• BTC Dominance: %
XBT.Market
Advertisement
  • Home
  • Coins MarketCap
  • Crypto Exchanges
  • Crypto Calculator
  • Top Gainers and Loser
  • News
  • Contact Us
No Result
View All Result
XBT.Market
No Result
View All Result
Home Bitcoin

When Will The Bear Market End?

Jon Hartney by Jon Hartney
July 12, 2022
in Bitcoin, Blockchain, Business, Market
0
189
SHARES
1.5k
VIEWS
Share on FacebookShare on Twitter

A look at previous bitcoin bear market cycles shows two distinct phases of capitulation and can give insight into how much longer the bear market will last.

Related articles

Bitcoin derivatives data shows room for BTC price to move higher this week

January 23, 2023

Bitcoin price consolidation opens the door for APE, MANA, AAVE and FIL to move higher

January 22, 2023

The below is an excerpt from a recent edition of Bitcoin Magazine Pro, Bitcoin Magazine’s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now.

Price-Based Capitulation Versus Time-Based Capitulation

A look at previous bitcoin bear market cycles shows two distinct phases of capitulation:

  • The first is a price-based capitulation, through a series of sharp selloffs and liquidations, as the asset draws down anywhere from 70 to 90% below previous all-time-high levels.
  • The second phase, and the one that is spoken of far less often, is the time-based capitulation, where the market finally begins to find an equilibrium of supply and demand in a deep trough.

Let’s cover both of these phases with visuals and data derived from the blockchain.

Bitcoin Drawdowns from All-Time Highs

While much has been written about the macroeconomic backdrop regarding the bitcoin market (with our analysis assuredly included), this bitcoin cycle ironically does not look all that different from the cycles of the past.

At the time of writing, bitcoin is 69.72% below previous all-time highs, with the peak of the drawdown reaching 71.86% on May 18. Bear markets of bitcoin’s past saw drawdowns of 93.08%, 84.82% and 83.47% respectively. With this in mind, despite the absolute size of this cycle’s drawdown dwarfing previous cycles, in relative terms this was nothing out of the ordinary for bitcoin. 

Bitcoin drawdowns from all-time highs show this drop isn’t out of the ordinary

When the average holder of bitcoin is underwater, despite the parabolic gains seen across longer time frames, we view this as a classic price-based capitulation event.

Time-Based Capitulation

What follows the collapse of the market below the average cost basis of the average holder is what we consider the time-based capitulation event. As the average holder is underwater, most marginal sellers have already sold their holdings, and while further downside is possible, the “pain” market participants feel is in the form of a prolonged period of time spent underwater rather than rapidly declining prices that characterized the start of the bear market.

It is also worth noting that as price falls, and market participants capitulate at a loss, the average cost basis (realized price) falls. To contextualize this decline in “fair” value of bitcoin, the history of realized price drawdowns is shown below.

History of realized price drawdowns

Bear market cycles take time to play out and vary in length depending on how you define them.

In all likelihood, the brunt of the largest capitulation event in the history of bitcoin has just occurred. More balance sheet contagion is certainly on the table (rather hiding under it), and the macroeconomic environment looks increasingly ugly. Holders should buckle in, not just in case of more severe market downturns, but the arguably more painful possibility of extended sideways action together with lower prices and plenty of sideways chop as coins are transferred from weak hands to strong hands, and from the impatient to the convinced.

Bitcoin is here to stay. Your job is simply to survive. 

Read Entire Article
Tags: bitcoinMagzineCryptocurrencyInvestmentMining Bitcoin
Share76Tweet47

Related Posts

Bitcoin derivatives data shows room for BTC price to move higher this week

by Jon Hartney
January 23, 2023
0

BTC options data suggest that the Bitcoin price rally still has legs, even with wider economic concerns growing and the

Bitcoin price consolidation opens the door for APE, MANA, AAVE and FIL to move higher

by Jon Hartney
January 22, 2023
0

BTC could take a break from its sharp rally and if BTC price bounces off underlying support, APE, MANA, AAVE...

Genesis bankruptcy case scheduled for first hearing

by Jon Hartney
January 22, 2023
0

The first hearing in Genesis Capital's bankruptcy case will be held on January 23, according to court filings

Terra lending protocol Mars to launch mainnet

by Jon Hartney
January 22, 2023
0

The Mars Hub will launch an independent Cosmos application chain and issue MARS to users who hold the token during...

Central African Republic eyes legal framework for crypto adoption

by Jon Hartney
January 22, 2023
0

A 15-member committee is tasked with working on a legal framework that will allow cryptocurrencies to operate in

Load More
  • Trending
  • Comments
  • Latest

Ethereum Classic gets ‘endorsement’ from Vitalik Buterin, but ETC price still risks 50% crash

July 27, 2022

Critique on Helium’s $6.5K monthly revenue causes a stir

July 28, 2022

All aboard! Elon Musk’s Vegas Loop now taking Dogecoin payments

July 7, 2022

Cardano Vasil hard fork hit with another delay for several weeks

July 29, 2022

All aboard! Elon Musk’s Vegas Loop now taking Dogecoin payments

0

Crypto owners banned from working on US Government crypto policies

0

Korean startup Uprise lost $20M shorting LUNC

0

Ethereum testnet Merge mostly successful — ‘Hiccups will not delay the Merge.’

0

Bitcoin derivatives data shows room for BTC price to move higher this week

January 23, 2023

Bitcoin price consolidation opens the door for APE, MANA, AAVE and FIL to move higher

January 22, 2023

Genesis bankruptcy case scheduled for first hearing

January 22, 2023

Terra lending protocol Mars to launch mainnet

January 22, 2023

XBT.Market

This website is an automated news feed powered by the Nebulome cloud system. The site is made possible by YYC TECH Consulting and Alberta Digital Mining Company. As a team with major crypto and bitcoin enthusiasm, we have curated major sources of news, trading and financial data to bring you, our viewer, an unbiased source of truth.

Recent Posts

  • Bitcoin derivatives data shows room for BTC price to move higher this week January 23, 2023
  • Bitcoin price consolidation opens the door for APE, MANA, AAVE and FIL to move higher January 22, 2023
  • Genesis bankruptcy case scheduled for first hearing January 22, 2023
  • Terra lending protocol Mars to launch mainnet January 22, 2023
  • Central African Republic eyes legal framework for crypto adoption January 22, 2023

News Categories

  • Bitcoin
  • Blockchain
  • Business
  • Market

Tags

bitcoinMagzine Cointelegraph Cryptocurrency insidebitcoins Investment Mining Bitcoin NewsBTC

Quicklinks

  • Home
  • Coins MarketCap
  • Crypto Exchanges
  • Crypto Calculator
  • Top Gainers and Loser
  • News
  • Contact Us

© 2022 Xbt.Market - Powered by YYC Tech Consulting & ADMCO.

No Result
View All Result
  • Home
  • Coins MarketCap
  • Crypto Exchanges
  • Crypto Calculator
  • Top Gainers and Loser
  • News
  • Contact Us

© 2022 Xbt.Market by Nebulome.

  • bitcoinBitcoin(BTC)$22,871.00-2.12%
  • ethereumEthereum(ETH)$1,632.76-1.83%
  • USDEXUSDEX(USDEX)$1.07-0.53%
  • tetherTether(USDT)$1.000.12%
  • binancecoinBNB(BNB)$327.31-1.64%
  • usd-coinUSD Coin(USDC)$1.00-0.04%
  • rippleXRP(XRP)$0.398426-2.94%
  • Binance USDBinance USD(BUSD)$1.00-0.05%
  • cardanoCardano(ADA)$0.391681-1.99%
  • dogecoinDogecoin(DOGE)$0.092413-2.93%
  • OKBOKB(OKB)$44.160.84%
  • matic-networkPolygon(MATIC)$1.20-3.01%
  • SolanaSolana(SOL)$23.32-3.67%
  • Shiba InuShiba Inu(SHIB)$0.000015-2.42%
  • Lido Staked EtherLido Staked Ether(STETH)$1,628.68-1.83%
  • polkadotPolkadot(DOT)$6.69-1.97%
  • litecoinLitecoin(LTC)$96.42-1.58%
  • AvalancheAvalanche(AVAX)$20.00-4.45%
  • tronTRON(TRX)$0.063390-2.78%
  • UniswapUniswap(UNI)$6.82-5.36%
  • daiDai(DAI)$1.000.11%
  • cosmosCosmos Hub(ATOM)$14.33-1.76%
  • wrapped-bitcoinWrapped Bitcoin(WBTC)$22,816.00-2.30%
  • chainlinkChainlink(LINK)$6.97-3.04%
  • leo-tokenLEO Token(LEO)$3.623.85%
  • ToncoinToncoin(TON)$2.27-2.56%
  • ethereum-classicEthereum Classic(ETC)$22.67-3.54%
  • moneroMonero(XMR)$165.91-3.91%
  • bitcoin-cashBitcoin Cash(BCH)$132.74-3.41%
  • Aerarium FiAerarium Fi(AERA)$7.14-13.09%
  • AptosAptos(APT)$15.09-8.30%
  • stellarStellar(XLM)$0.090535-3.30%
  • ApeCoinApeCoin(APE)$5.73-2.18%
  • CronosCronos(CRO)$0.081023-3.38%
  • NEAR ProtocolNEAR Protocol(NEAR)$2.37-5.90%
  • QuantQuant(QNT)$137.63-3.01%
  • filecoinFilecoin(FIL)$5.25-4.36%
  • algorandAlgorand(ALGO)$0.257159-4.11%
  • HederaHedera(HBAR)$0.069205-4.91%
  • Lido DAOLido DAO(LDO)$2.09-2.24%
  • vechainVeChain(VET)$0.023910-3.49%
  • Internet ComputerInternet Computer(ICP)$5.56-5.42%
  • FantomFantom(FTM)$0.55-10.58%
  • decentralandDecentraland(MANA)$0.72-6.73%
  • The SandboxThe Sandbox(SAND)$0.72-5.80%
  • Axie InfinityAxie Infinity(AXS)$10.90-5.03%
  • AaveAave(AAVE)$85.87-2.70%
  • eosEOS(EOS)$1.08-3.16%
  • The GraphThe Graph(GRT)$0.12982111.07%
  • FlowFlow(FLOW)$1.11-4.44%
  • MultiversXMultiversX(EGLD)$44.50-4.60%
  • Terra Luna ClassicTerra Luna Classic(LUNC)$0.000185-1.67%
  • theta-tokenTheta Network(THETA)$1.09-6.96%
  • tezosTezos(XTZ)$1.16-5.70%
  • FraxFrax(FRAX)$1.000.23%
  • true-usdTrueUSD(TUSD)$1.00-0.04%
  • huobi-tokenHuobi(HT)$5.58-2.46%
  • paxos-standardPax Dollar(USDP)$1.000.20%
  • bitcoin-cash-svBitcoin SV(BSV)$43.760.12%
  • kucoin-sharesKuCoin(KCS)$8.62-2.27%
  • havvenSynthetix Network(SNX)$2.54-6.36%
  • Curve DAOCurve DAO(CRV)$1.06-1.87%
  • Frax ShareFrax Share(FXS)$10.573.08%
  • Rocket PoolRocket Pool(RPL)$39.64-1.11%
  • ChilizChiliz(CHZ)$0.139744-4.14%
  • PancakeSwapPancakeSwap(CAKE)$4.47-1.80%
  • USDDUSDD(USDD)$0.99-0.11%
  • eCasheCash(XEC)$0.000037-3.55%
  • ImmutableXImmutableX(IMX)$0.89-1.64%
  • BitTorrentBitTorrent(BTT)$0.000001-3.06%
  • dashDash(DASH)$61.801.57%
  • iotaIOTA(MIOTA)$0.244233-3.11%
  • BitDAOBitDAO(BIT)$0.57-2.07%
  • Trust WalletTrust Wallet(TWT)$1.57-5.65%
  • Mina ProtocolMina Protocol(MINA)$0.77-7.78%
  • KlaytnKlaytn(KLAY)$0.204836-3.94%
  • OptimismOptimism(OP)$2.951.18%
  • GateGate(GT)$4.31-4.67%
  • makerMaker(MKR)$686.79-3.70%
  • neoNEO(NEO)$8.71-1.88%
  • cUSDCcUSDC(CUSDC)$0.0226920.92%
  • gemini-dollarGemini Dollar(GUSD)$1.01-0.15%
  • ArweaveArweave(AR)$11.35-4.39%
  • GMXGMX(GMX)$67.04-3.46%
  • OKCOKC(OKT)$31.60-2.40%
  • cDAIcDAI(CDAI)$0.022186-0.01%
  • zcashZcash(ZEC)$43.65-4.75%
  • RenderRender(RNDR)$1.82-0.46%
  • RadixRadix(XRD)$0.053664-8.49%
  • THORChainTHORChain(RUNE)$1.80-2.66%
  • Tokenize XchangeTokenize Xchange(TKX)$6.68-2.03%
  • OsmosisOsmosis(OSMO)$1.00-3.04%
  • WhiteBIT TokenWhiteBIT Token(WBT)$4.10-0.39%
  • singularitynetSingularityNET(AGIX)$0.4359328.54%
  • PAX GoldPAX Gold(PAXG)$1,869.880.42%
  • enjincoinEnjin Coin(ENJ)$0.466683-4.11%
  • loopringLoopring(LRC)$0.370368-7.26%
  • Convex FinanceConvex Finance(CVX)$6.20-4.61%
  • Fetch.aiFetch.ai(FET)$0.43984417.44%
  • Tether GoldTether Gold(XAUT)$1,866.900.05%