Since the bear market in 2022, bitcoin (BTC) has witnessed substantial pullbacks, losing up to 23% of its value on some occasions. Understanding the depth of these declines could help investors maximize their returns, as rebounds from these drops usually yield substantial gains. According to a tweet by crypto trader and analyst Rekt Capital, accumulating BTC after a pullback of approximately 20% could fetch investors good money as the crypto asset resumes its upward trajectory. Bitcoin’s Pullbacks in This Cycle 2022 was a tough year for BTC as the asset suffered the pangs of the bear market. The collapse of the TerraLuna ecosystem, with the contagion that ensued, wiping out roughly billion and dragging many crypto firms into bankruptcy, and the crash of FTX, one of the
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Since the bear market in 2022, bitcoin (BTC) has witnessed substantial pullbacks, losing up to 23% of its value on some occasions. Understanding the depth of these declines could help investors maximize their returns, as rebounds from these drops usually yield substantial gains.
According to a tweet by crypto trader and analyst Rekt Capital, accumulating BTC after a pullback of approximately 20% could fetch investors good money as the crypto asset resumes its upward trajectory.
Bitcoin’s Pullbacks in This Cycle
2022 was a tough year for BTC as the asset suffered the pangs of the bear market. The collapse of the TerraLuna ecosystem, with the contagion that ensued, wiping out roughly $40 billion and dragging many crypto firms into bankruptcy, and the crash of FTX, one of the largest centralized exchanges at the time, caused BTC to plunge to $16,600, a level it had not seen since November 2020.
After the bear market bottom of 2022, BTC recorded a 23% plunge in February 2023. Between April and May of the same year, the leading cryptocurrency witnessed another 21% decline.
In addition, July and September 2023 also saw BTC plummet by 22%, marking the final massive drop before the year ended. BTC rallied for the rest of 2023 until mid-January 2024 due to heightened excitement and anticipation surrounding the approval of the first wave of spot Bitcoin exchange-traded funds (ETFs) in the United States.
BTC Could Fall Another 18%
Then came 2024, where BTC saw its first substantial plunge of 21% in January after U.S. authorities greenlit the spot Bitcoin ETFs, rumored to be a sell-the-news event.
Following a major rally driven by inflows into the ETFs, BTC plunged again in March, losing 18% of its value. The downtrend saw bitcoin tumble from an all-time high of $73,700 to $61,900. Since the fall, BTC has struggled to move past $71,000, and the cryptocurrency has dumped another 18% this month.
Rekt Capital said the closer BTC gets to a 20% fall, the better the bargain-buying opportunity. The primary cryptocurrency is currently consolidating between $60,000 and $70,000, indicating that there could be another 18% decline if it revisited the $70,000 resistance and got rejected there.
“Once again, this cycle has shown that accumulating after any pullback close to -20% has yielded solid returns later on. So the next time a similar pullback occurs, it will be a must-take opportunity,” the analyst added.