Bitcoin Price Risks Falling Below $40k, Here’s Why

Key Insights:

• Analyst predicts a potential Bitcoin price crash that could drag it below $40k.
• BTC price recorded marginal gains today amid a broader market recovery.
• The US Spot Bitcoin ETF has recorded a massive outflow on July 1.

The crypto market has been highly volatile over the past few weeks, which has forced many investors to stay on the sidelines. Simultaneously, Bitcoin price has also been consolidating between the $100k and $108k in recent weeks, after touching a new ATH on May 22.

This has sparked discussions among traders about whether BTC is losing its appeal among traders. While many anticipate the ongoing consolidation as a healthy trading scenario before a breakout, others are speculating on the potential reason behind it.

Amid this, a renowned market expert has predicted a potential Bitcoin price crash below $40k, which has spooked the traders. The pundit has cited historical trends and said that if BTC follows its past cycle, it might witness a massive drop ahead.

Bitcoin Price Regains Momentum But Stays Near Flatline

BTC price today has regained momentum during writing and traded at $107,716, up 0.8% over the last 24 hours. The trading volume of the flagship crypto also soared 11% to $46.5 billion, indicating increasing trading activity in the market.

The 24-hour high and low of Bitcoin price were recorded at $107,689 and $105,157, respectively. Notably, the crypto has added around 1.2% in the weekly chart, with its value soaring more than 2% over the last 30 days.

Besides, the crypto’s RSI also stayed at 55, indicating a neutral condition of the asset. In other words, it indicates that the crypto is neither in a bearish phase nor a bullish phase for now.

Meanwhile, Bitcoin Futures Open Interest rose slightly around 0.5% from yesterday to $71.54 billion. However, CoinGlass data showed that the Open Interest on the CME Exchange has dropped by more than 6% from yesterday.

Analyst Hints at BTC Price Drop Below $40k

Market pundit Ali Martinez has warned that the Bitcoin price could be heading towards a sharp correction ahead. In a series of alarming X posts, the analyst hints at the possibility of a major BTC crash.

He has cited technical indicators that have accurately predicted Bitcoin’s previous crashes. For context, Martinez pointed to a technical pattern known as the Tom Demark (TD) Sequential, which just flashed a quarterly sell signal for Bitcoin.

In the past cycles, this signal preceded “brutal drawdowns” in Bitcoin. He noted that in 2015, when this signal appeared, the Bitcoin price had lost more than 75% of its value.

Simultaneously, in 2018, the same pattern also showed up, which resulted in a plunge of over 85% in the flagship crypto’s price. Having said that, he warned that the same signal has flashed again, hinting that the Bitcoin price could drop below $40,000 if it follows the previous cycles.

Besides, he also highlighted the declining buying interest for Bitcoin, which has further weighed on the market sentiment.

However, despite his warnings, other experts have remained bullish on the long-term trajectory of the coin.

Can Bitcoin Price hit a New ATH Soon?

Despite the stark warning from Ali Martinez, analysts like Michael van de Poppe have remained optimistic on the future performance of the BTC price. In a recent X post, Poppe deemed the recent small correction on Bitcoin price as a healthy pullback.

Meanwhile, he noted that as BTC regained its momentum, it could continue its upward run. Besides, he also predicted a likely ATH soon for the crypto, signaling his strong confidence in the asset.

However, despite that, the investors should exercise caution amid the waning risk-bet appetite of the institutions. For context, the US Spot Bitcoin ETF has recorded an outflow of $342.2 million on July 1, ending its 15-day inflow streak.

This outflow, along with Ali Martinez’s stark warning, appears to have weighed on the investors’ sentiment. Despite that, the recent recovery indicates that the retail traders are once again shifting their focus towards the flagship crypto.