Key Insights
- •A top analyst indicates that Bitcoin's 19% drop from its all-time high is insufficient evidence to declare the cycle top.
- •Historically, significant liquidations, such as the recent $40 billion sell-off, have often led to prolonged corrections or cascading selloffs for Bitcoin.
- •Despite these events, the cryptocurrency has maintained momentum above the $108,000 mark.
The latest Bitcoin news highlights four primary reasons, according to top analyst Rekt Fencer, why BTC has not yet reached its cycle peak.
The analyst suggests that Bitcoin's current decline from its all-time high is minimal, providing little justification for signaling a bear market. Concurrently, the market experienced liquidations totaling approximately $40 billion, yet Bitcoin managed to sustain a price above $108,000.
These factors, along with two others, strongly suggest that the Bitcoin price has substantial potential for further significant increases, according to the analyst.
Bitcoin Price Is Down 19%
Bitcoin's 19% decrease from its all-time high has reignited discussions across social media about the potential for the cycle top.
However, when examined within the context of historical market behavior, a correction of this magnitude barely registers as a warning sign for an impending bear market.
In previous major bull cycles, Bitcoin has consistently experienced corrections ranging from 20% to 30%, and at times, even more, without jeopardizing its long-term uptrend. Analyst Rekt Fencer notes that the current pullback from the all-time high represents normal price behavior for Bitcoin.
While a 19% drawdown can be unsettling in the short term, it often serves as a mechanism for the market to cool down after a rapid rally. This process allows overextended traders to exit positions and provides opportunities for more robust investors to accumulate assets.
The current price action is a far cry from the extreme volatility typically associated with a true market peak.
Market Liquidation Hit $40 Billion in October Yet Bitcoin Held $108,000
October saw a significant liquidation event valued at roughly $40 billion across the cryptocurrency markets, which led to the expulsion of leveraged traders and widespread fear and doubt on social media.
Despite the magnitude of this event, Bitcoin's price has remained resilient, holding firm above the $108,000 level.
In past market cycles, liquidations of this depth have frequently pushed Bitcoin into extended corrections or triggered cascading selloffs.
However, instead of capitulating, the market absorbed the selling pressure and stabilized, indicating strong demand that counteracted the downward trend.
Furthermore, maintaining a price level above six figures following a $40 billion liquidation event reflects the increasing maturity of Bitcoin's market structure. This is supported by deeper liquidity, broader institutional involvement, and a more balanced interplay between spot and derivatives markets.
Gold and Stocks Pumping While BTC Price Lags
Gold has recently surged to become the first asset to achieve a market capitalization of $30 trillion, while stocks have also reached record highs. This performance might suggest that Bitcoin is losing momentum as traditional markets rally. However, according to Rekt Fencer, this perception overlooks the broader market dynamics.
Bitcoin's current lag is less an indicator of weakness and more a reflection of how capital cycles move across different markets.
Historically, Bitcoin's price movements tend to follow broader liquidity trends. When traditional assets like gold and equities rally first, it often signifies the commencement of a risk-on environment.
These are precisely the conditions under which Bitcoin typically experiences significant growth.
Capital typically flows into Bitcoin after investors have realized gains from safer assets.
This pattern of divergence has been observed in previous cycles, often preceding substantial rallies in Bitcoin towards its cycle peaks.
Bitcoin News: Zero Peak Indicators Hit
The analyst reports that none of the typical indicators signaling a Bitcoin cycle top have activated. A chart shared by the analyst shows that key metrics, including the Ahr999 Index, Pi Cycle Top Indicator, Puell Multiple, and MVRV Z-Score, remain below their historical danger zones. Out of thirty total indicators, none are currently suggesting that the crypto market has reached its peak.
In every prior Bitcoin bull market, these metrics have historically flashed red signals before major tops, indicating extreme overvaluation, miner stress, and rapid price acceleration.
Currently, most readings are situated in mid-range levels, suggesting that the market still possesses considerable room for growth before entering overheated territory.
For instance, the Ahr999 Index is currently at 0.84, well below the historical top threshold of 4, indicating it is not signaling a sell zone. The MVRV Z-Score, which has accurately predicted cycle peaks in the past, stands at 1.85, significantly lower than the 5 level that typically signifies market exuberance.