What is maximum drawdown?
Maximum drawdown is the largest fall from a peak to a later low within a period, given as a percentage. A coin that rose to $100, fell to $40 and then recovered had a 60% maximum drawdown. It shows the worst loss someone who bought at the top would have had to sit through.
From the Staxo crypto glossary. The examples use Kraken daily candles (UTC), Oct 10, 2025 to Oct 10, 2026, for the eight coins on Staxo's free plan that are not stablecoins.
How to calculate max drawdown
Follow the price day by day and keep track of the highest close so far, the running peak. On each day, the drawdown is how far the close sits below that peak: (close − peak) ÷ peak. The maximum drawdown is the lowest of those values over the period, the deepest hole the price dug before it set a new high.
For Bitcoin from Oct 10, 2025 to Oct 10, 2026, the running peak that mattered was $115,166 on Oct 13, 2025. The price then fell to $58,532 on Jun 30, 2026, 260 days later: ($58,532 − $115,166) ÷ $115,166 = -49.2%. By Oct 10, 2026 it had not closed above that peak again.
Max drawdown of the top coins in the last 12 months
| Coin | Max drawdown | Peak | Low | Days of falling | Needed to recover |
|---|---|---|---|---|---|
| Cardano | -80.3% | $0.7295, Oct 13, 2025 | $0.1435, Jun 25, 2026 | 255 | +408% |
| Solana | -70.2% | $208.75, Oct 13, 2025 | $62.16, Jun 6, 2026 | 236 | +236% |
| Dogecoin | -67.7% | $0.2140, Oct 13, 2025 | $0.06901, Aug 6, 2026 | 297 | +210% |
| Ethereum | -63.1% | $4,244, Oct 13, 2025 | $1,565, Jun 25, 2026 | 255 | +171% |
| XRP | -62.5% | $2.65, Oct 26, 2025 | $0.9925, Aug 16, 2026 | 294 | +167% |
| BNB | -58.1% | $1,303, Oct 12, 2025 | $545.61, Jun 30, 2026 | 261 | +139% |
| Bitcoin | -49.2% | $115,166, Oct 13, 2025 | $58,532, Jun 30, 2026 | 260 | +97% |
| TRON | -16.7% | $0.3231, Oct 12, 2025 | $0.2690, Feb 5, 2026 | 116 | +20% |
Cardano fell the furthest, 80.3% from $0.7295 to $0.1435. TRON had the shallowest drawdown at 16.7%. TRON closed above its old peak again before Oct 10, 2026; the others had not.
Why a drawdown is harder to win back than it looks
Losses and gains are not symmetric. After a fall of 50%, the price has to double, a gain of 100%, just to get back to where it was. The deeper the hole, the faster the climb out grows: a 80% drawdown like Cardano's needs a rise of about 408%. That is the last column in the table above, (drawdown ÷ (1 − drawdown)).
This is why many traders set a limit on how deep they let their own account fall, and cut position sizes before they reach it, rather than after.
Max drawdown and volatility are not the same thing
Volatility counts the size of all daily moves, up and down. Drawdown only looks at the worst run of losses. Two coins can swing about as much and still fall by very different amounts: BNB's volatility was 48.3% against Bitcoin's 44.3%, but its maximum drawdown was 58.1% against 49.2%. A slow, steady decline can produce a deep drawdown with little day-to-day noise, so read the two numbers together.
How to practice it in Staxo
Drawdown is a number you can only learn to live with by sitting through one. In Staxo, start with the $500 in demo money, open a position in one of the free-plan coins and note the deepest loss it reaches in your Portfolio before you close it. Do it for a few trades and you will know your real pain threshold, without paying for it.
Then set a rule, for example "I close any position that falls 15% below its entry", and follow it for a month. With Staxo Pro and leverage the rule stops being optional: at 5x, a 20% drawdown from your entry is the liquidation price.
Free on iPhone and Android, $500 in demo money. Also on Google Play.Also on the App Store.
Maximum drawdown questions
What is a good max drawdown?
There is no single good number: it depends on the asset and the period. For the eight coins on Staxo's free plan from Oct 10, 2025 to Oct 10, 2026, the shallowest maximum drawdown was TRON's at 16.7%, Bitcoin's was 49.2% and the deepest 80.3%. What matters is that you could hold through it.
Is a drawdown the same as a loss?
Not until you sell. A drawdown is the fall from a peak while the position is still open, an unrealized loss. It becomes a realized loss only when you close the position below what you paid. Someone who bought below the peak may still be in profit during a drawdown.
Try it with $500 in demo money.
Free download, no card. Also on Google Play.Also on the App Store.
Educational content, not investment advice. The examples describe prices from Oct 10, 2025 to Oct 10, 2026 and say nothing about where they go next. Staxo is a simulator: you practice with demo money, never real money.