This week’s $11,000 drop occurred in just 32 hours and this definitely an important milestone for Bitcoin (BTC) price.
Many mainstream media outlets perceived the correction as the start of a new bear market but data simply does not support this line of thinking.
Bitcoin price may have corrected 26.5% as if dropped to retest the $30,300 support but it has since shown significant strength amidst a record-high $160 billion in derivatives volume.
Spot exchanges also outpaced their previous record high that was set just three days ago on Jan.9 as BTC soared to a new all-time high at $41,950. The incredible $27.7 billion in volume seen on Jan.11 was 60% higher than the previous peak.
By itself, Binance exchange-traded $9 billion worth of BTC, which is more than double the entire industry average seen in December 2020.
The infamous 50% intraday crash on March 12, 2020, resulted in $8 billion volume on spot exchanges. To put things in perspective, Ether (ETH) traded $16 billion volume on Jan. 11.
Despite the recent bearish price action and this week’s $1.5 billion in long liquidations, Bitcoin has bounced back by over 13% from the $30,300 bottom.
Even though the price failed to sustain the $36,000 level seen in the early hours of Jan. 12, investors seem relatively tranquil and trading volumes are not pointing toward further correction.
GBTC still has a noticeable premium
Although this event might have spooked some buyers, looking under the hood, it is a very healthy sign. Another factor to consider is that Grayscale’s GBTC funds added 72,950 BTC in December but suspended new shares issuance on Dec. 24. Meanwhile, Bitcoin almost doubled from $23,200 to its $42,000 peak.
The fund manager has now resumed its regular activity for most crypto trusts, raising the question of whether initiated…