Crypto’s Covid Crash Still 5X Worse Than 2024 Sell Offs

What Are the Biggest Crypto Market Corrections?

In the last ten years, the worst global crypto market correction has been the -39.6% Covid-19 crash on March 13, 2020. The widespread sell off saw total crypto market capitalization plunge from $223.74 billion to $135.14 billion day over day (DoD). 

In comparison, the largest crypto market sell off to date this year was significantly less severe at only -8.4%, which took place on March 20, 2024. Similarly, while the most recent drawdown saw 4 consecutive days of decline that shrank total crypto market capitalization from $2.44 trillion on August 2 to $1.99 trillion on August 6, none of the decreases have been large enough to qualify as a market correction.

In fact, crypto has not recorded a single day of market correction since the FTX collapse in November 2022. 

Bitcoin also recorded its biggest price correction of -35.2% DoD on March 13, 2020, while Ethereum saw its second biggest price correction at -43.1% DoD the same day, as crypto investors fled risk-on assets overnight amid global uncertainty.

The second biggest crypto correction took place on September 14, 2017 as the total crypto market capitalization experienced a -22.3% pullback DoD, from $136.55 billion to $106.14 billion. This was in line with Bitcoin’s third largest price correction of -20.2% on the same day. The corrections came on the back of a relatively strong performance throughout the year, and both the crypto market and Bitcoin promptly recovered the next day, which highlights the high volatility of crypto.

How Long Does a Crypto Correction Last?

Over the past ten years, the longest crypto corrections have lasted at most for just 2 consecutive days. From 2014 to date, the global crypto market has experienced 3 instances of such consecutive corrections. These occurred in early 2018 as the crypto market cooled off after reaching new highs, as well as in late 2022 due to the FTX collapse and contagion:

1. January 16th (-11.8%) to 17th (-13.4%), 2018

2. February 5th (-10.3) to 6th (-19.0%), 2018

3. November 9th (-10.1%) to 10th (-13.5%), 2022

That said, there have been instances of crypto market corrections that happened one after another, but not consecutively. For example, during the Terra Luna collapse in 2022, the total crypto market capitalization fell by 12.0% DoD on May 10, briefly stabilized the next day, only to follow with a 11.0% DoD decrease on May 12.

Meanwhile, Bitcoin recorded only 2 instances of consecutive days of crypto corrections. The first was at the start of 2015 amid regulatory concerns and unfavorable developments including the Bitstamp centralized crypto exchange hack. Bitcoin’s next 2-day long price correction took place during the proposed Bitcoin Unlimited fork debate. 

Notably, both of Bitcoin’s longest price corrections were related to issues specific to the asset, rather than in conjunction with broader crypto developments:

1. January 13th (-17.5%) to 14th (-22.3%), 2015

2. March 17th (-11.8%) to 18th (-10.4%), 2017

On the other hand, Ethereum has experienced 6 occasions of consecutive price correction days so far. While Ethereum’s first two longest price corrections happened during the asset’s early days, the third instance in June 2016 was a result of The Dao hack. Ethereum’s subsequent 2-day long price corrections were in line with the global crypto sell offs, during the 2018 bear market and the 2022 FTX collapse.

1. October 30th (-10.5%) to 31st (-12.9%), 2015

2. February 16th (-17.9%) to 17th (-14.3%), 2016

3. June 17th (-24.9%) to 18th (-27.3%), 2016

4. February 5th (-11.4%) to 6th (-18.0%), 2018

5. November 20th (-15.4%) to 21st (-12.6%), 2018

6. November 9th (-15.0%) to 10th (-17.9%), 2022

How Many Days of Crypto Correction Are There?

Crypto has experienced 62 days of market correction from 2014 to date, which makes up a minor 1.6% of the time during this period. The average crypto market correction across these days was -13.0%, which is just 3 percentage points above the technical cutoff definition for a market correction.

Crypto was hit by the highest number of 18 market corrections in 2018, which is double the next highest 9 days of market correction recorded in 2017. The frequency of crypto market corrections in 2018 was likely due to the volatile bearish conditions then, as crypto cooled off from a bull run that gained the asset class greater mainstream recognition.

Notably, crypto saw 0 days of correction in 2023, as the market consolidated and made a gradual recovery despite a challenging macroeconomic environment. Bitcoin and Ethereum similarly did not experience any days of price correction last year.

While both the global crypto market and Bitcoin have yet to experience any days of correction so far this year, it remains to be seen if that will be the case for the rest of 2024. On the other hand, Ethereum has already seen 2 days of price correction this year, namely -10.1% on March 20 and -10.0% on August 6, 2024.

Top Crypto Corrections

The top 20 biggest global crypto market corrections day over day from January 1, 2014 to August 6, 2024 are ranked as follows:

Ranking the top 20 biggest Bitcoin price corrections day over day during the same period:

Ranking the top 20 biggest Ethereum price corrections day over day in this period as below:

Methodology

The study examined daily percentage change in total crypto market capitalization, Bitcoin price and Ethereum price over the last ten years from January 1, 2014 to August 6, 2024, based on CoinGecko data. Note that Ethereum only has data from August 7, 2015 onwards. All market capitalization and price data were captured at 00:00 UTC for each day.

Market and asset price corrections were defined as decreases of 10% or more, with reference to Investopedia, and taken on a day over day basis (DoD). For this study, the cutoff was extended to -9.95% as percentages are also rounded up to 1 decimal place for certain scenarios, which would result in such figures being taken as -10.0%.

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