Bitcoin’s 4th Weekly Decline: Worst Correction Since FTX Collapse

According to analysis from crypto exchange Bitfinex, Bitcoin’s current downturn represents the most severe correction in the current market cycle. The leading digital asset has fallen 30.6% over the past four weeks, surpassing the 24.1% decline recorded during the consolidation phase between March and October 2024. Last week alone, BTC recorded a peak-to-trough decline of 16%, closing the 7-day period with an 8.65% plunge that extended the total drawdown from its all-time high to 36%.

The scale of this correction is unprecedented in the current cycle, both in percentage terms and in the magnitude of long liquidations. The market structure reveals that BTC supply between $106,000 and $118,000 was far denser than in previous cycle peaks, indicating the market had become top-heavy before the ongoing correction began. This concentration of holdings at higher price levels has amplified the current sell-off pressure as prices decline below key support levels.

The Bitfinex report highlights that short-term holders—those holding BTC for 155 days or less—are experiencing significant distress and capitulating at alarming rates. This investor cohort is accelerating 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 realized losses has surged to $523 million per day, marking the highest level recorded since the collapse of crypto exchange FTX.

Recent BTC buyers are being forced to exit their positions amid mounting unrealized losses, creating a cascade of selling pressure. The acceleration in loss realization demonstrates how vulnerable the market had become following the extended rally. The current level of distress among short-term holders suggests that the market cleansing phase may continue until weaker hands have been largely flushed out of the system.

The severity of the current downturn is reflected in unprecedented liquidation activity across crypto derivatives markets. The single-day liquidation event of October 10, which saw $19.2 billion in positions liquidated, stands as the largest in history. Last week added another $3.9 billion in liquidations, underscoring the intense pressure on leveraged traders throughout the derivatives sector.

Historical patterns are also being broken as the market appears set to end November on negative terms. Since 2013, November has historically yielded an average return of 40.8% for Bitcoin with a median return exceeding 8.2%. If current bearish conditions persist, November 2024 will follow October, which closed in negative territory for the first time in seven years. This deviation from seasonal norms signals a fundamental shift in market dynamics and investor sentiment.

The combination of record liquidations, breaking of historical seasonal patterns, and sustained selling pressure from distressed short-term holders paints a picture of a market undergoing a significant structural correction. As Bitfinex analysis indicates, the current phase represents not just a typical pullback but a fundamental recalibration of market positioning and investor expectations following the extended rally earlier this year.