Pullbacks, Volatility Common At Bitcoin All-Time Highs, Stats From the Past
07th March 2024: Bitcoin slightly exceeded its all-time high of f $69,000 on March 5, reaching $69,200 or slightly higher on many exchanges. It then promptly fell almost 15% to nearly $59,000 before rebounding to above $60,000.
History indicates such moves are common, and have occurred near every prior all-time high over the last decade. Pullbacks have ranged from 15% to 35%.
Cory Mitchell, an analyst with Trading.biz commented “While there is no guarantee history will repeat on this cycle, volatility around a major high is quite common. Except in 2021, moves to a new all-time high following a bear market—the 2024 scenario—have been followed by significantly higher prices. The volatility around the highs provides astute traders the opportunity to potentially buy at discounted prices during a strong uptrend which could continue. In case the uptrend doesn’t continue, manage risk because bear markets can be severe and last a year or more.”
Here’s how the price has acted as it approached prior highs over the last decade.
The 2013 high of $1198.8 was approached in January of 2017. It got within 4% of the high and then fell 34% in a matter of weeks before recovering. In February and March, the price whipsawed the high, exceeding it by as much as 10% and then plummeting 30% again. It quickly rallied again.
The uptrend continued through the rest of 2017. The price peaked at $19,660 in late 2017. It wasn’t until late 2020 that Bitcoin revisited that prior high. It got within a couple of percent and then dropped 16%. It then slightly exceeded the high again and then dropped 12% before rallying to a high of $64,900.
The 2021 all-time high of $64,900 was taken out later that year, and once again witnessed big whipsaw movements. After the high was exceeded by 3%, it promptly fell 18% in a single day. One month later the price made a slightly higher high again, reaching $69,000 then tumbled into a bear market which lasted more than a year.
$69,000 was the all-time high until March 4, when it was slightly eclipsed and a swift pullback ensued.
History indicates to expect pullbacks between 15% and 30% after nearing the all-time in situations like what is occurring in 2024. Ultimately, prices have continued higher following the volatility, but it is of course unknown if that will happen this time or if a bigger drop will ensue.
Consider personal risk tolerance and an acceptable drawdown before investing or trading. Set a risk limit and stay within it.
