Key Points
- Bitcoin’s recent drop to below $55K is considered ‘normal’ by Capriole Investments founder Charles Edwards.
- Despite the negative market sentiment, key BTC cycle top indicators suggest room for further growth.
Bitcoin’s recent 13% drop, which took it below $55K, has caused some concern in the market. Some are even suggesting that the bull run may be over.
However, according to Charles Edwards, founder of crypto hedge fund Capriole Investments, such a drop is ‘normal’. He went as far as to say that a drop to “$52K or $45K would be a normal 30-40% bull market pullback.”
Bitcoin’s Market Behavior
From its March peak of $73.7K, Bitcoin has lost nearly $20K, marking a decline of about 26%. A further drop to the consolidation zone seen in February would equate to a 30% pullback.
In the stock market, a 5-10% drop could be considered a pullback, while anything more than that would confirm a downtrend. But Edwards suggests that this might not be the case for Bitcoin. As such, the $50K psychological level could be a key target to watch.
Market Influences and Future Predictions
Interestingly, the negative market sentiment has been linked to sell-offs from Mt. Gox and German Bitcoin holders. Some market observers see these sell-offs as a way of clearing the pending supply overhang for a greater tailwind in Q3 2024.
However, the distribution from Mt. Gox could be delayed, potentially affecting the market. The defunct Japanese exchange still has 141.6K BTC, worth around $7.6 billion, to offload.
Despite the current negative sentiment, historical price chart data suggests that a market top for Bitcoin could be likely in late 2025. Key metrics like MVRV (Market Value to Realized Value) and the Puell Multiple, which gauges miners’ profitability, were not at extreme levels, suggesting that Bitcoin still has room for growth.
