Crypto correction could be just the calm before the storm
At this point in the last cycle, bitcoin was well on its way to its first major peak
Shtange Pavel Vladimirovich/Shutterstock modified by Blockworks
This is a segment from the Empire newsletter. To read full editions, subscribe.
By this point in the previous bull market, bitcoin was well on its way to its first cycle top.
Those peaks are always obvious in retrospect. Bitcoin had exploded from $10,000 to more than $60,000 in six months. Looking back, the market was overdue for a correction, and bitcoin retraced by around 50% over the next eight weeks.
This leads us to the obvious question today: Is this sea of red the start of a similar correction?
Below plots bitcoin price action over the bull market to date in purple (starting at the bottom of the previous bear market in November 2022), compared to the bull market returns from the cycle that started in 2018.
Usually, I include a chart on a log scale that maps returns going back to 2015. This time around, the chart is on a linear scale and only compares this cycle to the previous one.
(You can find an interactive version of the chart here, where you can choose what you see by clicking on the swatches).
If the current retracement is in fact the early stages of a 50%-plus correction, then it would be starting around 40 days earlier than the last time. Which I suppose wouldn’t be out of the ordinary.
Perhaps, it might be better to just get the correction out of the way — if there’s indeed enough momentum on the other side of it to drive it back to new highs, like there was in mid-to-late 2021.
One problem. That only covers bitcoin. A 50% correction in BTC has historically dragged other coins down much further, which would be painful considering how dire the vibes are right now.
In searching for positives, there’s this: We are now entering the eighth week of 2025. The altcoin market — all coins that aren’t in the top 10 by market cap — has posted negative returns for all but two weeks.
That is an incredibly low strike rate of only 25% if we count the current week that started on Monday as a red candle.
At its worst over the past 10 years, the altcoin market has posted positive weekly returns 42% of the time, and that was in 2022 during the depths of the longest bear market on record.
So, if anything, as rough as the market is right now, it still looks like the calm before a storm of volatility in both directions. Hooray.
Get the news in your inbox. Explore Blockworks newsletters:
- Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
- Empire: Start your day with top crypto insights from David Canellis and Katherine Ross.
- Forward Guidance: Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin.
- 0xResearch: Get alpha directly in your inbox — market highlights, charts, degen trade ideas, governance updates, and more.
- Lightspeed: All things Solana, in your inbox, every day from Jack Kubinec and Jeff Albus.
- The Drop: The newsletter for crypto collectors and traders, covering games, tokens, apps, memes and more.
