Here’s why Bitcoin analysts say the price of BTC will drop by $40k
Bitcoin (BTC) buyers pulled back on Monday and pushed BTC's price up to $67,860. Analysts say Bitcoin will remain in a bear market, with several indicators pointing to a possible dip below $50,000.
Main Receptors:
The price of Bitcoin turns $70,000 into resistance, clearing the way for a deep correction.
Bitcoin's short-term holder realized price bands have moved lower, with lows around $46,000.
Historical retracement levels and bearish flag dispersal to $39,000–$41,000 is the last low for BTC price in this cycle.
Bitcoin's “path of least resistance” is down.
Data from TradingView showed ongoing BTC price gains, up 1.5% on the day to trade at $67,750, with $69,000-$70,000 becoming new resistance.
Analyzing Bitcoin's price action on lower time frames, a technical crypto analyst at Telegram Trading Resource said that the loss of $68,000-$69,000 support “confirms short-term bearish momentum.”
“Unless the price quickly recovers to $69K to $70K, it will remain in the $65K interest zone with a path of least resistance.”
Related: Worst six months of 2018? Five things to know in Bitcoin this week
“It's very bullish, but nothing is confirmed yet in Bitcoin,” MN Capital founder Michael van de Pop said in an X newsletter on Monday.
He added, “It all depends on macroeconomic events; but I'd rather see a crash above $71k for confirmation.”
“On the other hand, a classic small sweep to $65k just before the push to the top shows that we're getting that momentum.”
Analyst Kyle Chase said the fear and greed index is still “in the high fear zone” and the order book shows more shorts than longs, meaning the market is “leaning towards more downside”.
Where will the price of Bitcoin fall?
Bitcoin's 46% drop from an all-time high of $126,000 saw the cost basis for short-term holders (STH) – the average price of entities holding BTC for less than 155 days – fall from $113,500 to $83,200.
“This is a sign that the potential low is also a low price,” Alfractal CEO and founder Joao Wedson said in an X post on Monday.
Similarly, the lower line of STH's perceived price bands (blue line) has also moved “even lower, which could confirm that Bitcoin could form a bottom at or below $50K,” Wedson added.
The chart below shows that Bitcoin is below the STH low during the 2022 bear market.
Analyst Willy Wu said the bottom of the bear market for Bitcoin could be between the current price of $54,000 and the Cumulative Value-Days Destroyed (CVDD), now at $45,500.
“Old school onchain models suggest a BTC bottom between $46K-54K.”
The CVDD measures the cumulative value of “coin days destroyed” (long-term holders sell) relative to the age of the market, creating a “floor” price increase during bear markets.
According to crypto analyst Crypto Jelle, Bitcoin's bear market lows historically form between the 0.618 and 0.786 retracement levels of $57,600 and $39,000, respectively.
According to Cointelegraph, the current “end stages” of the bear market are producing predictions as low as $41,000 based on the fall of the bear flag.
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