According to Blockworks, the cryptocurrency market has a history of significant price corrections following all-time highs. This pattern is evident across various tokens and cycles, with notable downturns occurring in 2018, 2021, and 2024. The data shows that many top cryptocurrencies experience substantial value drops, often by 80% or more, after reaching their peak prices. This trend is not limited to obscure tokens but also includes well-known cryptocurrencies like Bitcoin and Ether. Bitcoin has seen such corrections three times since 2017, while Ether has experienced it twice, albeit more quickly.
More than a dozen cryptocurrencies that set price records in the current cycle have already faced 80% drawdowns, including AEVO, STRK, WLDWLDWLD, W, ENA, DYM, and DYDX. Approximately three-quarters of the analyzed tokens have lost over 60% of their value. The challenge for these cryptocurrencies is to recover from these significant corrections. Historically, many tokens have struggled to return to their all-time highs, including prominent ones like Ether and Solana. The volatility of the crypto market is a key factor in these trends, with some tokens managing to bounce back while others do not.
Bitcoin typically bottoms out between 350 and 400 days after peaking, while Ether has done so in just over 200 days at the shortest and under 350 days at the longest. Currently, it has been around 200 days since Bitcoin's last peak, raising questions about whether this marks the top of the current cycle. The ongoing volatility and the ability of cryptocurrencies to recover from these corrections remain central to the market's dynamics.
