Regarding this crash, many KOL compared it to 312 during the transition from the last bear market to the bull market.
Since many people have mentioned this, let’s review the trend of the crypto market before and after 312 (March 12, 2020).
The best way to review history is to look at the data.
Let’s take Bitcoin as an example to see what happened in the entire crypto market around March 12 of that year.
The above picture shows the trend of Bitcoin from May 2019 to July 2021. This is what I think is the most typical and characteristic trend in the entire 312 process.
During that bear market, Bitcoin reached its peak of $13,000 on June 27, 2019, and then plummeted from $7,900 on March 12, 2020 to $5,140 on March 13.
Since then, Bitcoin has started a round of vigorous bull market that will never come back:
On April 16, 2021, it reached the first peak of that bull market at $63,000;
Then it experienced a major correction, falling to as low as $30,000 in July 2021;
Finally, in November 2021, it reached the real peak of that bull market at $67,000.
Judging from these data alone, that round of 312 had the following characteristics:
1. After Bitcoin reached its high point ($13,000) in the last bear market, it has been in a volatile downward trend until the crash on March 12.
2. Before the 312 crash, the price of Bitcoin ($7,900) was almost only 60% of the bear market high ($13,000).
3. In the days following the March 12 crash, the price of Bitcoin was less than half of the previous bear market high ($13,000). The initial drop in this flash crash was more than 30%.
4. Was the $5,140 on March 13 the lowest point of the 312 crash? No, on March 17, Bitcoin further dropped to around $5,000.
5. Bitcoin only began to truly start a bull market after the collapse of 312. However, this process did not happen overnight. It still hovered below US$10,000 for more than half a year. It was not until October 2020 that it truly broke through the high of the previous bear market ($13,000).
6. In the subsequent bull market, before it really reached its peak in November 2021, the price of Bitcoin never fell below the price after the 312 crash. Even in the big correction in July 2021, Bitcoin only fell to $30,000 at its lowest, which was much higher than its high point in the bear market ($13,000).
Of these five characteristics, the first three are ones we can verify now, while the last three will take time to prove.
Before verification, let's take a look at the market situation before this flash crash:
In this round of bear market, Bitcoin has once reached a high of $73,000 on March 14 this year.
Before yesterday’s flash crash, the price of Bitcoin was $60,000.
After yesterday's flash crash, the price of Bitcoin once reached a low of $49,000.
Comparing these data with the first three of the five features above, we can find that:
Point 1 is barely close;
Points 2 and 3 do not quite match - the decline of this flash crash is much less than that of 312.
So I think this so-called "flash crash" is just a relatively normal and slightly larger decline in a bear market.
However, if this decline is really the last big drop in this round of bear market like 312, and the subsequent situation can really repeat the market situation after 312, it would be too far-fetched.
because:
After 312, Bitcoin's peak in the subsequent bull market was more than 10 times the level after the 312 flash crash.
Can this kind of growth be repeated in the next bull market?
If possible, this big drop should not make us pessimistic in any way, but should make us optimistic and excited.
"Disclaimer: This article does not constitute investment advice. Please learn and communicate with netizens, be rational, establish correct concepts, improve risk awareness, and abide by the relevant laws and regulations of the country and region where you are located."
