What is a Bitcoin Correction and How is it Different from a Crash in Crypto?

Bittime - The price of Bitcoin (BTC) recently surpassed the $9,000 mark, bringing optimism to many investors. However, even though Bitcoin shows a positive trend, many analysts predict that Bitcoin will experience a correction in the near future. 

So, what exactly is meant by a "Bitcoin correction" and how is it different from the "Bitcoin crash" phenomenon? This article will explain more about both and what they mean for you as an investor.

Understanding Bitcoin Corrections

A Bitcoin correction is a price drop that occurs after a sharp price spike. Usually, this occurs when the price of Bitcoin is considered too high and the market makes adjustments to return the price to a more reasonable level. 

In its history, Bitcoin has experienced massive price declines, such as in 2011 (94%), 2013 (87%), and 2017 (84%), although Bitcoin prices continue to recover in the long term.

What is a Bitcoin Crash?

In contrast to a correction, a Bitcoin crash is a very sharp and rapid drop in price, often more than 30% in a short period of time. These crashes are usually caused by large external factors, such as regulatory issues, policy changes, or profound market events. For example, in 2018, Bitcoin experienced a major crash after reaching a price of nearly $20,000, and the price of BTC fell sharply to below $6,000 within a few weeks.

Crashes are more destructive than corrections because prices can drop drastically in a short period of time, often causing great uncertainty in the market.

Correction vs Crash: The Difference

The main difference between a correction and a crash lies in their intensity and duration. A correction is a more moderate price decline, usually about 10% to 20% from the previous price peak, and can last for several weeks or months. Corrections are usually followed by long-term price recovery.

Meanwhile, a crash is a much sharper and more rapid drop in prices, which is often accompanied by very high volatility. In the case of a crash, prices can fall more than 30% in a short period of time and often take much longer to recover.

Why Did the Bitcoin Correction Happen?

Bitcoin's correction occurred due to high volatility which is a key characteristic of the cryptocurrency market. After a rapid price spike, there is often a price drop to adjust to more realistic market values. This can be triggered by factors such as excessive speculation or the influence of large market news.

Also read: Latest Bitcoin Price Prediction: Could It Break $102,000 Later This Month?

Has a Bitcoin Correction Already Happened?

Even though Bitcoin recently topped $9,000, some analysts believe that the correction is not over yet. Bloomberg reports that technical indicators suggest that Bitcoin may be too high and could soon experience a correction. The GTI Vera Band indicator, which monitors price trends, suggests that Bitcoin's price spike in early 2020 is at risk of being followed by a decline.

Correction: Opportunity or Risk?

For investors, price corrections are often seen as an opportunity to buy Bitcoin at a lower price. The basic principle of investment is to buy when prices are low and sell when prices are high. However, because the cryptocurrency market is highly volatile, risks remain. Make sure to only invest within your means and don't rely too much on speculation.

Conclusion

Corrections and crashes are two different phenomena in the cryptocurrency market. A correction is a moderate decline in prices and is usually followed by a price recovery, while a crash is a sharp decline that is more difficult to predict. 

For long-term investors, a correction may not be a big deal, but a crash can greatly impact the market. If you plan to buy Bitcoin, make sure to understand these differences and only invest according to the risk you are willing to take.

Also read: Bitcoin Price Prediction 2025 According to Crypto Academy: Get Ready To The Moon!

FAQs About Bitcoin

What are Bitcoins?

Bitcoin is the world's first crypto asset and the largest crypto asset by market capitalization. Bitcoin was first created in 2009 by Satoshi Nakamoto, whose true identity until now no one knows.

How many Rupiah is 1 BTC?

Currently, 1 BTC is worth IDR 1,568,299,549 based on the Bittime market. 

1 BTC How much is USD?

Currently, Currently, 1 BTC is worth $98,080 according to Coinmarketcap. 

How to Buy Crypto on Bittime

Want to trade sell buy Bitcoins and crypto investment easily? Bittime is here to help! As an Indonesian crypto exchange officially registered with Bappebti, Bittime ensures every transaction is safe and fast.

Start with registration and identity verification, then make a minimum deposit of IDR 10,000. After that, you can immediately buy your favorite digital assets!

Check the exchange rate BTC to IDR, ETH to IDR, SOL to IDR and other crypto assets to find out today's crypto market trends in real-time on Bittime.

Also, visit the Bittime Blog for interesting updates and educational information about the crypto world. Find reliable articles about Web3, blockchain technology, and digital asset investment tips designed to enrich your crypto knowledge.

Reference:

I did, Mike, Media Coindesk, accessed November 25, 2024.

Coin Rivet, Media Coin Rivet, accessed November 25, 2024.

Coin Market Cap, Media Crypto Coin Market Cap, accessed November 25, 2024.

Author: MF