Bitcoin’s 47% Rebound May Not Signal a Definitive Bottom
Bitcoin (BTC) has staged a 47% rebound since hitting a low of $57,800 on July 1, climbing to $84,880 by October 1. However, historical data suggests this rally may not yet signal a definitive bottom. Binance Research analyzed past cycles and found that in four out of five similar cases, Bitcoin retested its low after an initial rebound.
The current drawdown of 54.2% from Bitcoin's October 2023 peak of $126,200 is smaller than the 77.6% to 86.9% declines seen in previous bear markets. Yet, when adjusted for volatility, the current downturn aligns with past cycles. Bitcoin’s annualized volatility has dropped to 47%, down from about 99% in earlier cycles, but the volatility-adjusted drawdown remains consistent with previous bear markets.
Macroeconomic factors, particularly high yields on the 10-year U.S. Treasury, are limiting Bitcoin’s recovery potential. Despite a drop in the probability of a U.S. rate hike in October, long-term Treasury yields remain near a 24-year high, posing a challenge for further gains in Bitcoin.
Meanwhile, crypto-related stocks saw significant inflows, with $71.4 million of the $163 million total net inflows into stock products on Binance between September 28 and October 2 directed toward companies like Circle, Strategy, and BitMine.