Chainfeeds Summary:
We've been marking the boat to find the sword again and again; is it time to buy at the buy the dips?
Article source:
https://forns.pro/article/detail/94661
Article Author:
Foresight News
Opinion:
Foresight News: For many traders, the $69,000 level carries the memory of the previous bull market, and breaking below it carries significant implications. In the historical narrative of the crypto market, the bottom of each bear market has been higher than the peak of the previous bull market—this is almost considered an ironclad rule. However, the market movement in 2022 challenged this cycle for the first time. After Bitcoin reached an all-time high in November 2021, it entered a long downward trend. This round of price action also broke below the peak of the previous bull market, a recurrence that seems to confirm that regardless of changes in the macroeconomic and market environment, Bitcoin's four-year cycle is still ongoing. Similar to the drop below $20,000 in 2022, the breach of the key psychological level of $69,000 is another blow to market confidence. The last time this peak was broken occurred in mid-June 2022, after approximately 220 days of decline from the high, when Bitcoin fell below $20,000, near the peak of the 2017 bull market. This market trend was characterized by a massive single-month drop; in June 2022, Bitcoin fell by nearly 43%, a rare monthly pullback in recent years. The impact of this event was immense. It meant that investors who bought near the peak of the 2017 bull market and held long-term were now facing losses for the first time. The long-held belief that "bear markets won't fall below previous highs" was shattered, cracks appeared in cyclical understanding, and panic spread rapidly. After the price broke through, the market didn't immediately find support; selling pressure continued, and Bitcoin's price continued to decline, reaching a low of approximately $17,600 around June 18th. At this point, market panic reached a peak. On-chain data showed that whale addresses began to reduce their holdings, and long-term holders also began to waver; various fear and greed indices pointed to extreme fear. This phase was characterized by a significant increase in trading volume accompanying the price drop, indicating that many investors chose to exit the market. The price collapse was not an isolated event, but rather the result of a concentrated outbreak of macroeconomic headwinds and internal industry risks. At the macro level, the Federal Reserve initiated its most aggressive interest rate hike cycle in decades to combat high inflation, rapidly tightening global liquidity. All risk assets, including US stocks and Bitcoin, faced valuation pressure. Under a strong dollar cycle, Bitcoin exhibited a high positive correlation with tech stocks such as the Nasdaq, entering a downward trend together. Simultaneously, the crypto industry experienced a concentrated outbreak of black swan events, from the Terra/LUNA crash to the liquidity crises and eventual bankruptcies of institutions like Three Arrows Capital and Celsius. Market leverage was rapidly eliminated, and the forced liquidations and liquidations of these institutions created a death spiral, providing direct selling pressure for the continued decline in Bitcoin prices. From falling below $20,000 in June 2022 to reaching the final low of approximately $15,500 after the FTX exchange crash in November of the same year, the market experienced a five-month period of bottoming out. During this period, prices attempted to rebound multiple times but failed to effectively stabilize above $20,000, indicating extremely fragile market confidence. The collapse of FTX was the final blow, completing the final deleveraging process in the market. A key signal is that despite the extreme panic triggered by the FTX crash, Bitcoin's price didn't fall significantly below the lows caused by the institutional liquidations in June, indicating a marked increase in market support within that range. It can be argued that the market completed a core asset turnover and stress test in the $17,000 to $20,000 range, subsequently entering a bottoming phase with gradually shrinking trading volume. A true bear market bottom is often not a precise price point, but rather a long and arduous period. After a sharp decline, the market typically enters a flattening phase with narrowing volatility and thin trading, and the market atmosphere shifts from panic to numbness and indifference. Only when macroeconomic expectations shift and a new narrative emerges will prices gradually recover and return to the key range; this process often takes months or even longer.
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