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\n\t\t\t\t\t\t\t\t\tFollowing previous drawdown patterns and time horizons between tops and bottoms, BTC is likely to extend its ongoing decline to the $40,000s.\t\t\t\t\t\t\t\t<\/p>\n<\/p><\/div>\n
According to on-chain indicators reviewed by analysts at the crypto exchange Bitfinex, bitcoin (BTC) still has some way to go before it bottoms out in this bear cycle.<\/p>\n
The latest Bitfinex Alpha report<\/a> revealed that the leading digital asset could decline further into the $40,000s by the end of this year as more investors exit the spot market.<\/p>\n In past market cycles<\/a>, BTC has always declined at least 70% from its all-time highs (ATHs) before bottoming out and recovering. During the 2022 bear market, BTC fell 78% from $69,000, while in 2018, it plummeted 86% below cycle highs near $20,000.<\/p>\n Based on previous drawdown patterns and the time horizons between tops and bottoms, BTC is likely to extend its ongoing decline into the $40,000s. The asset is currently 53.9% down from its ATH of $126,000; dropping into the $40,000s will bring the decline to at least 68%. Additionally, analysts believe BTC could\u00a0reach<\/a> its bear-cycle bottom in the fourth quarter of 2026 if cycle estimates account for<\/span>\u00a0price moves relative to moving averages.<\/p>\n Analysts say BTC\u2019s structural levels remain unchanged, even though the asset\u2019s floor gave way over the weekend. With the coin trading near $60,000 at press time, it is positioned beneath the True Market Mean of $77,000, a level representing the average cost basis for active investors. This level also serves as a demarcation between bullish and bearish market regimes, so bitcoin\u2019s price action will continue to be defined by a structural bear market environment.<\/p>\n After breaking below the $61,500 support level and falling to a new bear cycle low of $58,136 last week, $53,400 is now the key support level to watch. The move towards $58,000 reflects weakening spot demand as seen in short-term holder selling, exchange-traded fund (ETF) outflows<\/a>, the collapse of the digital asset treasury channel, and negative gamma pressure.<\/p>\n Unlike previous declines, there were no large-scale liquidations and flushes in open interest as BTC fell below $60,000 last week. This substantiated the fact that the fall was a structural exodus within the spot markets. With the market\u2019s primary demand engine missing, bitcoin\u2019s price is likely to remain weak and continue a downtrend in the coming weeks.<\/p>\n \u201cBut the market awaits a resurgence of spot demand to be able to find a floor and potentially turn higher,\u201d analysts explained.<\/p>\n<\/blockquote>\nA Possible Drawdown Into the $40Ks<\/h2>\n
Spot Demand Still Weak<\/h2>\n
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