#BVL034: That escalated quickly
Last week in BVL033, we started to see solid evidence we’d entered a bear market. Since then, we have seen one of the most volatile periods in recent times, with Bitcoin dropping on 5 Feb at one stage by $13k, only to gain $10k over the following 24 hours. The speed of the dip (and partial recovery) took everyone including us by surprise, as we honestly didn’t see Bitcoin dipping below $75k this soon.
Some commentators have suggested we’ve reached a market bottom, based on comparisons to past cycles. As always, we don’t get caught up in the discussion of how Bitcoin “should” behave, but instead look at what the data tells us each week, with particular emphasis on trends around actual flows of capital into and out of the network.
The key question we address in this newsletter is whether the data points to the rebound from $60k being the start of structure rebuilding, or if it is just short-term relief with several legs lower left in the bear market?
