Will Bitcoin See Another ‘Thanksgiving Day Massacre’?
Nearly four years ago today, Bitcoin experienced a 17% plunge in 2020, falling from $19,500 to $16,200, an event known as the infamous “Thanksgiving Day Massacre.” As the holidays approach again, market participants are questioning whether history will repeat itself.
Bitcoin price experienced an 8% correction on Monday and Tuesday, falling from $98,871 to a low of $90,791. This sudden downturn has prompted analysts to discuss whether history with Bitcoin prices will repeat itself.
Bitcoin “Thanksgiving Massacre” in 2024?
Alex Thorn, head of research at Galaxy Digital, draws on the X Similarities Between the current market and the events of 2020. “Who remembers the 2020 Thanksgiving Day crash? Bitcoin fell 17% between Wednesday, November 25, and Friday, November 27, 2020. BTCUSD subsequently rose more than 3x over the next 5 months. History Does it rhyme?”
A potential catalyst for the collapse could be Global M2 money supply. Currently, a chart of the correlation between Bitcoin and global M2 is circulating on X.
Joe Consorti, Theya Analyst, observed Since September 2023, “Bitcoin has closely tracked global M2, with a lag of about 70 days.” Over the past two months, global M2 has fallen from $108.3 trillion to $104.7 trillion, due to factors including a stronger U.S. dollar (foreign currency denominated M2 depreciates when converted to U.S. dollars) and an economic slowdown dampens loan and deposit creation, among other factors.
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Consorti warned that “if M2 continues to contract, a 20-25% correction could materialize and Bitcoin could fall to around $73,000 — this is not a price prediction, but a stark reminder of Bitcoin’s relationship with global currencies. Supply links.” However, he also acknowledged that Bitcoin may challenge this trend as it has in the past, especially “from 2022 to 2023 due to FTX crashes As a result, interest in the space disappeared. “
He suggested structural ETF inflows Corporate buying pressure may help Bitcoin withstand the current M2 deflation. Consolti concluded: “In any case, the current correction seems to be correct. As mentioned before, the rapid rise of Bitcoin’s price will always encounter pauses, (…) Understand what you hold, what it is “The macro environment and the forces driving it higher over the long term are critical. If you truly understand Bitcoin, you won’t panic sell.”
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Despite the cautious outlook, some analysts believe the decline may be short-lived. Jamie Coutts, Chief Crypto Analyst at Real Vision, point out via , especially on leverage, but Kutz highlighted potential policy shifts that could favor risk assets.
He cited economist Andreas Steno’s insight, noting that the Fed is “actually discussing put options on dollar liquidity, changes that would support liquidity developments as early as December.” Coutts concluded: “The U.S. Dollar Index may have peaked. The lag effect of Fintwit’s focus on ATMs is still real, but ultimately, the Fed is once again waving the bull flag for risk assets. Bullish on 2025. Bullish on BTC.”
At press time, BTC was trading at $93,250.
Featured image created using DALL.E, chart from TradingView.com
