Bitcoin has once again faced a major correction, dropping by nearly 20% in the aftermath of the FTX collapse. This marks the sixth significant correction since November 2022, highlighting the cyclic nature of market health adjustments in the world of cryptocurrency.
These corrections, although they may cause concern among some investors, are actually quite common in bull markets. They play a crucial role in maintaining the overall health of the market by flushing out leverage and ensuring that prices remain stable in the long run.
Looking back at previous corrections, we can see a pattern emerging. The first notable correction in this cycle occurred during the Silicon Valley Bank collapse in March 2023, with Bitcoin experiencing a 23% drop from over $25,000 to below $20,000. Subsequent corrections followed in April and May 2023, and in the summer of 2023, each ranging from 17% to over 21%.
In January of the following year, Bitcoin corrected over 21% following the ETF launch, dropping from around $49,000 to below $40,000. Another significant correction took place from March to May 2024, with Bitcoin falling by roughly 24% from its all-time high of over $73,000 to around $56,500.
The most recent correction, which began on June 7, 2024, saw Bitcoin decline by nearly 19% from approximately $72,000 to below $59,000. While these fluctuations may be unsettling for some, they are an inherent part of Bitcoin’s market cycles and are necessary for its long-term stability.
As we continue to navigate the ups and downs of the cryptocurrency market, it is important for investors to remain informed and vigilant. By understanding the patterns of market corrections and staying updated on the latest insights and trends, investors can make more informed decisions and navigate the volatile market with confidence.