Bitcoin experienced a rollercoaster ride on Tuesday, reaching a new all-time high of $69,170 before plummeting 12% within five hours. This volatility comes amidst a weeks-long surge fueled by the approval of Bitcoin ETFs in January.
While the price drop was dramatic, analysts argue that it's typical behavior during bull markets. Historical data shows that Bitcoin's previous climbs to all-time highs were characterized by similar periods of significant corrections.
In 2017, Bitcoin experienced eight drops of 25% or more on its path to an all-time high. Meanwhile, in the first half of 2021, during the post-pandemic surge, similar patterns emerged, with 13 corrections of 10% or more.
This historical context puts the recent volatility in perspective, suggesting that it may not be a cause for alarm but rather a characteristic feature of bull markets. Whether this latest dip precedes further consolidation or another leg up remains to be seen, but the historical trend suggests that volatility will likely continue to be a prominent feature shortly.