According to CoinGecko, the global cryptocurrency market has experienced several significant corrections over the past decade, with the most severe occurring during the COVID-19 pandemic. On March 13, 2020, the market saw a dramatic -39.6% drop, marking the worst single-day correction in crypto history. The total market capitalization plummeted from $223.74 billion to $135.14 billion within just 24 hours.
2024: A Milder Year for Market Sell-Offs
In comparison, the largest market sell-off in 2024 has been relatively mild. On March 20, 2024, the market experienced an -8.4% decline, significantly less severe than past corrections. Additionally, while the market saw four consecutive days of decline from August 2 to August 6, 2024, reducing the total market capitalization from $2.44 trillion to $1.99 trillion, none of these decreases met the threshold for a market correction.
Interestingly, there has not been a single day of market correction since the collapse of FTX in November 2022.
Major Historical Corrections
Bitcoin and Ethereum, two of the largest cryptocurrencies by market capitalization, also saw their most significant price corrections during the Covid-19 pandemic. On March 13, 2020, Bitcoin recorded a -35.2% drop, while Ethereum faced a -43.1% decrease as investors fled risk-on assets amid global uncertainty.
The second-largest crypto correction occurred on September 14, 2017, when the market experienced a -22.3% pullback, coinciding with Bitcoin's third-largest price correction of -20.2%. Despite this volatility, both the crypto market and Bitcoin quickly recovered, highlighting the high volatility inherent in the cryptocurrency space.
Duration and Frequency of Corrections
Crypto market corrections, defined as decreases of 10% or more in total market capitalization, have been relatively short-lived. The longest corrections have lasted only two consecutive days. From 2014 to 2024, there have been three instances of such consecutive corrections, notably in early 2018 during a market cooldown, and in late 2022 following the FTX collapse:
January 16-17, 2018: -11.8% and -13.4%
February 5-6, 2018: -10.3% and -19.0%
November 9-10, 2022: -10.1% and -13.5%
While there have been instances of back-to-back corrections, these typically did not occur on consecutive days. For example, during the Terra Luna collapse in 2022, the market dropped by 12.0% on May 10, briefly stabilized, and then fell by another 11.0% on May 12.
Crypto Market Resilience
Despite the volatility, crypto market corrections have been relatively rare, accounting for just 1.6% of the time from 2014 to 2024. The average correction during this period was -13.0%. Notably, the market saw zero days of correction in 2023, indicating a period of consolidation and recovery despite challenging macroeconomic conditions.
2024: A Year of Stability?
As of August 2024, both the global crypto market and Bitcoin have yet to experience a significant correction this year, though Ethereum has seen two instances of price correction, with a -10.1% drop on March 20 and a -10.0% drop on August 6.
Top Crypto Market Corrections (2014-2024)
Here are the top 20 biggest global crypto market corrections day-over-day from January 1, 2014, to August 6, 2024:
Rank | Crypto Market Correction | Date |
|---|---|---|
1 | -39.60% | March 13, 2020 |
2 | -22.28% | September 14, 2017 |
3 | -22.17% | May 20, 2021 |
4 | -19.01% | February 6, 2018 |
5 | -17.32% | April 10, 2014 |
6 | -16.85% | January 13, 2015 |
7 | -15.69% | December 22, 2017 |
8 | -15.36% | November 20, 2018 |
9 | -14.62% | November 25, 2018 |
10 | -14.23% | June 22, 2021 |
11 | -14.23% | February 25, 2014 |
12 | -14.16% | August 2, 2016 |
13 | -14.04% | January 15, 2016 |
14 | -13.96% | September 6, 2018 |
15 | -13.89% | March 9, 2018 |
16 | -13.51% | November 10, 2022 |
17 | -13.39% | January 22, 2021 |
18 | -13.37% | January 17, 2018 |
19 | -13.12% | August 22, 2017 |
20 | -12.86% | January 11, 2017 |
Methodology
This analysis examined daily percentage changes in total crypto market capitalization, Bitcoin, and Ethereum prices over the last ten years (January 1, 2014, to August 6, 2024) using CoinGecko data. Market and asset price corrections were defined as decreases of 10% or more, with a slight extension to -9.95% to account for rounding.
Conclusion: The crypto market has shown resilience despite its inherent volatility, with the most severe corrections occurring during periods of global uncertainty. As the market continues to evolve, understanding these historical corrections can provide valuable insights into its future behaviour.
