Bitcoin hit all time highs near USD 20,000 in December 2017 and since then has been in a constant decline which has seen its price drop roughly 66% to USD 6,750 as of this writing, shaving USD 210 billion off of its market cap. This has caused much gloom and stress among investors and traders, especially all the new investors that were attracted to Bitcoin during its historic price rise.
Many people seems to think BTC price was flat before this year, as they appear to be on the graph. To the old timers, it's the same pattern every year. Just the units on the left is different. pic.twitter.com/mwu8U3jn0J
— CZ (@cz_binance) June 10, 2018
Since the time Bitcoin started in 2009 there have been many sharp and sustained declines in its price after hitting all-time highs.
As Zhao shows in his graph, the price of Bitcoin dropped from USD 35 in June 2011 to USD 2 in November 2011, a 94% drop. In April 2013, Bitcoin hit nearly USD 200 before dropping to USD 70 in July 2013, a 65% drop. In December 2013, Bitcoin broke the USD 1,000 milestone for the first time and went all the way up to USD 1,166, and then declined to USD 170 USD by January 2015, an 86% drop.
History shows that there have been even more drastic price declines than what the market has experienced during 2018. It is normal for the Bitcoin market to be extremely volatile in the long term with drastic boom and bust patterns.
On average, in the long term Bitcoin has been going up rapidly. In 2009 when Bitcoin launched, it was worth less than a penny, now it’s worth thousands of USD. The fact of the matter is that after every Bitcoin decline, Bitcoin rebounds and hits all-time highs, often an order of magnitude higher than the previous all-time highs.
Based on past market behavior of Bitcoin declining on the order of 90% after hitting peaks, it could be possible that the current price decline still has some ways to go. Indeed, some Bitcoin analysts are saying Bitcoin will go below USD 5,000. This may end up being a great opportunity to buy Bitcoin cheap, since if past market behavior continues, Bitcoin will go all the way back up to USD 20,000 and way beyond.
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