Bitcoin underwent a 30% decrease within a span of one week, resembling the crash that occurred in March 2020. However, there have been several occurrences of such declines in earlier periods of rising market trends.
Cryptocurrency prices had a little recovery, as bitcoin reached a value of $55,000, reflecting a 10% decline over the previous 24-hour period. Ethereum (ETH) had a more pronounced decrease in value, which was intensified by a significant sale of the asset by a major cryptocurrency trading company.
However, BTC still remains 13% lower for the current trading session. The bounce occurred when U.S. equities markets somewhat recovered from their initial sharp decline, with the Nasdaq index down by 3.6% soon before the end of trading.
According to Alex Thorn, head of firmwide research at Galaxy, the extent of the downturn was consistent with past bull markets. Daniel Cheung, one of the founders of Syncracy Capital, a venture business focused on digital assets, drew a parallel between the current quick decline and the crisis sparked by the Covid-19 pandemic in 2020.
During that crash, Bitcoin (BTC) had a 57% drop in just six days in mid-March. Cheung anticipates a rapid recovery in the cryptocurrency market, attributing the current selling pressure to compelled and extreme panic.
Matt Hougan, the Chief Executive Officer of Bitwise, a company that manages assets, drew a parallel between the recent crisis and the one that occurred in March 2020. He expressed the sentiment that the decline in bitcoin’s value gave the impression that it may never regain its previous strength.
