Bitcoin has plunged to $76,589 before rebounding above $80,000, echoing previous market corrections that preceded greater gains according to industry leaders.
Bitcoin suffered a steep correction, dropping to $76,589 before recovering. The price sits at $80,631 at press time. It remains 27% below its January 20 all-time high of $109,900.
Industry experts see parallels to previous market cycles. Many dismiss panic reactions as typical during Bitcoin's volatile history.
Bill Barhydt, founder and CEO of Abra, emphasized the repetitive nature of Bitcoin downturns. "Ya'll never change. Bitcoin is now experiencing its 11th 25%+ correction in ten years," he wrote on X. "Every time everyone reacts like the sky is falling and every time everyone screams that it's different this time."
The digital asset executive drew direct comparisons to 2017's market conditions. "This pullback looks, smells and feels 100% just like 2017 to me. Rising fiat liquidity leading to massive asset price gains," Barhydt stated.
He suggested monetary policies could continue driving capital into risk assets. Barhydt noted the US administration's apparent strategy to lower treasury rates. This approach aims to refinance debt, unlock housing markets, and address bank solvency issues.
"China is in a deep recession and needs lower US rates to support its own money printing regime," Barhydt wrote. "And print they will."
The Abra CEO predicted substantial job reductions across government, technology and housing sectors. He expects the Institute for Supply Management (ISM) index to rise in coming months. "All of this tells us liquidity will continue to flow and the markets will do what they always do in this type of cycle. That liquidity will flow into stocks, Bitcoin, crypto and real estate. Once again… buckle up," he concluded.
ARK Invest CEO Cathie Woods shared a similar outlook. She suggested markets are "discounting the last leg of a rolling recession." This economic environment could provide unexpected flexibility for both the Trump Administration and Federal Reserve, Woods noted.
"In our view, the market today is discounting the last leg of a rolling recession, which will give the Trump Administration and the Powell Fed many more degrees of freedom than investors expect, setting up the US economy for a deflationary boom in the second half of this year," she posted on X.
Not all voices express optimism. Charles Edwards, founder of Capriole Investments, urged caution. He identified S&P 500 performance and credit spreads as crucial indicators for determining market direction.
"SP500 is crashing. Is this a dip opportunity or the start of something bigger?" Edwards questioned. He noted sentiment metrics suggest a buying opportunity, but other indicators point to potential trouble.
Edwards highlighted concerning signals in bond markets. "Importantly, credit spreads and Junk/Treasuries are at key inflection points. When the big dog money moves out of risk to treasuries, you do not want to be exposed," he warned.
The investment expert elaborated on market mechanics. "It simply means the market is allocating more to risk-off assets. Markets tend to trend, especially bond markets, so this level would mark the potential start of a new risk-off trend," Edwards wrote. He emphasized how fear can accelerate market shifts "as panic/fomo sets in."
Bitcoin traded at $79,848 at press time.