The BTC correction has extended the drawdown from its all-time high to 36%, making it the largest in this cycle, both in percentage and in the scale of long liquidations.
Bitcoin (BTC) ended last week with negative returns amid the broader crypto market’s continued decline. Analysts at the crypto exchange Bitfinex revealed in a weekly report that the record marked the fourth consecutive weekly decline for the leading digital asset.
According to Bitfinex, the last time BTC recorded four straight weeks of negative returns was during the lengthy consolidation phase between March and October 2024. However, at the time, the peak-to-trough plunge was roughly 24.1%. This time, BTC has fallen 30.6% over the past four weeks.
BTC Corrective Phase Continues
Last week, BTC recorded a peak-to-trough decline of 16%, closing the 7-day period with an 8.65% plunge. The correction has extended the drawdown from its all-time high to 36%, highlighting the ongoing decline as the largest in this cycle, both in percentage and in the scale of long liquidations.
Amid the drawdown, short-term holders (those holding BTC for 155 days or less) are capitulating. This investor cohort is seeing an acceleration in selling at a loss, with BTC falling below the lower band of their cost-basis model. The seven-day Exponential Moving Average of short-term holder realised losses has risen to $523 million per day. This is the highest level recorded since the collapse of the defunct crypto exchange FTX.
Currently, there is a high level of distress among recent BTC buyers. They have been forced to exit their positions amid mounting unrealized losses. This level of loss realization shows how top-heavy the market became before the ongoing correction – the BTC supply between $106,000 and $118,000 was far denser than in previous cycle peaks.
November to End on Negative Note
The current downturn is so severe that the market has recorded unprecedented liquidation activity. The $19.2 billion liquidation event of October 10 is the largest seen in a single day in history. The market saw an additional $3.9 billion in liquidations last week, underscoring the pressure on leveraged traders across the derivatives sector.
Meanwhile, the market is on track to end November on negative terms. This month has historically yielded an average return of 40.8% and a median of over 8.2% since 2013. If the bears persist, then November will follow October, which closed in the red for the first time in seven years.
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