Analyst Clem Chambers, who closely follows cryptocurrency markets, evaluated the accelerated Bitcoin decline in recent days and detailed possible collapse scenarios.
While the current downturn is not yet at the level of a “true Bitcoin crash,” the risks are growing, according to Chambers.
Bitcoin briefly dipped below $90,000 today, falling about 28% from its recent peak of $126,000. Chambers noted that even this would be considered a “crash” in the equity markets, while a true Bitcoin crash is typically defined by a drop of more than 50%. This theoretically points to a price drop of $60,000 or less.
The most severe scenario, according to the analyst, is for Bitcoin to fall to $40,000. Chambers said such a drop could trigger the kind of chain reaction seen during the FTX era and plunge the market into extremely dire straits.
Chambers stated that if Bitcoin enters the typical “collapse” phase of its cycles, the price could fall to the $45,000-$60,000 range. He argued that this scenario is consistent with past cycles, and that the 2018 chart, when scaled back to the present day, presents a similar roadmap.
According to the analyst, the positive scenario hinges entirely on liquidity. Chambers suggests that the decline could be due to the recent liquidity crunch and the effects of the government shutdown. If the Fed steps in and injects liquidity into the system, Bitcoin could be prevented from falling to the $40,000-$45,000 region. He assessed the probability of this as “50-50.”
He also noted that while massive debt in the AI sector has been depressing the market, any liquidity entering the system eventually finds its way into Bitcoin. He added that a geopolitical disaster could also push Bitcoin higher, but that doesn’t seem likely at the moment.
Chambers, recalling the breakout from $100,000 a year ago, stated that the expected decline has finally arrived. He added that if Bitcoin breaks into the $85,000 range, he would be “pretty sure the cycle is over” and that crypto winter would officially begin.
Finally, the analyst stated that the chart of the 2018 cycle adapted to today is a road map for him, not a destiny but a guide that he will follow carefully.
*This is not investment advice.