Contextualized Analysis of Bitcoin Drawdowns

Summary. In this research insight, we contextualize bitcoin’s drawdowns, provide an analysis of bitcoin’s historical drawdowns with forward returns, and discuss implications for timing market cycles. We find that:

  • 68% of all days are spent in global maxima drawdowns ranging between -40% and -85%
  • Bitcoin makes new highs on 5.5% of days; drawdowns <5% tend to revert and make new all-time highs, suggesting persistence of market trend after a new peak is reached
  • Drawdowns spend 40–50% of their time…