While Bitcoin (BTC), the flagship of the cryptocurrency markets, is trading nearly 50% below its all-time high, the question on investors’ minds is on the agenda again: How long will this recovery last? Market analyst Sam Daodu argues that past cycles shed light on the current picture. According to him, Bitcoin’s sharp corrections are not new and history holds important clues for patient investors.
Systemic Collapse or Is Recovery Faster?
Bitcoin has experienced more than 20 sharp pullbacks exceeding 40% since 2011. Declines in the 35–50% range, seen as mid-cycle corrections, often cooled overheated rallies, stabilizing the process without permanently disrupting the long-term uptrend. According to Daodu, if there is no large-scale systemic collapse, Bitcoin can usually regain its previous peak in about 14 months.
Today’s environment looks calmer compared to the situation in 2022. At that time, the tight monetary policy of the US Federal Reserve, the collapse of the Terra (Luna) ecosystem and the FTX bankruptcy created a domino effect in the market. There is currently no chain bankruptcy wave on a similar scale. The analyst states that the realized price of Bitcoin around $ 55,000 can create both a psychological and technical base. Long-term investors’ tendency to accumulate at these levels may limit selling pressure.
On the other hand, global liquidity conditions continue to be decisive. As a matter of fact, the recent acceleration of inflows into spot Bitcoin ETFs indicates that institutional demand is still alive. The news that major fund providers, especially in the USA, increased their Bitcoin holdings created an optimistic, albeit cautious, atmosphere in the market.
Lessons from Past Bear Markets
In the 2021–2022 cycle, Bitcoin lost 77% of its value, falling to $ 15,500 within a year after reaching $ 69,000 in November 2021. After this sharp decline, it took exactly 28 months to exceed the old peak, and this only happened in March 2024. At the bottom, approximately 60% of the circulating supply was held by long-term investors; This contributed to base formation by absorbing forced sales.
The picture was different in the pandemic shock of 2020. After falling 58% in March, Bitcoin regained the $10,000 level within six weeks and surpassed its 2017 peak approximately nine months later. Abundance of liquidity and expansionary monetary policy accelerated the recovery.
In the 2018 bear market, the situation was more severe. Bitcoin, which fell from $ 20,000 to $ 3,200, waited nearly three years to return to its previous peak after a 84% decline. The collapse of the ICO bubble and regulatory pressures had drained speculative energy from the market.
Today’s 50% pullback is historically considered to be in the “moderate-severe” category. The recovery time for such corrections generally varies between 9 and 14 months. As Bitcoin’s effort to overcome the $70,000 resistance continues, macroeconomic conditions and investor confidence will determine the pace of recovery.
As a result, it is necessary to look at the data instead of panic. Bitcoin’s history shows that sharp declines do not always mean permanent collapse. However, each cycle has its own dynamics; Therefore, disciplined risk management and patience remain the two most valuable tools in this market.
