by Dave
Armstrong suggests that it is a natural feature of markets that if a decline is severe enough, the market will take a long time to recover. The more severe and rapid the decline, the longer it will take to bounce back.
I do think crypto is a “faster” market than normal (probably resulting from its 24/7 trading and international reach) – spiking faster, and thus (probably) recovering faster – but his post suggests that new highs in the near term (i.e. this year, the next, etc) might not be likely. Silver had a 19 year decline after its top in 1980, nasdaq had a similarly long decline after its top in 2000. The crypto analogue for this would be 2013/2014.
I know. Institutional buyers. Goldman Sachs traders buying bitcoin with their bonuses. Etc.
Just food for thought. I like the specific numbers he coughs up, mostly.
There is a basic rule that I have come to determine. A market can survive as long as the correction on a monthly level does not closed beyon 43% down from the high (8.6 /2). The next stage is 51.6%. Move beyond that and you cross into Melt Down Mode. Bitcoin criassed the 43% decline so that was a warning this was not a short-term correction from which new highs were possible. Moving beyond 51.6% means new highs are not likely for quite some time.