A down market is a problem for people with 401ks or etf only if they’re close to or in retirement. It’s not an issue for most people between 20 and 60.
Correction, it's an issue for people who need to cash out their stocks. If you lost your job during the pandemic you might need money more than you need well performing stocks so you are forced to sell at a loss.
It’s only a loss if you’ve been invested for a short time. The market is up a ridiculous amount. It would need to drop close to 40% to be back around 2014 levels. You could still sell shares from 2010 that would be sold at a profit, if you’ve been investing for a decade