As Bitcoin (BTC) trades roughly 50% below its all‑time high, investors are once again asking the familiar question: how long does recovery usually take? Market analyst Sam Daodu believes history offers valuable clues.
No Systemic Bitcoin Collapse This Time?
Daodu notes that steep corrections are not unusual for Bitcoin. Since 2011, the cryptocurrency has endured more than 20 pullbacks exceeding 40%. Mid‑cycle declines in the 35% to 50% range have often cooled overheated rallies without permanently derailing long‑term uptrends.
In situations where there was no systemic breakdown in the broader market, Bitcoin has typically reclaimed prior highs in about 14 months. He contrasts the current environment with 2022, when multiple structural failures shook the crypto industry.
At present, there is no comparable collapse rippling through the system. The analyst highlighted that BTC’s realized price—currently near $55,000—may provide a psychological and technical floor, as long‑term holders have historically accumulated coins around that level.
Whether the present downturn evolves into a drawn‑out slump or a shorter reset, Daodu suggests, will largely hinge on global liquidity conditions and investor sentiment.
A Look Back At Historic Selloffs
During the 2021–2022 cycle, Bitcoin peaked at $69,000 in November 2021 before tumbling to $15,500 one year later, a 77% drop. The downturn coincided with monetary tightening by the US Federal Reserve, alongside the collapse of the Terra (Luna) ecosystem and FTX’s bankruptcy.
It ultimately took 28 months for Bitcoin to surpass its previous high, which it did in March 2024. At the market bottom, long‑term holders controlled roughly 60% of circulating supply, absorbing coins from forced sellers.
The 2020 COVID‑19 crash unfolded very differently. In March of that year, Bitcoin plunged about 58%, sliding from approximately $9,100 to $3,800 as global lockdowns triggered a liquidity shock.
Bitcoin rebounded quickly. It reclaimed the $10,000 level within six weeks and retook its 2017 high of $20,000 by December 2020, about nine months after the bottom. The eventual surge to $69,000 in November 2021 came roughly 21 months after the crash.
The 2018 bear market presents yet another contrast. After reaching $20,000 in December 2017, Bitcoin collapsed 84% to $3,200 by December 2018. The implosion of the initial coin offering (ICO) boom, combined with regulatory crackdowns and limited institutional participation, drained speculative energy from the market.
Active addresses declined by 70%, and miners were forced to capitulate as revenues shrank. Without significant new capital or a compelling growth narrative, Bitcoin required nearly three years to revisit its previous peak.
Not Capitulation Yet
The depth of the drawdown itself plays a critical role. Historically, corrections in the 40% to 50% range have taken roughly nine to 14 months to reverse, while collapses exceeding 80% have required three years or longer.
With Bitcoin now down about 50% from its peak, the decline falls into what Daodu describes as a moderate‑to‑severe category—substantial, but not indicative of full capitulation.
Based on prior episodes of similar magnitude, he estimates that a return to previous highs could take 12 months or more, with macroeconomic conditions ultimately determining the speed of that rebound.
As of writing, BTC was trading at $68,960, having recovered slightly on Friday with a 5% increase in an attempt to surpass its short-term resistance wall at $70,000.
Featured image from OpenArt, chart from TradingView.com