Bull cycles are never up only.
As crypto holders panic over the latest drop in the market, it may be of some comfort to know that if this bull cycle is anything like the two previous ones, then the market may be taking a breather on its way up.
In the bull markets of 2017 and 2021, Bitcoin experienced eight and six pull backs, respectively. We are defining a correction, or pull-back, as a 20% or more drop within a 30-day period.
If we believe we are in a current bull market, and that the cycle started in March 2024 when we broke previous all-time highs, then we’ve had two corrections so far. Meaning there will likely be more dips down the line, but also that the top is not in yet.
Bitcoin suffered a 7% drop this week, falling to $56,600, and Ethereum plummeted 12% to $2,980 today. Other tokens have seen similar fate, with Notcoin shedding one third of its value in the past seven days, trading for $0.01, and Dogecoin dropping to $0.10, registering a 17% loss.
These heart-wrenching price movements, the latest of which occurred today as Mt. Gox. began payouts, have caused even the most seasoned trader to rush for the exits.
“Bitcoin takes the elevators up but the stairs down,” is a common adage that can be helpful to remember during days like today. However, and despite enthusiasts claiming the bull market is over, pullbacks are a normal, and natural, part of every upcycle.
2017 Bull Cycle
Between 2016 and 2017, Bitcoin soared from $1,000 to a high of $19,800 in a matter of ten months.
During the same period, Bitcoin’s price suffered six pullbacks in the double digits, however. The majority of these, in fact, were closer to 40% drops than the 21% that is currently plaguing Bitcoin and Ethereum on the monthly time frame–a reminder that these aren’t the most pain we have seen in recent history.
2021 Bull Cycle
Crypto’s bull cycle of 2021 followed a similar pattern.
After dropping to below $10,000, in July 2020 the price began its uptrend. Towards the end of the year, it broke through its previous all-time high, and consensus was that the bull run was here.
On its way to its new all-time high of $67,000–broken short by the crimes orchestrated by Sam Bankman-Fried–Bitcoin’s price suffered a plethora of dips. These included a sizable 50% drop in mid 2021, and more than six double-digit drops.
However, and after the near death knells brought on by infamous crypto characters like SBF, Do Kwon, Kyle Davies, and Su Zhu, token prices have recovered.
Maturing Market
While the specter of SBF and others continue to haunt crypto, the market has matured.
Now we have the titans of traditional finance buying and holding Bitcoin–with Blackrock and the ten other Bitcoin ETF providers holding more than 4% of the network’s 21 million supply. Ethereum’s own ETF looms on the horizon, and analysts expect its approval to take place on July 8.
Some of the most important investors in the world back the asset, and use-cases for crypto have skyrocketed. Tokenization of real world assets is happening at breakneck speed, the largest institutions in the world are experimenting with crypto payments, and every region in the world is seeing more crypto adoption.
But even as the crypto market has matured, some traders are painfully witnessing it’s still not exempt from volatility.
