After seemingly only going up for the last month, Bitcoin (BTC -2.10%) is finally retracing some of the gains it made. With some of the dust settling, Bitcoin is changing hands at around $63,000 at the time of writing, a near 15% drop. Yet, these types of corrections are healthy and par for the course.

If anything, investors should consider this dip as a healthy correction needed to make the next leg up. For those with sidelined cash who are waiting for an opportunity to grab some more Bitcoin, the recent pullback looks all the more enticing.

Some necessary context first

Even when Bitcoin is in a bull market, it can experience significant declines. In fact, if this recent dip has run its course, it would be a relatively small one compared to those of years past.

In a recent post on X, crypto analyst Jelle provided some excellent context on the current situation by charting notable dips that Bitcoin underwent during bull cycles. It isn't hard to see that this type of dip is nothing new for Bitcoin.

Take a look back at the last bull run in 2021. Bitcoin suffered more than four drawdowns of 20%. Going back further, the average pullback during the bull market of 2017 was even greater, hovering around 30% and at times falling by as much as 40%.

The common theme among these cycle dips is that none of them proved to be substantial enough to keep Bitcoin from eventually notching a new all-time high. It could be argued that, if anything, they are necessary to shake out weak hands and build up leverage that needs to be cleared before making the next leg up.

A sign of what's to come

While the greatest gains for this bull cycle would have come from investing in Bitcoin during the depths of the crypto winter when its price was below $20,000, that doesn't mean this bullish cycle can't still produce some gains.

Bitcoin has made a name for itself by surpassing previous all-time highs by orders of magnitude with each cycle that passes. There's no telling just how high this one could go, but what is of more certainty is that Bitcoin is just warming up for what's to come.

Data backs up this claim. Arguably, my favorite gauge of Bitcoin's current position is the Market Value to Realized Value ratio, or MVRV.

Market value is calculated by multiplying Bitcoin's circulating supply by its current price. It is the same as the market capitalization. Then there is realized value, which measures the price of each Bitcoin the last time it was transacted. This provides a more detailed insight, as it removes the assumption that every bitcoin in circulation was purchased at the most recent price.

By dividing the two, we get MVRV and a much clearer glimpse into Bitcoin's current position relative to past cycles. MVRV has historically proven to be a timely indicator of when a peak is near. With its current value at just 2.5, Bitcoin has some room to run before it reaches levels of around 7.5, when bull markets begin to lose steam.

The bottom line

While our brief analysis remains confined to this cycle, we can't forget that with Bitcoin, this is a long-term game. It may sound sensational, but there is a compelling case for Bitcoin to one day reach $1 million. If you aren't familiar with this theory, look up the work of former physics professor Giovanni Santostasi's application of the Power Law to Bitcoin. When it's all said and done, the difference in terms of gains made between buying Bitcoin at $73,000 or $63,000 should it one day reach seven figures would be negligible.

In full recognition that these types of pullbacks can be difficult to stomach, we must remember that they probably are but minor speed bumps on Bitcoin's journey of long-term price appreciation. If you have the conviction and available capital, consider this drawdown as a valuable opportunity.