Is this plunge the 312 of this round of bear market?
This sharp decline should not make us pessimistic; instead, it should make us optimistic, excited, and enthusiastic.For this crash, many influencers have compared it to the 312 event during the transition from the last bear market to the bull market.
Since many people have mentioned this, let's review the trends in the crypto market before and after 312 (March 12, 2020).
The best way to review history is to examine the data.
Let's take Bitcoin as an example to see what happened in the entire crypto market around the time of 312.
The above chart shows Bitcoin's price movements from May 2019 to July 2021. This is what I consider to be the most typical and characteristic segment of the entire 312 process.
During that bear market, Bitcoin reached a peak of $13,000 on June 27, 2019, and then plummeted from $7,900 on March 12, 2020, to $5,140 on March 13.
After that, Bitcoin entered a vigorous bull market that would not look back:
It reached the first peak of that bull market at $63,000 on April 16, 2021;
Then it experienced a significant correction, dropping to a low of $30,000 in July 2021;
Finally, it reached the true peak of that bull market at $67,000 in November 2021.
From these data points alone, the 312 event has the following characteristics:
After reaching the high point of the previous bear market ($13,000), Bitcoin remained in a downward trend until the crash on 312.
Before the 312 crash, Bitcoin's price ($7,900) was almost only 60% of the bear market high ($13,000).
In the days following the 312 crash, Bitcoin's price was less than half of the previous bear market high ($13,000). The initial drop from this flash crash exceeded 30%.
Was $5,140 on March 13 the lowest point of the 312 crash? No, it further declined to around $5,000 on March 17.
Bitcoin only began its real upward bull market after the 312 crash; however, this process was not immediate, as it lingered below $10,000 for more than half a year, only breaking through the previous bear market high ($13,000) in October 2020.
In the subsequent bull market, before truly reaching its peak in November 2021, Bitcoin's price never fell below the price after the 312 crash. Even during the significant correction in July 2021, Bitcoin's lowest price was only $30,000, which is far above its bear market high ($13,000).
Among these five characteristics, the first three are verifiable now, while the last three still need time to prove.
Before verification, let's look at the market conditions before this flash crash:
In this bear market, Bitcoin's previous high was $73,000 on March 14 of this year.
Before the flash crash yesterday, Bitcoin's price was $60,000.
After the flash crash yesterday, Bitcoin's price briefly dropped to a low of $49,000.
Comparing these data points with the first three characteristics mentioned above, we can find:
The first point is barely close;
The second and third points do not match well—this flash crash's drop was much less severe compared to 312.
Therefore, I believe this so-called "flash crash" is merely a relatively normal and slightly larger drop within the bear market.
However, if this drop can indeed be the last major decline in this bear market like 312, and if the subsequent situation can truly replay the market trends after 312, then it would be quite a stretch of the imagination.
Because:
After 312, Bitcoin's peak in the subsequent bull market exceeded ten times the price after the 312 crash.
Can such an increase be replicated in the upcoming bull market?
If so, then this significant drop should not make us pessimistic; instead, it should make us optimistic and excited.
