Is Bitcoin Price in Danger of Falling to $42,000? Here is a worrying scenario

What a difference a couple of days make, from bullish ‘Uptober’ momentum to bearish price predictions.

Bitcoin fell around $4,000 in the wake of the Iranian missile attack on Israel, and negative sentiment has seeped into crypto social media.

However, the breakout shows that BTC is still within its limited channel, which has continued for the past half year.

Is a $40,000 drop possible?

On October 2, ITC Crypto founder Benjamin Cowen painted a very gloomy picture based on historical price action following Federal Reserve interest rate cuts.

Bitcoin rallied for two weeks after the first rate cut in 2019. However, it then fell to the 100-week moving average in the following months.

If history rhymes, a similar drop in the same technical indicator would return BTC prices to around $42,000 by mid-November, he said.

Just to offer a different view to consider other than the “up only” view mostly shared on this platform, in 2019, #BTC it recovered for 2 weeks after the first rate cut, then dropped to the 100W SMA 2 months later, which would correspond to mid-November. pic.twitter.com/ogicF89JrM

— Benjamin Cowen (@intocryptoverse) October 2, 2024

However, the suggestion does not take into account that 2019 was the middle of a bear market, and it was not a year in the middle, which makes a difference.

However, other analysts also suggested something similar, but provided no rationale, and then described it as “bullshit”.

This was the $BTC 40k test dump. bass player pic.twitter.com/vbmszAMHmb

— Altcoin Sherpa (@AltcoinSherpa) October 1, 2024

As market analyst Miles Deutscher noted in a post on X on Oct. 1, there are plenty of reasons to remain bullish.

The increase in global liquidity through M2 money supply, rate cuts, which are usually good news for riskier assets, China’s economic stimulus measures, the upcoming US election where the crypto is a focus and a traditionally bullish period for crypto in the fourth quarter are some of them.

On October 2, ‘Ash Crypto’ told his 1.1 million X followers that it was “a big shock”. He added that October will start with a dump and we’ll see a side cut for most of the month before things take off.

Miners’ profitability drops

However, Bitcoin miners may have reason to be bearish. Bitcoin mining profitability hit a recent low in September, according to JPMorgan analysts.

Daily block reward gross profit declined 6% month-on-month in September, marking the third consecutive month of decline. The drop in revenue has been largely attributed to the Bitcoin halving event in April. However, transaction fee income for the month was only $13.86 million, Colin Wu observed.

SPECIAL OFFER (Sponsored) Binance Free $600 (Exclusive to CryptoPotato): Use this link to register a new account and receive an exclusive welcome offer of $600 to Binance (full details).

2024 LIMITED OFFER on BYDFi Exchange – Up to $2888 Welcome Reward, Use this link to register and open a 100 USDT-M position for free!