- Bitcoin drops 8% from new ATH of $69,170, recovering to $63,515 amid market turbulence.
- Analysts like Alex Thorn expect volatility, citing historical patterns in non-linear bull markets.
- Conflicting ATH figures from platforms emphasize practical considerations and market reactions over the specific value.
Bitcoin experienced a dramatic 8% drop, swiftly descending from its newfound all-time high of $69,170. The cryptocurrency market, recently buoyed by the approval of Bitcoin ETFs in January, faced volatility as Bitcoin’s price plummeted to just above $60,000 within five hours, according to CoinGecko.
The crypto community was abuzz with excitement as reports surfaced of Bitcoin shattering its previous all-time high (ATH) price.
However, conflicting accounts from various crypto price aggregators have cast a shadow on the clarity of this achievement.
Understanding the Voltality
Analysts argue that the current market turbulence is expected during Bitcoin’s ascent, drawing parallels to previous bull markets. Alex Thorn, Head of Research at Galaxy, points out that in 2017, Bitcoin faced multiple corrections exceeding 25% on its journey to an all-time high of $20,000. Thorn suggests that such non-linear market movements are typical in bullish cycles.
“This is likely the beginning of a lot of volatility as we go up, The common phrase is that bull markets climb a wall of worry,” he continued. “Looking at 2017 and seeing eight drawdowns of 25% or more on the way to all-time highs, that looks like a wall of worry to me, so I’m not concerned.”
Alex Thorn
Thorn remains unfazed by the recent dip, emphasizing that Bitcoin has a history of volatile price cycles and nonlinear bull markets. He anticipates a potential consolidation phase, citing past instances where BTC touched prior all-time highs before definitive breakthroughs.
Thorn outlined the historical volatility of Bitcoin, emphasizing its resilience during bull markets. Notably, Thorn pointed to the 2017 climb, citing thirteen corrections of 12% or more.
Drawing parallels to the current scenario, Thorn suggests potential consolidation after Bitcoin’s recent highs. With a YTD surge of +62%, caution and a reminiscent eye on past patterns may guide investors through the market’s dynamic fluctuations.
Coinbase vs. CoinGecko: Divergent ATH Figures
Decrypt initially reported the news based on Coinbase’s data, stating that Bitcoin reached a high above $69,324. In contrast, CoinGecko contested this, claiming that BTC only climbed to $68,912, falling short of the supposed ATH. This discrepancy raises questions about the accuracy of meticulously crafted price-tracking algorithms.
Ro Shirole, Chief Commercial Officer at Saxet, utilized the CoinDesk Bitcoin Index (XBX), incorporating prices from multiple exchanges with a proprietary algorithm.
According to XBX, the target to surpass was $68,991, achieved in November 2021. Despite reaching $69,209 today, Bitcoin subsequently crashed, muddying the waters surrounding the ATH claim.
What Defines Bitcoin’s All-Time High?
The disagreement in ATH figures can be attributed to the diverse approaches taken by different algorithms to determine Bitcoin’s price at any given moment. Messari Research noted that the ATH may not necessarily represent the absolute highest single trade price, introducing factors like daily averages and price samples on the day of the ATH.
While some argue over the accuracy of the ATH, others emphasize the significance of perception in the crypto market. Despite discrepancies, exchanges like Binance and Coinbase celebrated Bitcoin’s apparent ATH, influencing market sentiment.
The subsequent crash, however, adds a layer of complexity to the interpretation of events.
Beyond the Numbers: The Practical Significance
Ro Shirole downplayed the emphasis on the specific ATH number, highlighting the importance of practical considerations. He expressed concern about how people perceive the ATH and react to market events, emphasizing the significance of understanding support levels during retractions.
In conclusion, the conflicting ATH claims highlight the challenges in establishing a definitive number in the ever-evolving crypto landscape. Beyond the ceremonial significance, the practical implications and market reactions hold more weight for industry participants.
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