Analyst Recto Capital recently delved into the question, “Is Bitcoin headed for a 40% correction?” He has been discussing this topic for some time, and in his latest video he explored the pattern of correction periods in the Bitcoin cycle. Analysts looked at the duration of these corrections, how long they typically last, and how they impact the current cycle compared to historical norms.
In November 2022, he identified only five major corrections for this cycle. Historical decline rates from the bear market bottom in November 2022 have ranged from 23% to 22%. However, the recent correction in April 2024 started as an 18% decline and deepened significantly.
Rather than viewing this as two separate 18% retraces, Rekt Capital suggests that it is better to understand it as one extended correction period. This rebound was the deepest this cycle and exceeded the previous 23% correction.
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Recto Capital said that historically when Bitcoin approaches a downside of around 20%, there has been a great buying opportunity before a reversal. This correction is now over 20% and they see this as an even better opportunity. They believe there is little room for further decline, estimating the decline to be around 24%.
Previously, Bitcoin's correction period lasted from the 21st to the 63rd. The current adjustment period has been 49 days since March, making it one of the longest in the cycle as it approaches the two-month milestone. Recto Capital sees this as a sign that the correction could soon bottom out.
He also discussed the importance of the Bitcoin cycle's adjusted consolidation period. Analysts noted that such periods usually precede the parabolic phase of the cycle. Despite concerns about the duration of the current consolidation, Rekt Capital believes it is an opportunity for Bitcoin to realign into a historic halving cycle, leading to a bull market peak in mid-September to mid-October of 2025. I see a possibility of a connection.
