Bitcoin correction is a typical cycle pullback and is not out of the ordinary

Bitcoin's correction from its January peak is a typical cycle pullback and is not out of the ordinary

Cryptocurrency analysts and executives are saying that Bitcoin’s correction from its January peak is a typical cycle pullback and is not out of the ordinary, with a price top still on the horizon.

Speaking to Cointelegraph, Collective Shift CEO Ben Simpson said that he doesn’t think the bull run is over and that the peak of the cycle has been pushed back due to macro conditions, and global liquidity isn’t pretty, which isn’t helping crypto.

“We are only on the third or fourth correction over 25% which we’ve had in Bitcoin this cycle compared to 12 last cycle. So we are getting shallower, lower lows and steeper, higher highs, which to me is charting out a classic bull market cycle, which typically has shallower pullbacks as the bull progresses, ” said Simpson.

Bitcoin is down 24% from its all-time high of $109,000 on January 20 amid uncertainty around U.S. President Donald Trump’s tariffs and the future of U.S. interest rates, but Simpson called it “a normal correction.”

“Things got overheated, and they needed to cool down, and the market needed to find a new foundation, and now we’re waiting for the next new narrative. I think the next narrative will likely be around U.S. rate cuts, easing QT and increasing global liquidity, ” he added.

Bitcoin price down 13.58% over the past month.Source: CoinMarketCap

Derive founder Nick Forster shared a similar view, saying that Bitcoin is likely in a normal correction phase, with the cycle peak still to come.

“Historically, Bitcoin experiences these types of corrections during long-term rallies, and there’s no reason to believe this time is different. It’s common to see Bitcoin return to key Fib levels during these corrections, which aligns with the technical analysis indicators used by many traders and analysts. In this case, Bitcoin has corrected back to the 38.2% Fib level from the December 2022 lows to the January 2024 highs. At the same time, we’ve also seen a steeper correction in price terms but a shallower correction in terms of Fib levels compared to last cycle, which is interesting to note,” said Foster.

After Trump’s election in November, Bitcoin surged almost 36% over a month, hitting $100,000 for the first time in December. At the time of publication, Bitcoin is trading at $82,824, according to CoinMarketCap.

However, Foster added that the six-month fate of Bitcoin seems increasingly tied to traditional markets. Similarly, Independent Reserve CEO Adrian Przelozny said that it isn’t just Bitcoin being impacted by the macroeconomic conditions.

“This is pervading all asset classes and may lead to a spike in global inflation and a contraction in international growth. Considering the bleak outlook for the global economy and the potential for a liquidity crisis, it isn’t surprising to see Bitcoin struggle to maintain recent highs. Instead, we’re observing a correction that is incrementally burning through support levels and setting the stage for the next decisive move,” Przelozny explained.

Source: Charles Edwards

According to Bitcoin futures chart by Derive.

“The current price trend aligns closely with past behavior before a strong price rally. Despite the apparent "tumultuous" period, this aligns closely with historical patterns. As we move through this period of price correction and lower lows, we’re also observing a shift in futures chart behavior, which is interesting. Typically, during periods of strong momentum and price trending up or down, we observe less activity in the futures market. However, recently, we’ve seen an uptick in futures activity, which is usually a sign of traders attempting to gauge the strength of the current price move and decide whether to join in or prepare for a reversal. It will be interesting to see how this plays out over the coming month or two, ” said Derive’s founder.

The next narrative will likely be around U.S. rate cuts, easing quantitative tightening, and increasing global liquidity, Collective Shift’s Simpson concluded.

However, Capriole Investments founder Charles Edwards isn’t so sure if the Bitcoin bull run is over or not.

The odds are “50:50, in my opinion.”

“Yes, from an onchain perspective at present, but that could change quickly if the Fed starts easing in the second half of the year, stops balance sheet reduction, and dollar liquidity grows as a result, which I think has decent odds of happening,” Edwards explained.

The comments come a day after CryptoQuant founder and CEO Ki Young Ju declared that the “Bitcoin bull cycle is over.”

“Expecting 6-12 months of bearish or sideways price action. Bouncing at $78k support. But no demand in lower prices.