Since the bear market in 2022, bitcoin (BTC) has experienced significant price drops, with some reaching up to 23% of its value lost. Knowing the extent of these declines can help investors maximize their profits, as recoveries from these drops often result in substantial gains.

A tweet from crypto trader and analyst Rekt Capital suggests that buying BTC after a drop of about 20% could be profitable as the cryptocurrency continues its upward trend.

Bitcoin's Price Drops During This Period

In 2022, BTC faced challenges as it was affected by the bear market. Issues such as the collapse of the TerraLuna ecosystem and the crash of FTX led to a decrease in the value of BTC to $16,600, a low not seen since November 2020.

Following the bear market, BTC experienced a 23% drop in February 2023. In April and May of the same year, the leading cryptocurrency saw another 21% decline.

In July and September 2023, BTC also saw a 22% decrease, marking a significant drop before the end of the year. BTC continued to rise throughout 2023 until mid-January 2024 due to excitement surrounding the approval of spot Bitcoin ETFs in the United States.

Potential Future Price Drop for BTC

In 2024, BTC faced a 21% decrease in January following the approval of spot Bitcoin ETFs, which was anticipated as a sell-the-news event.

After a notable rally fueled by inflows into the ETFs, BTC saw another 18% drop in March. This downtrend caused bitcoin to fall from its all-time high of $73,700 to $61,900. BTC has struggled to surpass $71,000 since then and recently experienced an 18% drop this month.

Rekt Capital believes that buying BTC after a 20% drop could be beneficial. The cryptocurrency is currently consolidating between $60,000 and $70,000, suggesting that another 18% drop may occur if it tests the $70,000 resistance level and gets rejected.

The analyst emphasized that previous cycles have shown that buying after a 20% drop has led to solid returns later on, making it an opportunity worth considering for investors.