Bitfinex report: Bitcoin begins to recover after experiencing the largest correction in this cycle

BlockBeats news, on August 12, Bitfinex released a report saying that last week, Bitcoin rebounded strongly, rising nearly 28% from the recent low of nearly $49,000, the lowest price since February. This rebound has brought BTC back to the key $60,000 level after a sharp sell-off in August, with prices falling 33.32% from the cycle high and all-time high of $73,666. This is the largest correction in the current cycle.

Key indicators such as the Mayer Multiple (which compares the current price of Bitcoin with its 200-day moving average (200DMA)) provide us with insights into the severity of this correction. During the recent decline, the Mayer Multiple fell to 0.88, a level not seen since November 2022, indicating that Bitcoin is trading significantly below its historical average trend and has entered a strong bearish phase.

On-chain data also highlights the intensity of this sell-off. The short-term holder realized price (STH cost basis), the average purchase price by recent buyers, is currently $64,860. The Bitcoin spot price recently approached a -1 standard deviation (SD) range below this STH cost basis, which has historically only occurred on about 7.1% of trading days. This shows the severity of current market conditions.

The short-term holder MVRV ratio, which compares the current market price to the purchase price of new investors, shows that this group is holding the largest unrealized losses since the 2022 bear market low. Overall, these indicators point to increased bearish sentiment and pressure among short-term investors, which typically occurs at local lows.

The U.S. economy continues to show resilience despite ongoing concerns about a potential slowdown, with recent data supporting a more optimistic outlook. Last week, a notable drop in unemployment claims and a solid build in wholesale inventories provided a solid foundation for growth, especially in the second quarter, as U.S. wholesale inventories played a key role in the economic expansion.

In the latest news in the crypto space, Harris has emerged as a front-runner in the 2024 U.S. presidential race, narrowly leading Trump in betting odds and recent polls. As her campaign continues to gain momentum, so too has speculation about her possible stance on cryptocurrencies, especially as her team has begun reaching out to industry executives. Such outreach hints that cryptocurrency policy could take center stage in the coming months, sparking interest and anticipation in the crypto community.

Meanwhile, major financial institutions such as BlackRock and Nasdaq have made inroads in the digital asset market, recently filing with the U.S. Securities and Exchange Commission (SEC) to launch options trading on the BlackRock Spot Ethereum ETF. The move comes on the heels of the SEC's approval of several high-profile companies to launch ETFs tied to Ethereum, marking a significant expansion of digital asset investment options. As these developments unfold, the SEC continues to play a key role in shaping the cryptocurrency landscape, as evidenced by its recent decision to delay approval of Hashdex’s proposed ETF. The ETF, which is designed to directly hold spot Bitcoin and Ethereum, was postponed until September 30, 2024, reflecting the SEC’s cautious approach in carefully evaluating the impact of new digital asset products on the market.