- Bitcoin has seen over 120% growth in 2023, signaling potential start of a new bull run
- However, history shows large inclines are typically followed by corrections as part of the normal market cycle
- Past data shows corrections of 30%+ are common, often tied to factors like profit-taking and leveraged position liquidations
Bitcoin has seen robust growth of over 120% year-to-date in 2023, potentially signaling the start of a new bull run. However, history shows that such inclines are typically followed by market corrections as part of the normal market cycle.
The 2023 Correction So Far
In 2023 alone, the most significant correction was a 20% decline in July when Bitcoin’s value dropped from $31,000 to $25,000.
Historical Precedents for 30%+ Corrections
Delving into historical data, during the China mining ban in 2021, a sharper correction of 50% was seen from Bitcoin’s previous all-time high.
The 2020 Covid-induced market crash was an outlier. Outside of that, trends from 2015-17 and 2011-13 cycles show multiple corrections of over 30%. These are often tied to factors like profit-taking and liquidation of leveraged positions.
While Bitcoin’s ascent in 2023 is promising, investors should expect periodic corrections as a normal part of market cycles. These can contribute to the overall health of the market.