Bitcoin is undergoing a sharp correction, dropping nearly 30% from its record high set in October. However, according to historical data and market cycle analysis, this level of volatility is not unusual but is part of the familiar price structure in the world of cryptocurrencies.

Bitcoin—the world’s largest cryptocurrency—fell to around $80,000 at the end of last month, representing a correction of about 36% from its peak of $126,000. After rebounding to over $93,000, the decline from the peak is now about 26%. Despite the significant volatility, experts believe this is completely in line with Bitcoin’s historical performance.

According to data from CoinDesk Data, Bitcoin typically moves in “cycles” lasting about four years, revolving around the halving event, when mining rewards are cut in half. Although the timing and pace of these cycles may vary, the range of volatility has remained stable over time. In the current cycle, Bitcoin has experienced several sharp declines: 32.7% from March to August 2024 and 31.7% from January to April 2025.

Looking back at previous cycles, Bitcoin saw two declines of about 40% in 2017, followed by another nearly 30% drop right before hitting a new peak in December. In 2021, there was a 31% drop in January, 26% in February, and even over 55% between April and June due to China’s Bitcoin mining ban, all of which occurred before the cryptocurrency set a new high in November.

Bitcoin plunges from all-time high: Is the 30% drop really a cause for concern? - 1

What does this level of volatility mean for Bitcoin’s long-term trend?
According to analysts, deep corrections within a cycle often occur while the market maintains an overall upward trend. Except for the sharp drop in 2021 due to the mining ban in China, most declines have occurred within a bullish structure, remaining above important technical levels such as the 50-week moving average.

This shows that Bitcoin does not follow a straight upward trajectory; instead, the market moves in cycles, alternating between rallies and corrections. Declines of 25-40% are actually considered part of the “standard price behavior” in the crypto market, reflecting its fragmented nature and high sensitivity to news and investor sentiment.

From a long-term perspective, Bitcoin’s repeated return to new highs after previous corrections leads many analysts to believe that the current volatility is not necessarily a bad sign, but could be a setup for the next price rally.

Why has the market been so volatile recently?
One of the biggest reasons is the largest leverage liquidation event in crypto history. Since October 10, more than 1.6 million traders have been “wiped out,” losing a total of $19.37 billion in just 24 hours. When margin positions were simultaneously closed, widespread selling pressure caused prices to plummet across the board.

According to Lucy Gazmararian, founder of Token Bay Capital, the impact of this liquidation is still lingering and will take weeks for the market to stabilize. This situation arose just as many investors feared that the “bull run was coming to an end,” increasing the level of fear in the market.

In previous cycles, when the price bubble burst, Bitcoin often entered a “crypto winter” phase with drops of 70-80% from the peak. While this hasn’t happened in the current cycle, concerns about the potential for a deep decline are making investors cautious. The coincidence of strong volatility and the market’s position in the cycle is making many people more wary of the possibility of a major drop.