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

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The world of cryptocurrency continues to deliver dramatic swings, keeping investors on high alert. Recently, Bitcoin—the digital asset that sparked a global financial revolution—has been trading in a tight range between $100,000 and $108,000. While this consolidation follows its all-time high (ATH) reached on May 22, growing uncertainty looms. A prominent analyst has issued a stark warning: Bitcoin could plummet below $40,000. This prediction, rooted in historical patterns and technical indicators, has sent ripples through the market.

But is this fear justified? Or is it merely noise in a maturing asset class? Let’s break down the current market dynamics, expert insights, and key signals shaping Bitcoin’s near-term trajectory.

Bitcoin Shows Signs of Recovery Amid Uncertainty

As of the latest data, Bitcoin price sits at $107,716**, reflecting a **0.8% gain** over the past 24 hours. Trading volume has surged by **11% to $46.5 billion, signaling renewed activity among traders. The 24-hour trading range fluctuated between $105,157 and $107,689, suggesting controlled volatility.

On a broader timeline, Bitcoin has gained 1.2% weekly and over 2% in the last 30 days—modest but positive momentum. The Relative Strength Index (RSI) stands at 55, indicating a neutral market sentiment. This means the asset is neither overbought nor oversold, leaving room for either a breakout or a pullback.

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Open interest in Bitcoin futures has increased slightly by 0.5% to $71.54 billion, reflecting sustained trader engagement. However, data from CoinGlass reveals a divergence: CME Exchange open interest dropped over 6%, hinting at institutional caution. This split behavior—retail optimism versus institutional pullback—adds complexity to the current market narrative.

Why Some Experts Fear a Major Bitcoin Crash

Ali Martinez, a respected market analyst known for his data-driven insights, has raised alarms about an impending correction. In a series of posts on X (formerly Twitter), Martinez highlighted a technical pattern called the Tom Demark (TD) Sequential, which recently triggered a quarterly sell signal for Bitcoin.

Historically, this indicator has preceded severe downturns:

Martinez warns that the recurrence of this pattern suggests a similar fate could be in store. If history repeats, Bitcoin might fall below $40,000—a level not seen since early 2023.

Further supporting his bearish outlook is declining buying pressure. On-chain metrics show weakening demand, with fewer large investors accumulating BTC. This erosion of confidence could accelerate selling if macroeconomic conditions worsen or negative news triggers panic.

Bullish Voices Still Believe in New All-Time Highs

Despite the warnings, not all analysts are sounding the alarm. Michael van de Poppe, a well-known crypto strategist, maintains a bullish stance. He views the recent price dip as a healthy correction—a necessary pause before the next leg up.

Van de Poppe argues that Bitcoin’s recovery momentum remains intact. With strong support levels holding and long-term adoption trends accelerating—especially in institutional circles—he believes a new all-time high is likely in the near future.

This optimism is partly fueled by growing infrastructure development, increasing regulatory clarity in some regions, and rising interest in Bitcoin as a macro hedge against inflation and currency devaluation.

ETF Outflows Add Pressure to Market Sentiment

A key development adding to investor caution is the recent outflow from U.S. Spot Bitcoin ETFs. On July 1, these funds recorded a net outflow of $342.2 million, ending a 15-day streak of inflows. This reversal suggests that institutional investors may be taking profits or reallocating capital amid uncertainty.

ETF flows are a critical barometer of institutional sentiment. Sustained outflows could dampen upward momentum, especially if they continue over several days. However, short-term fluctuations don’t necessarily indicate a long-term trend reversal.

Retail investors, meanwhile, appear unfazed. Trading activity across decentralized exchanges and social sentiment metrics show increasing retail participation—a counterbalance to institutional hesitancy.

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Core Keywords Driving Market Discourse

The conversation around Bitcoin’s price action revolves around several key themes:

These terms reflect both technical and fundamental concerns shaping investor decisions today.

Frequently Asked Questions (FAQ)

Could Bitcoin really drop below $40,000?

While possible, such a drop would require a perfect storm of macroeconomic shocks, regulatory crackdowns, or widespread panic. Historical patterns suggest deep corrections post-ATH, but current fundamentals—like adoption and scarcity—are stronger than in 2015 or 2018.

What is the Tom Demark Sequential signal?

It’s a technical analysis tool developed by Tom DeMark that identifies potential trend exhaustion points. When it triggers a “sell” signal on a quarterly basis, it has historically preceded major downturns in Bitcoin.

Are ETF outflows a bad sign for Bitcoin?

Short-term outflows aren’t inherently negative—they may reflect profit-taking or portfolio rebalancing. However, prolonged outflows could signal weakening institutional confidence and should be monitored closely.

Is now a good time to buy Bitcoin?

This depends on your investment horizon. Long-term holders may view pullbacks as buying opportunities. Short-term traders should wait for clearer directional signals and stronger volume confirmation.

What factors could push Bitcoin to a new ATH?

Key catalysts include renewed ETF inflows, macroeconomic instability (driving demand for hard assets), halving supply shocks, and increased global adoption through payment integrations or national reserves.

How reliable are analyst predictions in crypto?

Analyst insights offer valuable perspectives, but crypto markets are highly unpredictable. Always combine expert opinions with your own research and risk management strategy.

Final Outlook: Caution Meets Opportunity

Bitcoin remains at a crossroads. On one hand, technical warnings and ETF outflows suggest caution. On the other, strong underlying demand, retail resilience, and long-term bullish narratives persist.

The market is digesting its recent highs, and volatility should be expected. Whether we’re heading for a deep correction or another breakout depends on how quickly confidence returns and whether institutions re-enter the market.

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For investors, the key is staying informed without reacting emotionally. Use this period to reassess your strategy, diversify risk, and position yourself for whichever direction the tide turns.

Bitcoin’s journey is far from over—but navigating it requires both courage and caution.