A friend in need is a friend indeed; true gold is revealed in times of crisis.

The positions that can be held for a long time when the market plummets are the most worthwhile positions; the assets that are still willing to be held firmly are the most valuable assets. The recent spike and wash of the crypto market and Bitcoin is such a process of seeing the real gold (BTC) in a big drop.

In this reshuffle, BTC reached a high of $70,000 on July 29 and a low of $49,000 on August 5, a drop of just over -30%. The highest and historical high of the year, $73.8k on March 14, only saw a drop of -33.7%.

This is certainly not as good as the -55% retracement of "519" in 2021 (from 64.8k on April 14 to 29k on May 19), and it is even worse than the -62% retracement of "312" in 2020 (from 10k on February 13 to 3.8k on March 13).

Perhaps the ETF has done something amazing? Surprisingly, BlackRock’s spot BTC ETF remained as stable as a rock despite the sharp drop, with no net outflow for two consecutive days.

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Let's look at other assets.

Let’s first take a look at the king of altcoins - ETH.

Although ETH's ETF has also been approved, how effective is the buff since it has just been approved? Let's take a look at ETH's performance during this big drop: from 3563 on July 22 to 2085 on August 5, the drop is -41.5%. Pulling to the highest point of the year (but not the historical high) on March 12, 4093, the drop widened to -49%.

What about "519" in 2021, when ETH's retracement was close to -60% (from 4372 on May 12 to 1764 on May 19); and "312" in 2020, when it was close to -70% (from 286 on February 19 to 87 on March 13).

Look at the performance of ETH ETF in the recent two-day crash. A solid net inflow! ETF buff is really great, right?

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Okay, then let’s find another asset that does not have an ETF buff but has experienced “312” or “519” for comparison.

doge

It fell from 0.144 on July 22 to 0.08 on August 5, close to -45%. It reached its highest point of 0.229 on March 29, and the decline widened to -65%. In comparison, the 2021 "519" was -72% (from 0.74 on May 8 to 0.21 on May 19), and the 2020 "312" was close to -70% (from 0.00364 on February 9 to 0.0011 on March 13).

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From 12 on June 17 to 4.7 on August 5, the decline was over -60% (-60.8%). Pulling to the highest point of the year on March 6, 17, the decline widened to over -70% (-72.4%). In comparison, the "519" in 2021 was -64% (from 45 on May 3 to 16 on May 19). Of course, May 19 was not the low point, until 13 on May 23-24, it was the low point, but the decline did not expand too much, that is, it expanded to over -70% (-71.1%).

By reviewing and replaying the actual data, we can intuitively draw two conclusions:

1. August 5th This wave of reshuffle was relatively clean and thorough, at least for the copycats.

Second, the existence of spot ETFs does play a buffering role, such as a buff or a safety cushion. For an impact of this magnitude, it can absorb and resolve a decline of about 20-30%.

That is to say, if there is no ETF, and the intensity reaches "519" or "312", BTC should fall to about $30,000. This point of $30,000 happens to be the current robust support level of the power law. As for ETH, it can be roughly estimated to be around $1,000-1,500.

In addition, as for many friends asking, after such a sharp drop and reshuffle, will the market start to rise from then on, or will there be a risk of a second or even third backtest?

The macro factors are uncertain. Historically, the 2020 "312" is the former case (after September 2020, BTC has never returned to four digits, that is, it has never fallen below $10,000), and the 2021 "519" is the latter case. If the time and space position of 2024 in the BTC cycle is closer to 2020, then in terms of probability, the possibility of rhyming with "312" may be greater.

Perhaps, not long from now, starting from a certain month, BTC will never return to its current five-digit level, that is, it will never fall below $100,000 again.