Bitcoin’s Bear Market Price Decline On Its Longest Stretch In History
Bitcoin’s current price of about $3,500 is a world away from its all-time high of $20k it reached in December 2017.
The massive price decline the top cryptocurrency has experienced over the last one year means that Bitcoin is currently on the longest stretch of price decline since it launched in 2009.
Since reaching its all-time high, the world’s leading cryptocurrency has hit a series of lower highs, with its February 2 ceiling marking the 411th consecutive day that BTC prices have been in decline.
The previous longest stretch for BTC price decline was during the 2013-2015 bear market that saw prices hit a series of low highs for a record 410 consecutive days.
Bitcoin’s Historical Price Declines
The first significant bitcoin bear market occurred in 2011, with prices staying in a downward loop for 163 days. As such, the latest stretch of collapse marks the longest ever witnessed in the crypto’s ten-year history.
However, comparatively, it isn’t the most biting yet in terms the overall percentage decline.
The 2011 bear market, by comparison, shorter than the succeeding two, is by far the harshest on bitcoin’s price.
In the 163 days, prices fell, BTC tanked from a high of $31.50 to a record low of $2.01, representing a decline of over 93 percent.
In contrast, the 2013-15 bear market saw bitcoin prices decline by 86 percent, from a high of about $1200 to a low of about $150. The third major bear market may thus be the longest as of now, but it is yet to hit depreciation levels of the previous two. At the moment, bitcoin has declined by about 82 percent.
It wouldn’t be possible to pinpoint the exact period when the current tumble will end, but one thing is that a bitcoin bottom isn’t that far off.
Consider the market’s recent subdued reaction to Cboe’s withdrawal of an application for the highly anticipated VanEck bitcoin exchange-traded fund (ETF) as an example that the industry is maturing very quickly.
The upcoming bitcoin halving event slated for May 2020 could be a catalyst that sees the top digital asset push upwards.
Bitcoin’s block rewards “halving” history
Bitcoin has a deflationary monetary policy, with the block rewards reduced by half after 210,000 blocks or every four years. What that does is that it basically slows down the release of new bitcoins.
Referred to as “halving,” the event allows for the idea that reduced creation of new coins means that demand could outweigh supply and see bitcoin’s valuation rise regardless of the market.
The current block reward is 12.5 bitcoins, but that will reduce to 6.25 bitcoins in the next halving. 17,514,938 bitcoins have been mined so far, leaving 3,485,063 of the total 21 million.
Historically, bitcoin’s price has tended to bottom out and then gain considerably well in advance of the “halving” event.
For instance, before the first halving on November 28, 2012, bitcoin’s price bottomed about 378 earlier before going on to rise by over 500 percent.
In the build-up to the second halving, the bottom was reached 539 days, and after block rewards were “halved” on July 9, 2016, prices rose by 309 percent.
The 3rd halving is expected on May 25, 2020- about 496 days from now, and if investors were to preemptively factor in demand-supply dynamics like before, then the bottom could be on the horizon somewhere.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.