Bitcoin's Price Volatility During Bull Markets
According to Blockworks, Bitcoin's price volatility is a well-known characteristic, often leading to significant corrections even during bull markets. Historically, Bitcoin has experienced substantial drawdowns, with prices dropping by about 80% from peak to trough in bear markets. However, this article focuses on the corrections that occur during bull markets, which are currently being observed.
In past bull markets, such as the one from August 2015 to December 2017, Bitcoin did not experience drawdowns of 50% or more. The largest correction during that period was a 40% retracement over two weeks in September 2017. In contrast, the bull market between 2018 and 2021 saw three corrections of more than 50%, including the significant market crash in March 2020, coinciding with global financial turmoil. During this crash, Bitcoin's price halved across most timeframes, except for a three-month period where it dropped by 47%.
Other notable drawdowns occurred in May and July 2021, when Bitcoin's price fell from over $60,000 to $30,000, before recovering to nearly $69,000 over the following months. The current bull market has been relatively calmer, with the most significant correction occurring in early August, when Bitcoin's price fell by 30% across various timeframes, dropping to $49,200 from over $70,000 in June.
Despite these fluctuations, Bitcoin's inherent volatility remains a constant factor. Historically, the most severe drawdowns have occurred towards the end of bull markets, suggesting that the longer the market goes without a major correction, the more likely it becomes. This pattern adds an element of unpredictability to Bitcoin's price movements, keeping investors on edge.