While the price of Bitcoin (BTC) has corrected by more than 30% since its October record high, the asset is now recording its fourth consecutive week of decline. Although this is a first since July 2024, is it a reason to panic?
The price of Bitcoin (BTC) has fallen more than 30% since its ATH
On Sunday evening, the price of Bitcoin (BTC) closed a fourth consecutive weekly red candle, marking a first since July 2024.
At the time, this correction followed a rally from $27,000 to $73,000, in the wake of the euphoria surrounding spot Bitcoin ETFs. After a period of hesitation, prices then rose again after Donald Trump’s election, and a year later, we are now seeing a 31% correction from October’s all-time high (ATH):
During a profound directional change in a market, such as the transition from a bull market to a bear market, the danger is often that we realize too late that the pivot has taken place, after a significant downturn. In hindsight, however, it seems obvious that this is no longer a simple price correction, but indeed a new cycle. Moreover, the opposite reasoning is also possible for a transition from a bear market to a bull run.
While it is still possible that prices will rise again, there are a few important questions to ask yourself if your current positions are causing you stress. Despite all the uncertainty, you may, for example, ask yourself if you are prepared to accept that prices will fall even further to unknown levels for a long period of time before returning to their highs.
These periods of doubt are actually very formative and important for working on your risk management, and they also allow you to differentiate between investors who are in it for the long term, regardless of corrections, and those who are exposing themselves more than they should.
Here and there, we are beginning to see a few pseudo-experts, quick to point the finger at the slightest correction in BTC, as soon as it disrupts their own tolerance for volatility. Let’s remember that despite the criticism and its detractors, BTC has grown by more than 23,000% over the last 10 years and has always bounced back despite the number of times its demise has been predicted.
Whatever the short-term direction, this pattern is likely to repeat itself, as we are also seeing corrections on certain giants on the stock market, albeit to a lesser extent. For example, Amazon is down 14.66% from its ATH at the beginning of the month, Microsoft is down 15% from its July ATH, NVIDIA is down 15.7% from its October ATH, and Meta is down 25% from its August ATH.
