Bitcoin and the broader cryptocurrency market have seen panic selling recently, influenced by the Bank of Japan’s decision to increase interest rates from 0% to 0.25% and growing fears of a U.S. recession. This caused the price of Bitcoin (BTC) to drop to $49,112, but it has since recovered slightly to $52,982, a drop of nearly 16%.
Meanwhile, CryptoQuant, a leading on-chain data and analytics provider, warned that Bitcoin could fall further, possibly to $40,000.
Bitcoin (BTC) Price Drops Below $40,000
Bitcoin (BTC) has experienced a massive drop, falling more than 16% in the past 24 hours, breaking below the critical $57,000 support level. This sudden drop has alarmed the cryptocurrency community, with experts now predicting a possible drop to $40,000.
According to CryptoQuant, a leading on-chain data and analytics provider, the breakout from support signals a troubling trend. The recent decline has left traders with the most negative unrealized profits since November 2022.
Perhaps, CryptoQuant’s data highlights that recent price action could lead to further declines, which represents a critical period for Bitcoin holders and traders alike.
According to Coinglass, the recent crash in the cryptocurrency market has resulted in losses of more than $1.06 billion in the past 24 hours. Of this, investors who believed that prices would rise lost $900 million, while those who believed that prices would fall lost $160 million.
Bitcoin’s key support levels
Echoing a similar bearish stance, Ali Martinez, a prominent cryptocurrency chart analyst, highlighted that Bitcoin’s key support level is around $47,140. This level is important because nearly 900,000 addresses purchased a total of 489,000 BTC at this price.
This concentration of holdings makes $47,140 a key support area where many investors hold large positions. If Bitcoin can hold above this level, it could indicate resilience and potentially set the stage for a price rebound.
However, a break below this support could signal further declines as it could lead to increased selling pressure from investors who bought at this level.
