drawdownanalysis
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🚨Bitcoin: What historical drawdown has it experienced in a bear market?🚨
Since its peak of $126,000 reached on October 6, Bitcoin has been experiencing a series of corrective sessions. This pullback raises a key question: is this simply a consolidation within a bull market, or the beginning of a true bear market?
First, it's worth noting that if the cycle truly ended on Monday, October 6, this holds true in terms of the so-called 4-year time cycle, with a cycle length within the multi-criteria average (see my correlation table below) of previous cycles.
👉 At this stage, the downward trend is not confirmed, as key support levels, particularly the weekly Ichimoku cloud, have not been broken. This level represents the crucial boundary between a classic cyclical correction and a significant reversal.
👉As long as the price remains above the Kumo cloud, the bullish cycle that began in 2022 remains structurally valid. Historically, Bitcoin only enters a bear market when the weekly candles close below the cloud, accompanied by a Chikou Span that also crosses below the price. Such a configuration would signal a sustained deterioration in momentum for the coming months.
👉If, however, this zone were to break, it would become relevant to switch to a bear market analysis. To estimate a potential bottom, the most informative tool remains the drawdown indicator from the all-time high (ATH), which measures the percentage drop relative to the previous historical high.
👉The chart below clearly highlights a long-term trend: the drawdown troughs have been aligned with an upward trend line since 2011, while the intensity of the declines gradually decreases over cycles.
⚠️Past figures confirm this:
• 2011: -93%
• 2015: -86%
• 2018: -84%
• 2022: -77%
Extending this trend, the theoretical zone of the next bottom lies between -70% and -76%.
‼️Applying these ratios to the peak of $126,000, we obtain:
• -50% → $63,000
• -65% → $45,000
• -70% → $37,800
• -73% → $34,000
• -76% → $30,200
#btc #DrawdownAnalysis
Since its peak of $126,000 reached on October 6, Bitcoin has been experiencing a series of corrective sessions. This pullback raises a key question: is this simply a consolidation within a bull market, or the beginning of a true bear market?
First, it's worth noting that if the cycle truly ended on Monday, October 6, this holds true in terms of the so-called 4-year time cycle, with a cycle length within the multi-criteria average (see my correlation table below) of previous cycles.
👉 At this stage, the downward trend is not confirmed, as key support levels, particularly the weekly Ichimoku cloud, have not been broken. This level represents the crucial boundary between a classic cyclical correction and a significant reversal.
👉As long as the price remains above the Kumo cloud, the bullish cycle that began in 2022 remains structurally valid. Historically, Bitcoin only enters a bear market when the weekly candles close below the cloud, accompanied by a Chikou Span that also crosses below the price. Such a configuration would signal a sustained deterioration in momentum for the coming months.
👉If, however, this zone were to break, it would become relevant to switch to a bear market analysis. To estimate a potential bottom, the most informative tool remains the drawdown indicator from the all-time high (ATH), which measures the percentage drop relative to the previous historical high.
👉The chart below clearly highlights a long-term trend: the drawdown troughs have been aligned with an upward trend line since 2011, while the intensity of the declines gradually decreases over cycles.
⚠️Past figures confirm this:
• 2011: -93%
• 2015: -86%
• 2018: -84%
• 2022: -77%
Extending this trend, the theoretical zone of the next bottom lies between -70% and -76%.
‼️Applying these ratios to the peak of $126,000, we obtain:
• -50% → $63,000
• -65% → $45,000
• -70% → $37,800
• -73% → $34,000
• -76% → $30,200
#btc #DrawdownAnalysis
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