Prudence in peace and vigilance in danger: a review of the moments of collapse in BTC history

In BTC’s Bull Market, price fluctuations are violent and frequent. This article will explore the historical BTC drawdown and reveal the risk and investment psychology behind it. This article is from an article written by David Canellis and compiled by Vernacular Block. (Synopsis: Bull Market Guide for Old Birds: The higher the leverage, the sooner you take profit, and the potential coins are close all positions at a time) (Background added: Looking back at the encryption market over the past 4 years, where are we in the Bull Market? BTC’s violent fluctuations have long taught us to “go against the grain.” We seem to have become accustomed to the expectation that even in the stormy Bull Market, there will inevitably be a big pullback that shatters our hopes, dreams and wallet balances. Therefore, we all think that BTC suddenly dumps 50% on the way to a six-figure or even higher price, which is completely understandable. Is such an expectation justified? First of all, it needs to be clear that BTC does have a “tradition” of about 80% from the peak of the Bull Market to the bottom of the Bear Market. Since BTC first saw its massive rally in 2011, every cycle has been almost without exception. However, this article does not discuss drawdowns in the Bear Market (for this, refer to our previous analysis). Instead, we’re focusing on callbacks during the Bull Market, as we’re experiencing right now. The chart below shows the price performance of BTC over six different time horizons, ranging from three days to three months, and presented on a rolling basis, from the beginning of the cycle (trough) to the all-time high (peak). Each line represents a time span. For example, the dark purple line represents the percentage difference between each daily low and the opening price three days ago, while the green line represents a homogeneous comparison on a three-month cycle. The dotted line at the bottom represents the 50% retracement level. As the chart shows, there has never been such a large drawdown in the Bull Market from August 2015 to December 2017. The largest drawdown in the cycle occurred near the end of September 2017, with a 40% drop in two weeks. However, in the subsequent Bull Market from 2018 to 2021, it experienced three large callbacks of more than 50%. One of them was the pandemic-induced market crash in March 2020, when the stock market experienced a series of “Black Mondays” in succession. BTC has fallen 50% or more over almost all time horizons, with the exception of a three-month horizon of just under 50% at 47%. The other two large drawdowns occurred in May and July 2021, when BTC fell from an all-time high of over $60,000 to $30,000. However, over the next four months, BTC quickly rebounded to a new high of near $69,000. This time the pullback was relatively modest, with the most notable correction in the Bull Market coming in the first week of August. BTC has fallen 30% over multiple time periods, from a high of more than $70,000 in June to a low of $49,200. Of course, this does not mean that BTC has lost its volatility. I still think there will be ups and downs in the future. It is worth noting that the worst drawdowns in history tend to occur at the end of the Bull Market. Therefore, the longer the Bull Market lasts without a significant pullback, the more unsettling the uncertainty about the future direction is – which is where the unique “thrill” of investing in BTC lies. Related reports Inventory: What are the “old altcoins” that have reached new highs in this round of Bull Market? Investing in the Newbie Trap: Bull Market is difficult to exit, but keeping profits is king Under the surface of Bull Market, the hype pattern has changed: entertainment value determines future trends This article was first published in BlockTempo’s “Dynamic Trend - The Most Influential Block Chain News Media”.