Bitcoin Experiences Fourth Consecutive Weekly Decline as the Correction Period Persists
Bitcoin has undergone a significant correction, marking four consecutive weeks of negative returns as the cryptocurrency faces a major downturn.
Bitcoin (BTC) ended the previous week with adverse returns, continuing the downturn in the broader cryptocurrency market. Analysts at Bitfinex reported that this marks the leading digital currency’s fourth consecutive weekly decline.
According to Bitfinex, BTC last recorded a sequence of four weeks with negative returns during a prolonged consolidation phase from March to October 2024, where it experienced a peak-to-trough drop of about 24.1%. In contrast, the current decline has seen BTC drop by 30.6% over the last four weeks.
Continued BTC Correction
The previous week witnessed a decline of 16% in BTC’s peak-to-trough values, finishing the week with an overall drop of 8.65%. This correction has intensified, with BTC’s drop from its all-time high now standing at 36%, marking this phase as the largest in both scale and the number of long liquidations.
As this decline persists, short-term holders (those holding BTC for 155 days or less) are increasingly capitulating. This group is experiencing a surge in loss realization, with Bitcoin dropping below the lower limits of their cost-basis model. Recently, the Exponential Moving Average of realized losses among short-term holders has escalated to $523 million daily, the highest since the collapse of the defunct FTX exchange.
There’s a notable level of distress among recent BTC buyers, who have been forced to exit their positions amid growing unrealized losses. This realization underscores how top-heavy the market became prior to this correction, as the BTC supply between $106,000 and $118,000 was significantly denser than during earlier peak cycles.
November Forecasts
The ongoing downturn has led to unprecedented liquidation levels, with over $19.2 billion in liquidations recorded on October 10, the largest single-day event in history. An additional $3.9 billion was liquidated last week, highlighting the stress on leveraged traders within the derivatives sector.
Looking ahead, the current trajectory suggests that November will end negatively. Historically, this month has provided average returns of 40.8% and a median return exceeding 8.2% since 2013. If bearish trends continue, November will mirror October, which saw its first red close in seven years.
