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

The Covid-19 induced crash on March 13, 2020, remains the most severe global crypto market correction in the past decade, according to a recent study by CoinGecko. The market saw a dramatic -39.6% drop, with the total crypto market capitalization plunging from $223.74 billion to $135.14 billion in a single day.

Comparing 2020 and 2024 Crypto Corrections

In stark contrast, the largest crypto market sell-off in 2024 was significantly milder, registering only an -8.4% decline on March 20. Despite a recent four-day decline from $2.44 trillion to $1.99 trillion between August 2 and August 6, 2024, none of these reductions were substantial enough to be classified as market corrections.

Since the collapse of FTX in November 2022, the crypto market has not experienced a single day of correction, highlighting a period of relative stability.

Bitcoin and Ethereum in Focus

Bitcoin (BTC) also recorded its most significant price correction on March 13, 2020, with a -35.2% drop. Ethereum (ETH) saw an even steeper decline of -43.1% on the same day as investors fled risk-on assets amid global uncertainty. The second-largest crypto correction occurred on September 14, 2017, with the market experiencing a -22.3% pullback. Bitcoin's price also dropped by -20.2% on the same day.

Duration of Crypto Corrections

Historically, the longest crypto corrections have lasted for only two consecutive days. Notable examples include January 16th-17th, 2018, and February 5th-6th, 2018. More recently, the market saw a two-day correction during the FTX collapse in November 2022.

Bitcoin has experienced two instances of consecutive correction days, specifically in January 2015 and during the proposed Bitcoin Unlimited fork debate in March 2017. Ethereum, on the other hand, has had six such instances, with the most notable being the aftermath of The Dao hack in June 2016 and the 2022 FTX collapse.

Frequency and Impact of Corrections

Since 2014, there have been 62 days of market corrections, accounting for just 1.6% of the time. The average correction was -13.0%, slightly above the technical cutoff for a market correction. The year 2018 saw the highest number of corrections, with 18 days of significant declines, reflecting the volatile bearish conditions during that period.

Remarkably, 2023 did not see any days of market correction, as the crypto market gradually recovered despite challenging macroeconomic conditions. Bitcoin and Ethereum also did not experience any significant corrections last year. However, Ethereum has already seen two days of correction in 2024, with a -10.1% drop on March 20 and a -10.0% decline on August 6.

Top Crypto Corrections

The study ranks the top 20 biggest global crypto market corrections from January 1, 2014, to August 6, 2024. The most significant corrections include the -39.6% crash on March 13, 2020, and the -22.28% drop on September 14, 2017.

For Bitcoin, the top corrections include a -35.19% drop on March 13, 2020, and a -22.26% decline on January 14, 2015. Ethereum's most severe corrections were a -53.00% drop on August 8, 2015, and a -43.05% decline on March 13, 2020.

Methodology

The study analyzed daily percentage changes in total crypto market capitalization, Bitcoin price, and Ethereum price over the past decade, based on data from CoinGecko. Corrections were defined as decreases of 10% or more, with the cutoff extended to -9.95% to account for rounding.

For further details, the full study can be found on CoinGecko.