What is Drawdown?
The decline from a peak to a subsequent trough, usually expressed as a percentage.
Bitcoin has experienced several drawdowns exceeding 70% from all-time highs, each of which looked at the time like a permanent verdict.
Historical recovery is not a guarantee of future recovery. Drawdown history is useful for understanding what the asset does, not for concluding what it must do next.
Related terms
Volatility
The magnitude of price variation over time. Bitcoin's is high by the standards of every traditional asset…
MarketsRisk management
Deciding in advance how much can be lost, and structuring positions so that no single outcome is ruinous.
MarketsBear market
A sustained period of falling prices and weak sentiment. In Bitcoin these have historically lasted a year or…
This definition is part of the Bitcoin Logical glossary. For the fuller explanation, start with Learn, or see the live numbers on The Bitcoin Signal.