If you define financial independence, as many of us do, by a strict multiple of your annual spending, a decrease in the value of your holdings can bring your sum total under 25x or whatever magic number you prefer.
A 20% drop in your portfolio turns 25x into 20x. A 30% drop will take your 30x and leave you with 21x. Not many people would define having 20 or 21 years’ worth of spending as a position of financial independence.
If you approach FI intelligently, your Number is a multiple of your annual expenses in a year of living your ideal life. If you want to truly make work optional, you should base your goal not on a barebones lifestyle, but the amount you’d like to spend in a “normal” year.
A 4% withdrawal rate could have worked OK if a) you’re OK with a 30-year timeframe, b) are OK with an ending value of 0, and c) are willing to have / anticipating lower expenses later in that 30-year retirement.
If we are fixated on a finite number to establish ourselves as financially independent, then clearly, a market downturn can take that number away.