Why Bitcoin (BTC) Could Fall to $40,000 – CryptoQuant

Bitcoin fell more than 15% on Monday, briefly dipping below $50,000 amid concerns of a U.S. recession and rising geopolitical tensions in the Middle East. This was the first time since February that BTC fell below this threshold before bouncing back to $52,000.

Experts suggest that the crypto asset could see further downside.

More pain for Bitcoin?

CryptoQuant’s latest analysis indicates that Bitcoin could drop to $40,000, indicating a difficult period for investors. The crypto analytics platform highlighted that traders are currently experiencing their most negative unrealized profit margins since November 2022.

This decline reflects a significant shift in market sentiment, with increased selling pressure as traders seek to mitigate losses in an uncertain economic environment.

As a result of Bitcoin’s massive drop, the percentage of profit holders dropped to 75%, according to IntoTheBlock’s observation. This is a significant decline and the lowest level seen since January, when the price of Bitcoin formed a local bottom around $39,000.

Bitcoin wasn’t the only asset hit by intense selling pressure. Ethereum is down more than 22% in the last 24 hours, dragging its price down to $2,264 at the time of writing.

During the same period, Solana and XRP were also down more than 18.2% and 16.6%, along with the rest of the market. Meanwhile, Dogecoin declined by more than 20%.

Over $1 billion settled

The bloodbath resulted in the liquidation of $1.08 billion in crypto-tracked futures over the past 24 hours. According to data compiled by CoinGlass, long positions of $919.62 million were liquidated, while short trades accounted for $162.45 million.

Bitcoin was the hardest hit, with more than $371 million in liquidations, with $310.26 million long and $61.22 million short. Ethereum followed suit, with nearly $353 million liquidated over the same time period, including $303 million in longs and $49.6 million in shorts. Next up were Solana and Dogecoin, which also saw notable liquidations, with $60.91 million and $13.14 million, respectively.

In the process, 283,280 traders were liquidated in the last 24 hours, while the largest liquidation order occurred on Huobi for BTC-USD valued at $27 million.

The drop subsequently sent the Crypto Greed and Fear Sentiment Index indicating “fear,” hitting its lowest point since early July.

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