#PCEInflationWatch History Repeats: Big Crypto Pumps Followed by Big Corrections
The cryptocurrency market is no stranger to big spikes and big drops. Historically, every major hype-driven rally has been followed by a significant correction. Let’s take a look at some of the key moments in Bitcoin’s history, analyze the patterns, and assess what might happen next.
1. China's cryptocurrency approval (2019)
BTC Pump: Bitcoin surged to about $13,800 in June 2019 following speculation about widespread adoption due to China's interest in blockchain.
The hype: Widespread optimism as investors believe in the revolutionary potential of blockchain across industries.
BTC Correction: Bitcoin's price dropped 52% in the following six months, falling below $7,000.
2. Tesla adds BTC to its balance sheet (2020)
BTC Pump: Bitcoin surged from about $40,000 to an all-time high of around $64,000 in April 2021, driven by Tesla's widespread adoption.
The excitement: The cryptocurrency market became more vibrant as widespread adoption seemed imminent.
BTC Correction: By July 2021, Bitcoin had lost about 53% of its value, down to around $30,000.
3. Elon Musk's influence on cryptocurrency (2021)
BTC Pump: Musk's tweets and support for Dogecoin helped Bitcoin reach ~ $69,000 in November 2021.
The hype: Retail investors flocked to the market, anticipating unlimited price increase potential.
BTC Correction: The bubble burst, Bitcoin plummeted about 50% to around $35,000 in January 2022.
4. Legal tender status for Bitcoin in El Salvador (2022)
BTC Pump: El Salvador's groundbreaking decision caused Bitcoin to spike to about $52,000 in September 2021.
