdown in BTC is relatively mild compared to past bear market phases that saw an average 80% price drop. This could indicate that the current pullback is a temporary setback before another leg up in the bull market. However, if bullish conditions do not improve, the drawdown could escalate into a larger correction. The future of BTC remains uncertain, with analysts divided on whether the worst is over or yet to come.
