Bitcoin's price may plummet to $40,000 if current trends mirror previous downturns, analysts warn, as it struggles below key moving averages.
Bitcoin's recent performance has raised concerns among analysts, particularly after it closed the weekly candle below the crucial 100-week moving average, currently positioned around $87,500. This breach of support indicates potential challenges ahead, as the cryptocurrency has historically remained below this threshold for extended periods, barring a few exceptional events.
Bitcoin has closed weekly below the 100W moving average. This situation often precedes lengthy accumulation phases, with previous instances ranging from 182 to 532 days. Current trends suggest we may be in a similar scenario.
— ₿rett (@brett_eth) February 2, 2026
The historical context reveals that after the FTX collapse in 2022, Bitcoin spent an extended period consolidating between $16,000 and $25,000, lasting 532 days. In other cycles, such as 2014-2015 and 2018-2019, the cryptocurrency encountered similar stagnation beneath the 100-week moving average.
Bearish Signals from Market Indicators
Analyst Sherlock has highlighted the growing risk of a bearish market, noting that Bitcoin has just over a day before the bear market could officially commence. With USDT's dominance surpassing 7.2%, the last time this occurred was over two years ago, marking a significant potential shift in market dynamics.
Bitcoin must contend with the $85,000 resistance level, which could induce selling from investors who bought in during the recent months. This overhead supply poses challenges for any upward movement.
— Sherlock | DeFi Researcher (@Sherlockwhale) January 31, 2026
Current trading analysis indicates that the $85,000 mark may lead to increased selling pressure as many short-term holders are underwater due to their recent purchases. If Bitcoin's trajectory mirrors its 2022 performance, a decline to between $40,000 and $45,000 could be on the horizon.
Long-Term Perspectives on Market Recovery
Contrasting this bearish outlook, some analysts at Compass Point see the possibility of a recovery, anticipating a bottom between $60,000 and $68,000. They suggest a potential rebound point around $65,000, where long-term holders have established significant positions. However, they caution that the market remains precarious, particularly in the $70,000 to $80,000 range, which has been identified as an "air pocket" with minimal long-term investor support.
Net outflows from Bitcoin funds have reached $3 billion since mid-January, indicating a lack of confidence in the market. Should Bitcoin fail to regain ground above the $81,000 mark, analysts warn of a worst-case scenario where prices could plummet to $55,000, reminiscent of previous market downturns that necessitated broader economic distress.
