Drawdown (decline from the peak)
The decline of a price from its last peak to the following low, as a percentage. Bitcoin has fallen by more than 75% several times; from October 2025 to June 2026, it fell by around 53% (in US dollars).
Alsomaximum drawdownmax drawdownprice crashpeak-to-trough decline
A drawdown measures how far a price has fallen below its previous peak: (low − peak) ÷ peak. The maximum drawdown is the largest such decline within a period. It shows how much of the peak value was left at the worst moment.
Examples in Bitcoin
- 2021/2022: from around $67,600 on 8 November 2021 to around $15,800 on 21 November 2022 (daily closing prices), shortly after the collapse of the FTXGlossaryFTXA large crypto exchange that collapsed in November 2022. Around $8 billion in customer funds was missing, and founder Sam Bankman-Fried was sentenced to 25 years in prison. Customers got dollars back instead of their bitcoin.On the learning path: Stage 5 · Step 1 – Understanding custody →In the glossary → exchange – a fall of around 77%.[1]
- 2025/2026: from around $124,700 on 6 October 2025 to around $58,500 at the end of June 2026 (daily closing prices) – a fall of about 53%.[1]
The price also fell by more than 75% in 2014/2015 and 2018.[1] One bitcoin currently costs $85,533; the live charts show how far that is below the last peak.
Why losses weigh more
Getting back to the old peak takes a bigger rise than the fall was:
| Decline | Rise needed to reach the old peak |
|---|---|
| −20% | +25% |
| −50% | +100% |
| −75% | +300% |
What this means for you
If you have to sell during a crash because you need the money, you make the loss permanent. That’s why only money you can do without for a long time belongs in bitcoin. More in Psychology & discipline.
Related terms
These terms are closely connected.
- This termDrawdown(decline from the peak)
- VolatilityA measure of how strongly a price fluctuates, usually given as annualised standard deviation in per cent. Bitcoin fluctuates much more than a broad stock index or gold – up and down.
- All-time high (ATH)The highest price bitcoin has ever reached. As of September 2026, it dates from 6 October 2025: $124,728 (daily close).
- Four-year cycle (halving cycle)An observed pattern in which the bitcoin price has risen sharply roughly in step with the halvings and then fallen steeply. It is based on only four runs and is not a reliable buy or sell signal.
- HODLCommunity slang for holding bitcoin for the long term, even when the price falls sharply. It began in 2013 with a typo (‘hodling’ instead of ‘holding’) in a forum post.
- RebalancingBringing your asset allocation back to its planned shares. If the bitcoin share has risen sharply, you sell some; if it has fallen, you top up. This keeps your risk within the limits you set yourself.
Explained in depth
These articles go into more detail:
- Stage 3 · Step 3Returns & riskWhat Bitcoin has returned since 2014, how deep the crashes were and how much it fluctuates compared with shares and gold – in US dollars, with sources and limits.
- Deep dive · Stage 6Psychology & disciplineFOMO, panic, loss aversion and confirmation bias: why emotions get expensive with Bitcoin, and how an information diet, if-then rules and an investment journal help.
- Deep dive · Stage 6Holding long termWhat holding Bitcoin for years has meant historically, why the four-year cycle and stock-to-flow are no roadmap, and how to set rules before the next crash.
More from „Money & economics“
Sources1 sources · 1 publishers
The superscript numbers in the text refer to these sources.
- Historical Bitcoin prices (API) – mempool.space (accessed 28/09/2026)
This entry is for education only and is not investment, tax or legal advice.