How Does the May 19th Bitcoin Correction Compare to History?
Bitcoin and the rest of the market tanked yesterday. Red was all over the place with double-digit drops across all charts. In BTC’s case, this nosedive came as a continuation of larger retracement that started after the all-time high in April at $65,000. However, how does this correction compare to others?
Mid-2021 Correction: What Happened?
Before heading into the most recent price developments, it’s worth exploring what transpired before the market got there. In short, bitcoin entered its latest bull cycle in late 2020, started to appreciate in value rapidly, broke its $20,000 ATH, and went into uncharted territory by January 2021.
Approximately at that point, it was revealed that Tesla had bought $1.5 billion worth of BTC – a purchase that followed the entrance of other giants like MicroStrategy, MassMutual, One Asset River Management, and more.
However, Tesla’s buy was regarded as the most significant milestone due to the popularity of the brand and the CEO – Elon Musk. Shortly after, the EV-maker said it will enable BTC payments for its products, which accelerated the price surge even more. This resulted in a peak of $65,000 reached in mid-April.
Once the relationship between Tesla and bitcoin saw its first major obstacle, when the electric vehicle company disabled BTC payments, the price of the cryptocurrency started to fall hard.
The situation worsened as China reiterated its negative stance on digital assets, and the nosedive continued. Although BTC had shed about $25,000 since its mid-April peak by now, the worst was yet to come.
And it arrived yesterday. While the reasons are still debated, whether it was due to too many leveraged positions or something else, the fact is that bitcoin slumped by $10,000 in a matter of minutes to a three-month low of $30,000.
Where Does it Rank?
Although BTC recovered all losses as of now and trades above $40,000, it’s still early to say whether or not it’s finished just yet. This said, hard data now shows that bitcoin went down by over 50% from the mid-April peak to yesterday’s low.
As violent as that sounds, BTC is no stranger to similar and even worse corrections. In fact, the mid-2021 retracement is not even if the top five largest percentage-wise, according to data from CoinMarketCap provided by Dan Tapiero.
Despite undertaking a somewhat drastic approach in which some corrections are viewed on a yearly timeframe and others on a daily, it’s safe to conclude that BTC has seen some wild price slumps.
Back in April 2013, the cryptocurrency fell by more than 80% in two days. More recently, the asset slumped by 55% in a day on Black Thursday last year.
Yet, the latest nosedive did set a record after all. It became BTC’s most severe corrections in terms of the US dollar.