Bitcoin In Red, Analyst Predicts A 40% Drop To $48,000 Before Recovery

Bitcoin is roughly 20% from all-time highs, and risks are trending lower, breaking from the current consolidation. After peaking in mid-March, bulls are yet to build enough momentum and overcome the roadblock at $72,000.

While there were temporary gains in early June, the retracement in the last few trading days has seen BTC recoil, falling below $60,000 this week. Even though some traders are hopeful, one analyst took to X, saying holders should brace for more losses in the coming days.  

Citing the spending actions of long-term holders (LTHs) in previous cycles, the analyst said there is a high probability that their habits could see BTC drop by 40% from all-time highs.

Interestingly, data shows LTHs began selling at around $45,000. This level can act as a support region, anchoring a leg up that may see BTC finally break $72,000 and all-time highs.

The analyst added that the current formation mirrored the discouraging decline in 2019. Then, BTC fell sharply before pushing higher, triggering a bull run.  

As of late June, Bitcoin has been roughly 20% of spot rates. If the analyst is correct, the coin could drop below May 2024 lows and as low as $48,000, breaking the round and psychological number at $50,000.

Looking at the structure of the Bitcoin candlestick formation in the daily chart, the zone between $56,500 and $60,000 is supported. If sellers of June 24 flow back, pushing prices lower, there is a high probability of BTC slipping even lower. Technically, the drop will be a bearish breakout formation, a move that could catalyze even more losses.

Despite the bearish assessment, there are contrasting activities, especially when looking at the behavior of traders on Binance. One analyst shared data revealing that over 72% of all accounts with open BTC positions are long.

This resilience in the face of recent drops and the willingness to hold on despite dips is a massive boost of sentiment. It comes when the BTC market expects payment from Mt. Gox to heap more pressure on prices. After roughly ten years, hack victims will be receiving their compensation.

Persistent outflows from spot Bitcoin exchange-traded funds (ETFs) worsen the situation. Lookonchain data on June 25 shows that all spot BTC ETF issuers in the United States decreased by 2,145 BTC. Of this, Fidelity decreased by 612 BTC.