Fear has crept back into the crypto market. Bitcoin is hovering near $67,000—a jarring 45% drop from last October’s peak of $126,000. Investors who piled in at the top are now staring at battered portfolios and wrestling with a familiar urge: Sell everything before it goes to zero.
But zoom out, and the current carnage looks less like a death spiral and more like business as usual. For those with a long enough time horizon, the gravest mistake right now might be handing over shares at the point of maximum pain.
Bitcoin has never moved in a straight line. Crypto analyst Alex Thorn puts it bluntly: the asset is inherently cyclical, governed by a four-year boom-and-bust rhythm tied closely to its halving events.
The previous cycle offers a textbook example. Bitcoin topped out near $69,000 in November 2021. Then came the Fed’s hawkish pivot and the LUNA implosion. By late 2022, Bitcoin had cratered to $16,000—a gut-wrenching 77% drawdown. Headlines declared crypto dead. Retail investors capitulated.
And then the script flipped. Bitcoin rallied through 2023 and surged past $100,000 in 2024 on the back of spot ETF approvals. Those who sold at $16,000 missed the entire ride back up.
“If this decline feels suffocating,” says data analyst Mike McGlone, “you haven’t experienced a true crypto winter. A 45% drop is just a mid-sized correction by Bitcoin’s standards.”
If the current cycle echoes the last one—a 77% peak-to-trough decline—the numbers point to a sobering destination: roughly $29,000. In other words, even after a 45% haircut, Bitcoin may have further to fall.
Alex Thorn argues that’s exactly the point. “The short-term pain needs to be severe enough to flush out the leveraged speculators and weak hands,” he notes. “Only when despair peaks and volume dries up can Bitcoin clear the runway for its next historic run.”
Wall Street strategist Tom Lee has long maintained that extreme volatility is simply the price of admission. If a 70% drawdown is more than your psyche can handle, Bitcoin probably doesn’t belong in your portfolio at all.
So what should rattled investors actually do? Not double down with leverage. The better move, according to asset allocation specialist Lyn Alden, is to right-size the position so you can sleep at night.
Alden’s rule of thumb: even if you’re bullish, a 1% to 2% portfolio weighting is often far more sustainable than a 5% stake. Her reasoning is simple arithmetic. If Bitcoin crashes 77% and it’s 10% of your net worth, the damage is catastrophic—and the psychological pressure to sell at the bottom becomes overwhelming. But if it’s 1% of your portfolio, a wipeout changes nothing about your lifestyle. That detachment is precisely what allows you to hold through the chaos.
Is $67,000 a bargain or a trapdoor? No one can call the exact bottom with confidence. But the last two full cycles—the 2018 winter and the 2022 despair—share a common thread: each devastating crash laid the groundwork for the next all-time high.
The patterns don’t repeat perfectly, but they’ve never failed to show up. For investors who believe in the underlying technology, have a long-term horizon, and have sized their positions appropriately, this sell-off may ultimately look like a discount window.
Instead of panic-selling into the abyss, the wiser move might be to step away from the screen and trust the script history has written. When 2027 rolls around, today’s anxiety may look like nothing more than a shallow dip on the road to a new dawn.
