- Bitcoin reached a new all-time high of $69,170 on Tuesday before plunging 12% to $60,000, though such volatility is expected during bull markets.
- According to experts, the steep drop is normal and healthy as Bitcoin consolidates before attempting to break out to new highs again, a pattern seen previously.
- Despite short-term turbulence, analysts remain bullish on Bitcoin’s long-term trajectory given growing adoption and see dips as buying opportunities.
Bitcoin reached a new all-time high of $69,170 on Tuesday morning, sparking euphoria in the crypto community. However, the price then went into freefall, plummeting 12% to just above $60,000 in five hours. While concerning, such volatility is expected after reaching historic highs.
Major Corrections Common in Bitcoin Bull Markets
According to experts, the steep drop is normal and healthy for an asset in the midst of a bull market. Looking at Bitcoin’s climb to its previous all-time high of $20,000 in 2017, there were 13 corrections of 12% or more, 8 of which were over 15%. From March 2020 to April 2021, there were also 13 corrections of 10% or more during Bitcoin’s rise.
Bitcoin Likely to Consolidate Before Next Major Leg Up
Analysts say Bitcoin will likely consolidate and trade sideways for some time before definitively breaking through to new highs again. This consolidation period allows the market to cool off and build a base for further gains. The pattern of retesting prior highs before breaking out was also seen in late 2020.
Long-Term Bull Case for Bitcoin Remains Strong
Despite the turbulence, experts remain optimistic about Bitcoin’s long-term trajectory. The approval of Bitcoin ETFs and growing institutional adoption provide fundamental support. While volatility will persist, analysts view any major dips at these levels as buying opportunities for investors with a long-term perspective.
