Analysis indicates Bitcoin’s extreme deviation from its long-term moving average has reached a statistically unprecedented level, making a price recovery “highly probable.” Data shows BTC’s current -2.88 standard deviation below its 200-day average has never occurred before, even during major historical sell-offs. The recent crash represents one of Bitcoin’s 15 fastest drawdowns, now described as a “macro-driven” bear market.
Bitcoin’s long-term investment thesis is “intact” according to Martin Leinweber, who notes the cryptocurrency is at a historic statistical extreme. Bitcoin is -2.88 standard deviations below its 200-day simple moving average, a situation Leinweber stated has “literally NEVER happened before. Not during COVID. Not during FTX. Never.” This week’s drop of over 22% places it among Bitcoin’s 15 fastest price drawdowns in history.
Analysts describe the current market environment as a “macro-driven” bear market rather than a failure of the underlying technology. The dip below $60,000 has been characterized as far from normal, with the extreme positioning suggesting mean reversion is now likely. The analysis shows Bitcoin’s deviation is more extreme than that of Ether or Solana.
Recent trading saw Bitcoin’s first-ever $10,000 red daily candle, surpassing liquidations from past bearish events. Sentiment gauges have plunged to extreme lows, echoing the scale of the sell-off. Signs that large-volume investors were buying the dip emerged, with a focus on hedge funds and the exchange Binance.
Trader Daan Crypto Trades highlighted the wipeout of large leveraged positions after a 38% price decline in weeks. He noted it is a “Great time if you are more cash heavy and have the patience to accumulate or profit from the volatility.” While a long-term price bottom may not yet be in, the current statistical extremes across multiple indicators are being closely watched.
