The first night I bought BTC in 2018 to pay for my mining ASIC was the night I discovered just how unpredictable Bitcoin’s price can be—and how it can affect your sleep. I remember waking up at 3 a.m. to use the bathroom, only to find myself glued to the screen, watching the crypto market. That night, BTC’s price had dropped 6% since I went to bed. I’m pretty sure most of my readers have experienced something similar at least once!

That was the moment I started thinking deeply about price drops—what caused them, what might happen next, and when those big moves might occur. Let’s call this phenomenon a “Price Drip.”

What is a “Price Drip”?

Before diving into the analysis, let’s define what I mean by “drip.” I spent quite some time considering this, and here’s my working definition:

A Price Drip is when the price drops quickly by more than 5% within a 12-hour window.

Using this definition, I analyzed drips from the closing price to the lowest price in the following 12 hours, using a 1-hour timeframe for the analysis.

How Often Do Drips Occur?

From my dataset (mid-2017 to mid-2025), there were 710 drip events—an average of 88.75 per year! In other words, on average, there’s more than one drip every week.

Looking at the distribution of drip sizes, it’s clear they don’t follow a normal distribution. Some tails even stretch as far as -34.15% in just 12 hours—that’s massive!

However, if you look at the Drip Frequency by Year and Size Group chart, you’ll notice that drip sizes have been decreasing every year. Perhaps this is a sign that Bitcoin’s price has become more stable over time.

What Happens After a Drip?

You’ve probably heard the phrase: “Buy the dip!” But does it really work?

After analyzing my dataset, I found that following a drip, prices typically rebound by 3.41% to 4.42% within the next 12 to 72 hours. That makes the phrase “Buy the drip!” even more compelling.

The Truth Behind Panic Selling

When prices drop sharply, panic selling often sweeps the market. But remember: while some are selling, others see opportunity. After hitting the bottom, the chance of a price recovery within the next 2 to 72 hours is 69.86% to 90.42%! With this knowledge, how would you handle the next drip?

Can We Predict a Drip Before It Happens?

Many traders rely on RSI (Relative Strength Index), especially RSI-14, to find entry and exit points. But here’s what I found: most drips begin when the RSI is around 50 on the 1-hour timeframe (and it’s similar on the 4-hour and 5-minute timeframes). This means RSI doesn’t consistently predict when a collapse will happen.

Good News: We Know When It Stops!

If RSI can’t predict the start, can it help us find the bottom? Actually, yes! At the bottom of most drips, RSI typically falls to around 30—a classic oversold zone. That’s often the point where the downward momentum starts to fade.

Going Deeper: The 5-Minute Timeframe

Zooming in on a 5-minute chart reveals that drips often stop when RSI hits 25. Many of you might find this a helpful spot to consider for potential entries.

How Monthly Trends Affect Drips

As I mentioned in a previous article (click here), Bitcoin has distinct seasonal price patterns that affect drip frequency. So don’t be surprised if your favorite coin experiences more drops in certain months.

A Word of Caution

Finally, remember: past patterns don’t guarantee future results. Drips may not repeat in the same way. Use this information wisely, and remember—this is not financial advice!

You can view full analysis with code on github by click here.