Terryl Dickey
Aug 7, 2024 09:45
CoinGecko reports that the COVID-19 crash was far worse than the 2024 sell-off, making it the worst downturn in global cryptocurrency market history.
According to recent research by CoinGecko, the Covid-19 crash on March 13, 2020 remains the most severe global cryptocurrency market correction in the past decade. The market saw a dramatic -39.6% drop, with the total cryptocurrency market capitalization plummeting from $223.74 billion to $135.14 billion in a single day.
Comparing Crypto Corrections in 2020 and 2024
In stark contrast, the largest cryptocurrency market selloff in 2024 was much milder, with a -8.4% drop on March 20. While the market has fallen from $2.44 trillion to $1.99 trillion in the past four days between August 2 and August 6, 2024, none of these declines were large enough to be classified as a market correction.
Since the FTX crash in November 2022, the cryptocurrency markets have not experienced a single day of correction, indicating a period of relative stability.
Pay attention to Bitcoin and Ethereum
Bitcoin (BTC) also saw the largest price correction on March 13, 2020, dropping -35.2%. Ethereum (ETH) saw an even bigger drop of -43.1% on the same day as investors fled risk assets amid global uncertainty. The second largest cryptocurrency correction occurred on September 14, 2017, when the market experienced a drop of -22.3%. Bitcoin’s price also fell -20.2% on the same day.
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Historically, the longest cryptocurrency corrections have lasted just two days in a row. Notable examples include January 16-17, 2018 and February 5-6, 2018. More recently, the market corrected for two days during the FTX crash in November 2022.
Bitcoin has experienced two consecutive correction dates during the Bitcoin Unlimited fork controversy in January 2015 and March 2017. Ethereum, on the other hand, has experienced six such correction dates, most notably the Dao hack in June 2016 and the FTX crash in 2022.
Frequency and impact of correction
Since 2014, there have been 62 market corrections, which is only 1.6% of the time. The average correction is -13.0%, which is slightly above the technical limit for market corrections. 2018 had the most corrections, with 18 days of significant declines, reflecting the volatile bearish conditions during that period.
It is noteworthy that there was no market correction at all in 2023, despite the difficult macroeconomic conditions, as the cryptocurrency market gradually recovered. Bitcoin and Ethereum also did not experience significant corrections last year. However, Ethereum already experienced two corrections in 2024, with a -10.1% drop on March 20 and a -10.0% drop on August 6.
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The study ranked the 20 largest global cryptocurrency market corrections from January 1, 2014 to August 6, 2024. The largest corrections included the -39.6% drop on March 13, 2020 and the -22.28% drop on September 14, 2017.
For Bitcoin, the biggest corrections include a -35.19% drop on March 13, 2020 and a -22.26% drop on January 14, 2015. For Ethereum, the biggest corrections were a -53.00% drop on August 8, 2015 and a -43.05% drop on March 13, 2020.
methodology
This study analyzed the daily percentage changes in total cryptocurrency market capitalization, Bitcoin price, and Ethereum price over the past 10 years based on data from CoinGecko. A correction was defined as a decrease of 10% or more, and the threshold was expanded to -9.95% to account for rounding.
For more information, you can check out the full research on CoinGecko.
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