Key facts: According to Glassnode, the market is showing a more mature and solid structure. The BTC price is recovering from its biggest drop in the current cycle. Currently, the price of bitcoin (BTC) is up 250% from the cycle bottom reached a year and a half ago in 2022. This is despite the decline it experienced from the new all-time high of $73,700 (USD) reached four months ago. In this way, it presents a high similarity with its historical performance. “If we evaluate the price behavior in relation to each cycle low, the 2023-2024 market has behaved surprisingly similarly to the last two cycles,” said the analysis firm Glassnode in this regard. These are the cycles that occurred from 2015 to 2017 and from 2018 to 2021. The similarity is exhibited in that, for the first year and a half of such cycles, bitcoin also recorded an increase of almost 250% as in the current one. In addition, in each of them it showed such performance despite a momentary setback, as seen in the following graph.
Bitcoin price performance since its cycle low. Source: Glassnode. “The reason bitcoin follows such a similar path is a topic of regular debate, but it still provides a valuable framework for analysts to think about cycle structure and length,” Glassnode noted. If history continues to repeat itself, then The price would recover from the current decline in the coming months.. Beyond the similar percentage increase, the market shows differences in terms of its setbacks. Last week, the currency fell to USD 53,000, registering a 26% drop from the historical maximum, which It is the biggest correction of the current cycle. In contrast, in previous cycles, there have been deeper declines. As can be seen below, in the cycle from 2015 to 2017, bitcoin saw declines of up to 36% and, in 2018 to 2021, of up to 63%. Therefore, there is less selling pressure in this cycle compared to previous ones.
Corrections during each Bitcoin bull cycle. Source: Glassnode.
Glassnode adds: “This downtrend has been noticeably shallower than previous cycles, highlighting a relatively strong underlying market structure and volatility compression as bitcoin matures as an asset class.” Glassnode, an on-chain research and market analytics firm.
Further declines would not mean the end of the Bitcoin bull cycle
Something to consider also is that, During the previous three bull cycles of Bitcoin, the price experienced between 19 and 27 drops below the long-term average. In contrast, in the current one, there have only been 6 so far, so new setbacks later would not necessarily represent the end of the upward trend. “This would suggest that the current cycle has been noticeably shorter and less volatile than previous cycles, or perhaps there is more fuel in the tank of investors,” commented Glassnode. In turn, the price movement before the last halving also denotes differences in relation to the three previous ones that occurred in history. In fact, the performance since such an event, which occurred three months ago, is the worst so far with a drop of 13%. Although it is distinguished by being the first time that it reached a new historical maximum in the previous one. It should be noted, however, that In the same duration since each halving, various movements have been formed. After the first three months since the first one in 2012, the price rose 117%, while it fell 7% compared to the second in 2016 and increased 30% in the following one in 2020.
Bitcoin price movement since each halving. Source: Glassnode. Despite such differences, all previous cycles culminated the bullish cycle around a year after the halving. In this sense, if this pattern continues, bitcoin would reach new price records, something that can be promoted by the US policy reported by BitcoinDynamic, with the drop in interest rates and the presidential elections this year.