Like just about all other risk assets this week, it’s been a rough one for bitcoin. As of Friday morning, the world’s largest cryptocurrency was trading down over 7% to the low $54K range. After taking out its spring highs in late October and then making a higher high in November, bitcoin has seen a sharp and swift pullback in the last few weeks falling nearly 20%. Even after the current pullback, the uptrend from the summer lows for bitcoin remains intact as a break of that trendline wouldn’t come into play until around the $50K level.
As anyone even paying some attention already knows, volatility is no stranger to bitcoin. While the current pullback is nearing the 20% threshold, in the last year alone, bitcoin has seen a number of pullbacks from record highs of similar or even greater magnitude. As shown in the chart below, if the current pullback reaches the 20% threshold, it would be the fourth pullback of that magnitude or more from a record high in the last twelve months. Of those three prior pullbacks, the first two bottomed out at declines of less than 25%, but the most recent was much deeper as bitcoin was more than cut in half from its April closing high to its July closing low.
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