A relief rally keeps the macro-bull intact in Bitcoin. But in any case, the recent slowdown was the smallest of 2021 so far.
After hitting a new all-time high of $69,000 on November 10th, Bitcoin has entered a downtrend. The 9% swing to the downside on Friday generated nervousness across the market, but strong support at the $53,800 level proved good for bulls.
Since then, two new tests for $53,800 have also held firm. Crypto YouTuber Lark Davies observed that the latest bounce keeps a five-month uptrendline alive. Which implies that, despite the uncertainty of the past few days, macro-bull is still on the right path.
As commented in the tweet from Crypto YouTuber Lark Davies:
WOW!!! #bitcoin just jumped off an insane trendline retest!
Since the trend of falling from its historic record, sentiment has also dipped, turning into fear on the weekend. Currently, the Fear & Greed Index gives a reading of 33, slightly above yesterday’s rating of 27. But still characteristic of shaky market sentiment.
As the CEO of IOHK, Charles Hoskinson, mentioned at the onset of the recession a week ago, focusing on short-term price action and panicking is the wrong approach to take.
What Hoskinson is asking for is a greater focus on the big picture, which he says is the eventual adoption of cryptocurrency on a massive scale. While he couldn’t put a price on it, as far as the ADA is concerned, if that happened, early investors (and hodlers) would be better off in the long run.
How the recent Bitcoin slowdown compares to others in 2021
While the recent sell-off may have created fear in certain sections of the crypto community, as far as sales are concerned, it was the least severe in 2021.
The analysis of glassnode analyzed the downgrades from the maximum historic (ATH), to calculate a percentage for each sale off in 2021. The recent November downgrade came in at just -21.8%, the smallest drop by this criterion.
#Bitcoin traded at -21.8% drop in ATH during this month’s correction [sic]. It may come as a surprise that this correction is actually the least severe in 2021, measured in terms of ATH reduction
The other withdrawals in 2021 show January, February, April and September ranging from -24.2% to -37.2%. With the May-July settlement counting as the most severe, at -54%.
The May-July period was triggered by a series of adverse reports, starting with Elon Musk’s turnaround in Bitcoin, due to a belief that Bitcoin mining is highly polluting. During this period, the other prominent piece was the China stepping up anti-crypto movements, including a mining ban and other restrictions on retail cryptocurrency merchants.
Although Bitcoin’s trendline remains intact, sentiment will not change until the price goes back above $59,000. However, today’s rally was a welcome relief for those worried about the end of the bull cycle.