Crypto drawdown calculator for peak-to-trough risk
A drawdown measures how far a price has fallen from its highest point. The climb back needs a larger move than the fall. Enter a peak and a trough and this page shows the exact recovery gain the price has to print.
The table below covers drawdowns from 10% to 90%. A 90% fall needs a 900% gain to recover, which is the clearest way to see how quickly the arithmetic turns hostile.
Your inputs
Inputs and results stay in this browser. Values are capped to keep calculations finite and responsive.
Calculated result
- Drawdown from peak
- 50%
- Gain needed to recover
- 100%
- Recovery multiple
- 2
- Price for full recovery
- $100,000.00
- Gain per unit from trough
- $50,000.00
- Value after the fall
- 50%
A fall of $50,000.00 per unit
Measured from the trough, not from the peak
The peak is 2x the trough value
Peak plus the 0% recovery target
Dollar move required to reach the recovery price
Share of the peak price still standing at the trough
A position bought at the peak
Every dollar bought at $100,000.00 is worth $0.49875 at the trough of $50,000.00 after a 0.25% round trip fee. The position is whole again at $100,250.63.
Against $1.00 put in at the peak
Unrealised until the position is sold
The peak price grossed up for the round trip fee
Recovery gain required at every drawdown
| Drawdown | Value still standing | Gain to recover | Recovery multiple |
|---|---|---|---|
| -10% | 90% | 11.1% | 1.11x |
| -20% | 80% | 25% | 1.25x |
| -30% | 70% | 42.9% | 1.43x |
| -40% | 60% | 66.7% | 1.67x |
| -50% | 50% | 100% | 2x |
| -60% | 40% | 150% | 2.5x |
| -70% | 30% | 233.3% | 3.33x |
| -80% | 20% | 400% | 5x |
| -90% | 10% | 900% | 10x |
The two numbers for a 50% drawdown are 50% down and 100% up. Recovery gains grow faster than drawdowns because each extra point of loss is taken from a smaller base.
A peak at 100000 and a low at 50000
Say a coin peaked at $100,000 and printed a low of $50,000. That is a drawdown of 50%, a fall of $50,000 per unit. Getting back to $100,000 takes a gain of 100% on the $50,000 low, which is 2.00x the trough value. A 50% fall from 100000 to 50000 needs a 100% gain, so a fall of roughly half demands a little more than a double.
How to read a drawdown number
A drawdown is a percentage fall from a prior high to a later low. If a coin trades at 70000 dollars after peaking at 100000 dollars, the drawdown is 30%. The peak is the reference point and it never moves once you pick it.
The number is easy to state and hard to feel. A 30% drawdown sounds mild next to a 30% recovery gain, but the two are measured from different places. One is taken off the top of the position and the other is measured up from the smaller remainder.
This page keeps both numbers side by side so the gap between them stays visible. Change the peak or the trough and the recovery requirement updates straight away.
The arithmetic behind a recovery
Recovery gain is the move needed to climb from the trough back to the peak. The formula is 1 divided by one minus the drawdown, then minus one. Written as a percentage on a 50% drawdown it reads 1 divided by 0.5 minus 1, which is 1, or 100%.
Because the divisor shrinks as the drawdown deepens, the recovery number grows faster than the drawdown itself. A 40% fall needs a 67% gain, a 60% fall needs 150%, and an 80% fall needs 400%.
The asymmetry is a property of percentages, not of any particular coin. The same table applies to an equity index, a commodity, or a currency pair.
Drawdowns are normal, full recovery is not
Large drawdowns are a regular feature of volatile markets. A 20% fall from a high is a common marker people use for a bear market, and 50% or deeper falls have happened more than once in crypto's short history.
What is not guaranteed is the climb back. The recovery math assumes the price eventually returns to the old peak, and that assumption fails for individual coins that never trade at their former high again. An index of many assets recovers differently from a single token because the index can drop a member that goes to zero.
The practical use of this calculator is sizing rather than prediction. A holder who knows a 70% fall needs a 233% gain can decide in advance how much of a position they are willing to see fall that far.
Position sizing and the round trip
The panel above values a dollar bought at the peak once the price reaches the trough. A round trip fee is applied on the way in and the way out, which is why a position that is only slightly above water can still be a small loss after costs.
Fees are the quiet part of a deep drawdown. On a position that fell 50%, a 0.25% fee each way barely registers. On a position that fell 90%, the fee is a rounding error next to the loss, and the larger problem is that the breakeven price sits far above any realistic near term level.
Sizing smaller than a drawdown would hurt is the one lever a holder controls. The math here exists to make that number concrete rather than abstract.
Drawdowns in other markets
A broad stock index run from $4,790 down to $2,237 is a 53.3% drawdown. The recovery gain from that low is 114.1%.
A technology index run from $16,057 down to $4,527 is a 71.8% drawdown. The recovery gain from that low is 254.7%.
Both examples use round historical levels for illustration. The recovery requirement is the same shape in every market because it comes from the percentage arithmetic rather than the asset.
References
- Investopedia on drawdown for the definition of a peak to trough decline.
- Morningstar research on recovery math, the reason a 50% loss needs a 100% gain.
Related calculators
Research and risk disclosure
A model for thinking, not investment advice. Past prices do not guarantee future results. The math here assumes one constant holding period with no fees, no taxes, and no cash flows into or out of the position. A price can fall further after any trough and some markets never recover their old peak. A deep drawdown can get deeper, and a holder who needs the money before the recovery prints has a realised loss rather than a paper one.
Built and checked by Michael Lip