We’ve seen far too many Bitcoin corrections this year for comfort. However, “history and probability” suggest that this latest 40% correction isn’t signaling a bear market… *Check out the CryptosRus Bitcoin chart! Covered: How Many Bitcoin Corrections Equal A Bull Market? The RHODL Ratio Corrections Are Nothing New How Many Bitcoin Corrections Equal A Bull […] The post Bitcoin Corrections Are Nothing New, Says Tech Analyst appeared first on CryptosRus.

Bitcoin Corrections Are Nothing New, Says Tech Analyst

We’ve seen far too many Bitcoin corrections this year for comfort. However, “history and probability” suggest that this latest 40% correction isn’t signaling a bear market…

*Check out the CryptosRus Bitcoin chart!

Covered:

  • How Many Bitcoin Corrections Equal A Bull Market?
  • The RHODL Ratio
  • Corrections Are Nothing New

How Many Bitcoin Corrections Equal A Bull Market?

You’ve probably heard by now that corrections are normal in Bitcoin. If you’re somewhat new to Bitcoin, then the first time you heard that was probably in April. Then in May. Then again in September. One more time in November. And, one last time this December.

That’s a lot of “corrections” for those keeping score at home. Those corrections add up to a bear market at some point, no? Not quite. When it comes to determining a bear market, the number of corrections doesn’t really matter. What matters is how overheated the market is.

Or, at least, this is what one metric shows us.

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The RHODL Ratio

RHODL Ratio

The RHODL Ratio, which translates to Realized HODL ratio, “is a useful on-chain metric which measures how overheated the market is becoming,” according to crypto analyst TechDev.

“Historically, the cycle tops when this metric reaches the red band on the chart,” TechDev says, referring to the chart above. The “red band” he’s referring to is the upper part of the white chart.

Screenshot: Red Band RHODL Ratio

As you can see, the 2021 bull market, according to the RHODL ratio, has not gotten anywhere near as overheated as it did back in 2017, 2013, and 2011.

Corrections Are Nothing New Or Interesting

“40%+ corrections are nothing new in Bitcoin bull markets. In fact, we’ve seen 11 of them which have not marked a cycle top,” TechDev noted. He added, “While the starts of bear markets have been marked by an initial 40%+ decline, these have always been paired with overheated market signals from indicators like RHODL Ratio, among others.”

Meaning, a 40% correction could be a sign of a bear market, but it has historically been paired with an overheated market. That’s not the case this time.

Historically, this last correction would be the 12th of its kind, i.e., a correction in non-overheated market conditions.

“History and probability, “TechDev says, “suggest it will become the 12th 40%+ correction to not mark a cycle top, but time will tell.”

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For more TechDev, make sure to check out his newsletter. Also, follow him on Twitter for the latest, greatest technical analysis.

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