Bitcoin (BTC) At A Precarious Level: Bears Might Force Prices To $40,000

Although the uptrend remains from a top-down preview, one analyst thinks there will be more blood in the coming days if sellers press on.

Bitcoin price is falling. The coin fell as low as $49,000 earlier today, marking a 30% loss from its July peak. Although the coin later recovered somewhat, the downward trend continues according to the candle formation on the daily chart. The sharp selling pressure in Bitcoin also affects the altcoin and crypto markets. According to CoinMarketCap data, the total crypto market cap currently stands at approximately $1.82 trillion, down 15.46%.

Bitcoin is at a Critical Level: Bears Could Push Prices to $40,000

Although the upward trend continues from above, according to an analyst, sellers may cause more losses in the coming days. The analyst drew attention to on-chain developments in his statement on In the past, when BTC prices retested this line, it bounced back and returned to the main uptrend.

The on-chain average price metric shows the price at which current BTC holders purchased their crypto on average. Currently, BTC is trading much lower than the average price. This shows that the owners are making losses and selling to manage the risk.

If BTC extends the losses experienced today, its holders are likely to accelerate selling by turning to stablecoins or fiat currencies. According to the on-chain analyst, Bitcoin price could drop to $40,000 if sellers push aggressively.

It's Time for Institutions to Buy at Cheap Prices

On the daily chart, the bears reversed the increases experienced between July 8 and 21, pushing prices below the July 2024 lows. Adding the Fibonacci retracement tool to the October 2023 - March 2024 swing highs and lows shows BTC retesting the 50% Fibonacci level.

On the other hand, the August 5 bar is widely spaced and marked with high trading volume, indicating that sales are supported. Since the coin is in a bear breakout formation, there seems to be a high probability that BTC will drop to the 78.6% Fibonacci level or $35,000.

However, if BTC finds support this week, the bulls may be encouraged and help the recovery. This would be a welcome development for institutions in light of today's news that BTC has fallen below the average cost basis of the BlackRock spot Bitcoin ETF. The ETF's average cost basis stands at approximately $58,700. It is stated that as long as prices remain in this region or below, institutional investors can re-enter at a lower price through BlackRock by purchasing more units.

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