By Anthony Pompliano, Founder of Professional Capital Management
Translated and Compiled by Jinse Finance
Decoding Bitcoin’s 30% Correction: What the Data Reveals
Bitcoin’s recent 30% correction from its all-time high of $126,000 on October 6th has left many investors disillusioned. With year-to-date gains turning negative and a paltry less than 1% increase over the past 12 months, market sentiment, particularly online, appears overwhelmingly negative. Social media platforms like Reddit or X can often act as echo chambers, amplifying fear and uncertainty. To cut through the noise, let’s examine what the underlying data truly reveals about Bitcoin’s current state, through five critical charts.
1. Bitcoin’s Price vs. Global Liquidity: A $7 Trillion Discrepancy
According to data from Zerohedge, a striking divergence has emerged: “The last time Bitcoin traded at its current price, global liquidity was $7 trillion lower than it is today.”
This data point challenges long-held expectations, including my own, that Bitcoin’s price would converge with increasing global liquidity. The failure of this correlation to materialize has led many to question whether fundamental shifts are underway in the market, perhaps influenced by Wall Street’s growing embrace of digital assets. Regardless of the underlying causes, the undeniable reality remains: Bitcoin has experienced a significant 30% decline over the past six weeks.
2. The Third 30% Retracement of This Cycle
Market analyst James van Straten highlights that the current downturn marks “the third 30% retracement” within Bitcoin’s ongoing cycle. A notable trend is the acceleration of these corrections: the time taken from peak to trough has progressively shortened, amplifying market panic.
- August 2024 (JPY arbitrage): 147 days
- April 2025 (Tariffs): 77 days
- November 2025: 42 days
3. Entering Oversold Territory
Data from CoinBureau confirms that Bitcoin’s daily Relative Strength Index (RSI) has plummeted to 26. This is its lowest level since February, signaling that Bitcoin has entered a deeply oversold region.
Such readings typically suggest that an asset’s price has fallen too far too fast and may be due for a rebound.
4. Short-Term Holders Face Significant Losses
Quinten Francois points to a similar dynamic within the profit/loss distribution of short-term holders. Astonishingly, over 95% of all tokens acquired within the last 155 days are currently underwater.
This widespread loss among recent buyers is a potent catalyst for market panic and a severe blow to overall sentiment. While such conditions can persist, markets rarely remain depressed indefinitely. Eventually, an asset’s price will reach a level attractive enough to draw investors back in. Whether Bitcoin finds its footing at $90,000 per coin or even lower remains to be seen; the precise threshold for a sustained recovery is elusive.
5. Bitcoin Whales Are Accumulating
In a contrasting development, André Dragosch of Bitwise reports that Bitcoin ‘whales’ – entities holding over 1,000 BTC – have suddenly initiated aggressive buying at current price levels.
This suggests a strategic accumulation phase by large holders, capitalizing on the market’s downturn.
Conclusion: Navigating the Storm
The current market landscape presents a paradox: Bitcoin’s price has plummeted despite a surge in global liquidity. The asset is now deeply oversold, a condition that appears to be attracting significant buying activity from these influential whales. The broader market sentiment, as reflected by the Fear & Greed Index, remains stubbornly below 20.
This confluence of volatility, confusion, and uncertainty defines the long-term experience of Bitcoin holders. Historically, those who maintain composure and conviction amidst widespread panic have often been rewarded. However, as always, such resilience is far easier preached than practiced.
(This content is an authorized excerpt and reprint from our partner PANews. Original Link | Source: Jinse Finance)
Disclaimer: This article provides market information only. All content and views are for reference only and do not constitute investment advice. They do not represent the views or positions of BlockTempo. Investors should make their own decisions and trades. The author and BlockTempo will not bear any responsibility for direct or indirect losses resulting from investor transactions.
