Bitcoin has been on one of its longest downtrends yet. Although it has been recovering recently, there has not been enough upward momentum to truly guarantee that the market may be headed for another bull rally. Instead, the bear trends have continued to wax stronger, causing speculations about when the bottom might be in. This also raises the question of how low the price of the digital asset might go if it has not already touched its bottom.
When trying to pinpoint how far a digital asset such as Bitcoin might drop, it can often be helpful to look at how that asset has moved in the past. For Bitcoin, it is not hard to look through its historical data given that the cryptocurrency has been around for a little over a decade. Despite its relatively young age though, its previous market movements continue to provide a wealth of data when it comes to analyzing its movement patterns.
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Following previous bull markets, the price of bitcoin has fallen much lower than expected. An example is following the 2017 bull run that saw the price of the digital asset hit almost $20,000. What followed was a drawn-out bear market that would last for the next three years. During this time, the price of the digital asset would fall more than 80% from its all-time high, leaving it touching as low as $3,000, representing an 84% decline.
BTC continues recovery trend | Source: BTCUSD on TradingView.com
This was also the case during the 2013/2014 bull rally when the price had touched above $1,100 at its peak and subsequently dropped to less than $150 at its lowest. Given this, it’s possible that the current price of bitcoin may not be the end of the bear trend.
Given the analysis above, a further downtrend could be in the near future for bitcoin. That is taking into account that the market does devolve into a full-blown bear market. What this would mean is that the bottom may be not $20,000 for the current trend as is widely believed.
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If bitcoin followed its previous price movements, an 80% drop from the all-time high value would mean that the digital asset would be touching at least $13,000 before the bear market is over. This would be well below expectations for the digital asset.
Nevertheless, bitcoin continues to fend off the bears. Monday morning saw the digital asset rise above $30,000 once more and with more momentum expected following the opening of the trading week, the cryptocurrency may be well on its way to testing $35,000.
Featured image from DailyFX, chart from TradingView.com
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