This is why Bitcoin (BTC) could fall to $40K: CryptoQuant

Bitcoin fell more than 15% on Monday, briefly dipping below $50,000 amid a US recession and growing geopolitical tensions in the Middle East. This is the first time since February that BTC fell below this threshold before returning to around $52,000.

Experts suggest that the crypto asset may see many weaknesses.

More pain for Bitcoin?

According to CryptoQuant's latest analysis, Bitcoin is likely to drop to $40,000, signaling challenging times for investors. The crypto analytic platform highlighted that traders are currently experiencing their most negative profit margins since November 2022.

The decline reflects a significant shift in market sentiment, with selling pressure mounting as traders seek to cut losses amid an uncertain economic backdrop.

As observed by IntoTheBlock, due to the severe fall of Bitcoin, the percentage of holders of their profits dropped to 75%. This is a significant decline and the lowest level seen since January, when the price of Bitcoin established a local bottom around $39,000.

Bitcoin wasn't the only one affected by the heavy selling pressure. Ethereum has dropped more than 22% in the last 24 hours, bringing its price down to $2,264 at the time of writing.

At the same time, Solana and XRP fell by 18.2% and 16.6%, respectively, compared to the rest of the market. Meanwhile, Dogecoin is down more than 20%.

Liquidity of more than 1 billion dollars

The bleeding resulted in the loss of $1.08 billion worth of crypto-tracked futures in the past 24 hours. According to data compiled by CoinGlass, $919.62 million in long positions were liquidated, while short transactions totaled $162.45 million.

Bitcoin was hit hardest, seeing more than $371 million in liquidity, with longs at $310.26 million and shorts at $61.22 million. Ethereum released about $353 million in the same period. Including $303 million in longs and $49.6 million in shorts. Next were Solana and Dogecoin, which also experienced significant liquidity, with $60.91 million and $13.14 million respectively.

In the process, 283,280 traders were released in the last 24 hours. The largest single liquidation order was paid by Huobi in BTC-USD for USD 27 million.

The decline then led to the crypto fear and greed sentiment index indicating “fear”, reaching its lowest level since the beginning of July.